The following provides a summary of the additional information provided by the Parliamentary Budget Office (PBO) on implementation of the recommendations of the Independent Review Panel, Parliamentary Budget Office Review 2016-17.
Recommendation 1—The PBO should replace the reliability rating in its costing response documents with a statement on the factors that can affect the uncertainty of that type of policy costing. The PBO’s costing response documents should expand existing qualitative comments on reliability to highlight particularly uncertain elements of the specific policy when that is appropriate.
The PBO noted that, ‘since 31 March 2017, the PBO has replaced the single word reliability rating in its costing response documents with a more detailed qualitative statement on the factors that affect the uncertainty of a costing. This has enabled the PBO to highlight the source and degree of uncertainty associated with any particular costing’.
Recommendation 2—The PBO should further develop and publish principles and processes to help set priorities in relation to requests from parliamentarians for costings and budget analysis, having regard to: i. the relevance of the request to matters expected to be before the Parliament ii. the level of representation of the requesting political party in Parliament iii. the level of priority given to the request by the parliamentarian’s political party and/or the parliamentarian, and iv. the level of resources required to complete the request.
The PBO noted that, ‘in late 2017, the PBO consulted with stakeholders on its approach to the prioritisation of requests from parliamentarians. On 15 February 2018, the PBO published an information paper—PBO costing processes, timeframes and prioritisation framework’.
Recommendation 3—The PBO should take action within its resource constraints to improve the quality and timeliness of its responses to parliamentarians’ requests for policy costings in peak periods, including: a. entering into secondment arrangements, including reciprocal arrangements, with Government Departments and Agencies, and b. exploring other mechanisms, such as using technology to streamline the costing process, and increasing collaboration with Government Departments and Agencies on model development.
The PBO noted that it had ‘introduced an electronic workflow management and data analysis system in mid-2016 to streamline the monitoring and management of costing requests … The PBO has also been working effectively with a number of Commonwealth agencies to improve the timeliness of its access to updated information and models following economic updates. As part of this work, the PBO has entered into, and expanded, “standing” arrangements with a number of agencies for the provision of information as soon as practicable following the publication of an updated economic and fiscal outlook … The PBO has also agreed arrangements with a number of agencies to establish remote access to data and model warehouses held by agencies that hold some of the key microdata sets used for costings and analyses … Fourteen secondments were established in 2019’.
Recommendation 4—The PBO should establish a small, independent, expert advisory panel that it could consult on cross-cutting issues associated with policy costings and fiscal analysis. This advisory panel would not be provided with information on confidential costings of parliamentarians and would have no direct role in their preparation and provision.
The PBO noted that it had ‘established a panel of expert advisors in late 2017 … Since its establishment, an annual gathering of all panel members has been held in 2018 and 2019 to discuss and seek feedback on the scope, quality and effectiveness of the PBO’s work program and operations. Interactions between members and PBO staff occur regularly outside of these annual meetings’.
Recommendation 5—The PBO should ensure that the JCPAA is provided with sufficient data to allow it to regularly monitor the provision of information to the PBO through the Memorandum of Understanding.
The PBO noted that it ‘issues a comprehensive activity report three times a year, in addition to its reporting through the annual report … The PBO provides its activity report to the JCPAA secretariat at the same time the report is published and provided to the Estimates Committee secretariat, and has made an open offer to the JCPAA to provide a briefing on the PBO’s performance, publications and activities at any time’.
Recommendation 6—The PBO should continue to work collaboratively with Government Departments and Agencies on information requests and model development, consistent with maintaining the confidentiality of parliamentarians’ policy proposals. The PBO should ensure that it includes sufficient context to enable the provision of the most appropriate information in response.
The PBO noted that ‘over time, the PBO has increasingly built effective, collaborative relationships with Commonwealth agencies to ensure that information requests are efficiently responded to and model developments are shared. Following engagements between the PBO and agencies, the PBO is increasingly obtaining information used in costings and analyses under standing request arrangements … the PBO has also collaborated with some agencies to secure remote access to data and model warehouses’.
Recommendation 7—The PBO should periodically conduct an ex-post analysis of a limited selection of its policy costing estimates, to help identify areas for improvement in future costings, and report the results to the JCPAA.
The PBO noted that it has ‘an ongoing process of refining key models and costing approaches … The PBO has also established an ongoing process for the formal evaluation of a selection of completed costings and aspects of our modelling methodology and data. These evaluations include consulting with relevant agencies, external stakeholders and/or members of the expert panel’.
Recommendation 8—To improve the relevance of its self-initiated work, the PBO should: a. develop deeper and broader consultation with the JCPAA and other parliamentary committees b. align more closely its self-initiated work with, and help build the capacity of, PBO costing work, and c. consider a possible evolution of its self-initiated work program by: i. expanding its existing focus on medium-term fiscal sustainability issues ii. building its capacity to analyse underlying drivers of the budget over the longer term, including, but not limited to, demographic analysis, and iii. ensuring it has the capacity to further develop its longer-term analytic ability to allow consideration to be given to transferring responsibility for the next Intergenerational Report (scheduled for 2020) to the PBO.
The PBO noted that it is ‘conscious of the need to ensure that its self-initiated work program is relevant and valued, and uses a range of metrics (including drawing from the stakeholder survey) to report on this element of our performance in the annual report. In preparing the Parliamentary Budget Office corporate plan, the PBO consults with a range of Senate and House of Representatives committees to seek their comments on the proposed research program as well as with members of the PBO’s expert panel and other external parties with an interest in the PBO’s work … Since April 2017, costing advice has covered a 10-year horizon, enhancing the integration between our medium-term analysis work and our costing capability’.
Recommendation 9—The PBO should more fully explain the methodology underlying the policy costing process, including in a non-technical fashion.
The PBO noted that it had endeavoured to draft a range of recent PBO policy costing information papers ‘for a nontechnical audience, including hierarchies of information to suit the different audiences for these papers. All individual costing minutes, including those published in our post-election report and publicly released costing minutes on our website, include details of the assumptions, any associated uncertainties, methodology and data used in each costing, in line with the principles laid out in the information papers’.
Recommendation 10—The PBO should publish regular data on the number of policy announcements made with reference to PBO costings, and whether or not, and when, the underlying PBO costing response document was released by the party or parliamentarian concerned.
The PBO noted that its ‘activity report, which is published three times a year, has been expanded to include a summary of all costings that have been publicly released by parliamentarians. This information will also be presented in the annual report. The PBO publishes on its website all costing minutes published in full by parliamentarians for whom the costings have been prepared. On 11 August 2017 the PBO published guidance to parliamentarians to outline the operation of this new policy, see Guidance 02/2017—PBO publication of responses that have been publicly released by parliamentarians’.
Recommendation 11—The Post-election Report of election commitments should include the financial impact over the medium term (in addition to the forward estimates period) of: i. the top ten policy proposals by dollar value ii. any proposal with an impact of over $1 billion in a year iii. proposals with a materially different impact beyond the forward estimates, and iv. the overall election platform for each political party.
The PBO noted that it ‘implemented this recommendation in the 2019 postelection report’.
Recommendation 12—The timing of the publication of the Post-election Report of election commitments should be delayed to the later of the first sitting day of Parliament following a general election or 30 days after the return of the writs from a general election.
The PBO noted that the ‘Parliamentary Service Act 1999 was amended in early 2019 to enable publishing of the post-election report within 30 days or seven days before sitting before sitting of the new Parliament. In 2019, the PBO met this new requirement’.
Recommendation 13—The PBO should provide parliamentary political parties with fewer than five Members or Senators the option to have the financial impact of their election commitments included in the PBO’s Post-election Report of election commitments.
The PBO noted that, ‘on 27 April 2018, the PBO published guidance to parliamentarians to outline how arrangements for small parties would be implemented (see Guidance 01/2018—Allowing minor parties to opt in to the PBO’s post-election report of election commitments) … No minor parties or independents chose to be included in the 2019 post-election report’.
Recommendation 14—The PBO should consider the value of continuing to publish the chart pack following each fiscal update.
The PBO noted that it had ‘refined its chart packs over time … In the recent stakeholder survey, 93 per cent of respondents to questions about the chart pack indicated they were interested in, aware of, or had read, the most recent chart pack, suggesting there is value in continuing to publish it’.
Recommendation 15—The PBO should ensure that the JCPAA is regularly provided with sufficient information on the PBO’s workload, resource requirements and efficiency, to enable the JCPAA to monitor their impact on the level and timeliness of the PBO’s outputs.
The PBO noted that it has ‘regular, ongoing correspondence with the JCPAA regarding the PBO’s resource requirements, workload and efficiency. The PBO has an open offer to the JCPAA to provide a briefing on the PBO’s performance, publications and activities at any time’.
Recommendation 16—The PBO should conduct a survey once in each term of Parliament to get feedback on its performance from its stakeholders.
The PBO noted that it ‘conducted a stakeholder survey during February and March 2018. Results of the survey were included in the PBO’s activity report in May 2018 and the annual report. In addition, we are looking at ways to gather more regular feedback through a range of channels to enhance reporting on the PBO’s performance as part of the annual performance statement in the annual report’.