Review of the ACT Election Commitments Costing Act 2012

Prepared by Bill Burmester, Mark Evans and Don Flemingwith the support of Richard Reid

(ANZSOG Institute for Governance at the University of Canberra)

For the Chief Minister and Treasury Directorate

ACT GOVERNMENT

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Contents

Acknowledgements...............................................................................................................................3

Executive Summary...............................................................................................................................4

1. Terms of Reference....................................................................................................................6

2. Interpretation of Terms of Reference........................................................................................7

2.1. Aims.......................................................................................................................................7

2.2. Principles of engagement......................................................................................................8

2.3. Review design........................................................................................................................8

2.4. The organisation of the report...............................................................................................9

3. Legislative Intent......................................................................................................................10

4. Evaluation................................................................................................................................12

4.1 The perceived benefits of the Act..............................................................................................12

4.2. Implementation of the Act..................................................................................................17

4.3. Estimated Costs...................................................................................................................21

5. Findings and Suggestions.........................................................................................................22

References...........................................................................................................................................25

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Acknowledgements

We would like to express our gratitude to the broad range of ACT politicians, political staffers and public servants who have helped us to assess the strengths and weaknesses of the implementation of the Election Commitments Costing Act 2012. As always, however, the interpretation of data in the analysis which follows remains the sole responsibility of the ANZSOG Institute for Governance.

Professor Mark EvansDr Don FlemingBill BurmesterRichard Reid

Note: in the text: “Act” refers to the Election Commitments Costing Act 2012; ”Guidelines” refer to the “Guidelines for Costing Election Commitments 2012” issued under the Act on 31 August 2012. The use of capitals in “Party/Parties” designates reference to the three main political parties contesting the 2012 ACT Election (whereas party/parties refer to interested participants in a matter).

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Executive Summary

The implementation of the Election Commitments Costing Act 2012 may be viewed a success both in terms of achieving its legislative intent and in its operationalization. It met its obligation to provide political parties in the ACT with an efficient and effective election commitments costing process as well as also providing additional perceived benefits to both political and bureaucratic levels.

There were a broad range of critical success factors identified in the Review, the most important being: the inclusive approach that was adopted to policy formulation (thus ensuring that the Act was implemented with a broad sense of ownership); sound project management of the costing process by Treasury; and, the establishment of effective working relationships between Treasury and political parties. A number of concerns were identified in terms of refinement of the provisions and arrangements of the Act’s operations to mitigate strategies designed to avoid fair and equal scrutiny of a Party’s commitments.

Several possible improvements to the implementation governance of the Act were identified in the findings of the Review that could be considered by the Assembly.

Perceptions by the Parties of the potential for “game playing” under the Act could be reduced by considering the suggestions below in terms of the scheduling and the timing of the release of costings.

1. Parties, if they considered it useful in their campaign strategy, could be allowed to submit requests that they have not yet publicly announced provided that they specify a date when the commitment will be publicly announced so that Treasury can publish the costing on that day. The same requirements around withdrawing a request should still apply as presently defined.

This suggestion would allow Parties to better manage their own campaigns while maintaining the fundamental principles of the current Act. The downside to this suggestion is that it could lead to a loss of flexibility for Parties to reschedule release of commitments after their early submission if they wished to vary their campaign strategy. It could also lead to requests being withdrawn if the Party changes its policy prior to its public announcement.

2. Treasury could maintain and publicly issue a running “tally” for each major party during the election campaign.

This proposal would provide public information on the fiscal position of the Parties, and is in line with the release of the pre-election budget update in ensuring key budgetary matters are available to the electorate during the election period. The downside to this suggestion is that, at any point in time, the released progressive totals would reflect the timing of submitted commitments for costing and not the full fiscal impact of Party commitments. This could provide a misleading picture of the various positions of the Parties until the end of the election period. It may also provide an incentive for Parties to delay their costing requests. In any event, the release of the costings would allow any interested person or the media, if they wished, to compile such a tally.

3. The confidentiality provisions of the Act could be broadened to include any aspect of any dealings that Treasury has with the Parties in the course of undertaking election costings,

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and so avoid concerns that the incumbent Government had access to information that could be used against other contestants in the campaign.

This suggestion would strengthen the trust of the parties and electorate in the Act, but would need to take account of existing caretaker conventions applying for the same period.

4. As part of the ongoing monitoring of the Act’s impact, Treasury (or another commissioned body) could compile a data base of access to, and media reporting on election costings material. This could include recording the numbers visiting the information on the Treasury website.

This suggestion would respond to the broader observation as to whether effective monitoring systems are being designed into the operations of the Act to ensure that appropriate data is being collected to evaluate whether the legislation is meeting its public information purpose and facilitating higher quality public policy debate.

5. As an act of good faith, the Guidelines on which the Act depends for effective implementation could be tabled before the Assembly rises for the election to allow for parliamentary scrutiny, and discussion if warranted, of its provisions.

While the Guidelines issued for the 2012 Election were not in dispute, tabling of future draft Guidelines in the Assembly would help foster commitment to and trust in the Act by the Parties. Going a step further and making them subordinate legislation as disallowable instruments runs the risk of negating these benefits through potentially making them an item for contention and dispute.

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1. Terms of ReferenceThis Review was requested at Part 3, Section 14 of the Election Commitments Costing Act 2012:

Part 3: Section 14 – Review of Act

(1) The Minister must review the operation of this Act after the end of the costing period for the 2012 election.

(2) The Minister must present a report of the review to the Legislative Assembly not later than –

(a) the last sitting day in October 2013;

(b) if there is no sitting day in October 2013, the first sitting day after October 2013.

(3) This section expires on 31 October 2014.

The Review benefited from the inclusive methodology that underpinned policy formulation with the establishment of the Select Committee on the Election Commitments Costing Bill 2011 Exposure Draft which reported in June 2012. Cross bench membership ensured that the Act was formulated within the spirit of consensus demanded from legislation of such democratic significance.

The Terms of Reference specified in the commissioning documentation required the reviewer to undertake a review the Act and Guidelines which focussed on:

(1) That matters of principle are in the Act and not the Guidelines.(2) That during the 2012 ACT Election:

(a) The costings process occurred in a transparent, non-partisan and objective manner;(b) Both political parties and public servants clearly understood their roles and

responsibilities;(c) Costing timelines and costing period were appropriate;(d) The process of requesting costings was easy to follow; and(e) The final reporting of the costings was informative.

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2. Interpretation of Terms of Reference

2.1. AimsThe purpose of including a requirement to review the Election Commitments Costing Act 2012 within the legislation is in line with “best practice” requirements to assess whether the operation of the Act met its legislative intent and was implemented efficiently and effectively within the allocated project timeframe.

Hence a comprehensive (within given constraints) and independent evaluation of the project will inform the ongoing development of a responsive, co-ordinated costing service system and the strategic policy framework which underpins it. The Terms of Reference established during the commissioning of the Review (above) focussed the assessment around:

1. developing sound base-line knowledge of election costing practice prior to intervention;2. Identifying anticipated impacts;3. Describing the intervention and its logic;4. Highlighting any critical barriers to effective implementation;5. Presenting mitigating strategies for addressing such barriers; and, 6. Assessing project outcomes at the officer, political, legislative and community levels.

A ‘realistic evaluation’ approach was adopted in the Review (see: Arksey in Taylor and Baloch, eds., 2005; Palfrey, Thomas and Phillips, 2012; and, Pawson and Tilly, 1997) appropriate to an intervention which involves delivering outcomes in a highly politicised setting, namely an election. The review design sought to ameliorate these complexities through the adoption of a co-learning approach with key stakeholders and participants. This involved integrating the views of all the key stakeholders and participants in the review process to discover what works, for whom and under what circumstances. This approach recognizes the importance of focusing on both project process and outcomes. Such an approach also allows for systemic factors influencing the project to be identified and moderated ensuring the achievement of better overall outcomes (see Figure 1).

Figure 1. The learning process underpinning the review

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2.2. Principles of engagementGiven the politicised nature of this Review, four principles of engagement were adopted in the Review process:

i. A developmental approach anchored in designing an evaluation which has broad ownership. The emphasis in this form of evaluation is placed on organisational learning and lesson-drawing.

ii. The Evaluation Team engaged in an ‘Objective-led’ evaluation i.e. the aim of this evaluation is to determine the relevance and fulfilment of project objectives in terms of their ‘efficiency’, ‘effectiveness’, and ‘impact/influence’.

iii. We also emphasized the importance of synthesizing the findings through collaborative analysis. This process maximises utilisation of the research and ensures that the evaluation provides information that is credible and useful, enabling the incorporation of lessons learned into the organizational workplan.

iv. The research also drew on the best traditions of action-based research to allow for the timely integration of findings into decision processes.

2.3. Review designAs noted above, the ‘realistic evaluation’ approach adopted assesses the perspectives of all the key stakeholders and participants to discover what works, for whom and under what circumstances. The Review therefore needed to capture lessons from the perspectives of stakeholders, participants, the Project Team and partnering agencies (where appropriate) on the ingredients of effective project delivery. The evaluation used mixed methods to collect both quantitative and qualitative data on base-line, process, impact, and systems issues. A range of data sources were utilised, including interviews with the Project Team, interviews with users from the three political parties, implementation analysis, impact measurement, and professional reflection sessions. The Review focused on the analysis of data collected through project participants, augmented as appropriate with further data collection activities. This allowed us to build a picture of: a) the base-line (election costing practice prior to intervention); b) the intervention and its logic; c) barriers to action and their mitigation; d) project impacts; and e) broader systemic impacts on the quality of democratic life in the ACT. The following questions were evaluated with project participants:

Box 1. Guiding themes for evaluation

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OrganisationalLearning

Co-design study

Impactanalysis

Identification of Critical Dilemmas

Collaborative Analysis

Understanding the status quo

How did the previous system work? What was wrong with it? What was the experience of service provision? What worked and what didn’t? What problems are addressed through the Act?

Perceptions of the purpose of the Act

What do you see as the purposes of the Act as they relate to your particular role in the election process? Is that of value to your role? And, if so, in what ways? How would you measure the success of the Act? Do you think others have different understandings of the intention? If so, how did that manifest itself?

Implementability

How was the implementation of the Act managed? Did the implementation of the Act confront any barriers? Box 2 presents the range of potential barriers to effective implementation and associated questions which we evaluated with informants.

2.4. The organisation of the reportThe substantive elements of the report are organised into three further sections. Section 3 assesses the legislative intent of the Act. Section 4 evaluates both the benefits deriving from the Act, and how well it operated in practice within the requirements of the Act itself. Section 5 presents an overview of the Review findings and suggestions for further consideration.

Box 2. Potential barriers to the effective implementation of the Act

Timeframes and game-playing issues

Did the timeframes create difficulties? Did they provide for behaviours that limited the effectiveness of the Act? Do you think parties did, or could, exploit the timeframes? Do you think any party held back announcements until late in the election with the likelihood that they could not be costed in time? There is a political sanction against this – do you think that it is strong enough? Would you change the specified timeframes? As no fees are charged under the Act was the process used as a testing ground, in that commitments were costed but not made public if they looked too expensive? And do you think the Government used the caretaker conventions appropriately in regard to costing of their or others’ commitments, or used the conventions to their advantage?

Compliance issues

In your view, did all parties comply with requirements, in spirit as well as letter of the law? Did Treasury perform according to Act and Guidelines? To your knowledge, were there any breaches of the confidentiality provisions? Do you think there was comprehensive coverage of your and others commitments?

Technical issues

Were the commitments clear enough to cost, or were there iterations with Treasury? In relation to “Discretionary level” commitments, was value added to understanding and accuracy by process? Or could they be dropped from examination? Costings are just one aspect of policy analysis another is assessment of what public value you get from the intervention. Do you think the process should try to quantify benefits? And with the published costing assumptions?

The authorising environment

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Do you think the ACT electorate appreciated the outcomes from the process? How would we know? Do you think the process mitigated, or exacerbated political claims around costings? Did it enhance public policy debate and political literacy during the campaign?

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3. Legislative IntentThe legislative purpose of the Election Commitments Costing Act 2012 is outlined below in Part 2, 5.1.a&b, p. 3:

Requests to cost election commitments

Before polling day in a costing period for an election of the Legislative Assembly –

(a) the leader of a registered party in the Legislative Assembly with 1 or more MLA’s may ask the director-general to cost a publicly announced election commitment of the party; or

(b) an MLA who is not a member of a registered party may ask the director-general to cost a publicly announced election commitment of the MLA.

(Election Commitments Costing Act 2012, Part 2, 5.1.a&b, p. 3)

The Act is based on the self-nomination of commitments by political parties (under Section 5 political parties “may ask. . . .” for costings), and the application of public resources to their costing, using a common set of processes and costing assumptions and parameters. This “voluntary” approach could be seen as fairly “light-touch” compared to the alternative of a strong regulatory approach with heavy penalties for failings often adopted in developing public policies. However, given the required public disclosure and the contested political environment of an election period in which the Act operates, it would appear that such an approach was judged to be adequate to ensure the Act met its objectives. In introducing the Bill to the Legislative Assembly, the Treasurer, Mr Barr, was unequivocal about the voluntary nature of the approach, and the reliance on political scrutiny at election time, saying ‘The bill places the responsibility on the political parties to decide whether to instruct Treasury to cost a publicly announced election promise, and in essence the party decides how transparent they will be with the community’ (Barr, 2012a).

Given the “self-nomination” basis of the Act, actual obligations under the Act fall largely on Treasury officials to undertake particular actions within specified timeframes (Section 9, 10), and maintain confidentiality until costings are released (Section 11). Obligations on political parties relate to compliance with specified procedures in submitting a request for a costing. Section 14 requires the Treasurer of the day to review the operation of the Act and present a report to the Assembly.

As a result, the Act and its provisions are relatively straightforward to assess from an evaluation perspective. The Act enacts a scheme for the costing of election policies in the ACT. An election policy for this purpose is a publicly announced election commitment of a registered party or MLA. Costing is restricted to election commitments of the applicant party or MLA. An applicant must not request a costing of an election commitment of other MLAs or political parties to which they do not belong. Applications must be in writing and contain a detailed explanation of the election commitment to which they relate, including its purpose and any other information relevant to the costing. The framework of the ACT scheme is comparable to similar schemes enacted by other Australian jurisdictions including the Commonwealth and Tasmania or incorporated into caretaker conventions (e.g., WA).

Eligibility under the Act is comparatively inclusive. Before polling day leaders of registered parties (with more than one MLA) and MLAs not members of registered parties are eligible to apply for a

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costing of an election policy. After polling day eligibility is restricted to leaders of registered Parties (with more than one MLA before polling day) or another person nominated for that purpose by such a Party. Access to the election policy costing process is straightforward. Applications are made directly to the Director-General of the ACT Treasury Directorate. Other States have comparable access provisions. In contrast the comparable Commonwealth provisions require applications for costing of election policies to be made to the Prime Minister, who may then agree to refer the application to the Secretary of the Treasury (for costing aspects of policies affecting tax revenue) or the Secretary of the Department of Finance and Deregulation (for costing aspects of policies affecting government outlays and expenses and non-tax revenue).

Requests for costing of an election policy may be made before, on or after polling day in the costing period. This is defined as the period commencing one week after the last sitting day of the Legislative Assembly before an election and ending on election of the Chief Minister on the first post-election sitting day. In this respect the Act resembles other Australian legislation, for instance, in Tasmania the comparable period commences on pre-election dissolution of the lower house and ends at close of the poll on polling day.

Responsibility for the administration of the scheme rests with the Director-General. She/he is empowered to make guidelines for that purpose, and did so in 2012. As soon as practicable after receipt of a request the Director-General must make publicly available the name of the requestor, the date of the request and details of the election commitment to which the request relates. If necessary to cost an election commitment she/can request a person to provide the additional information required. A requestor can withdraw her/his request at any time before the requested election policy commitment is delivered by the Director-General. Any requests made before polling day but not costed or released are deemed to be withdrawn on polling day. Requests made on or after polling day and not costed or released are deemed to be withdrawn at the end of the costing period.

Central to the Director-General’s role is costing. As soon as practicable after receipt of a costing request she/he must cost the election commitment, and make the costing publicly available. Requests received before polling day must be costed and publicly released before polling day. Other requests must be costed and publicly released before the end of the costing period. The advent of polling day or the end of the costing period ends the role of the Director-General in relation to costings under the scheme. She/he must not begin work or continue work on a request not costed or completed before the end of the relevant period.

The Director-General may not have adequate information or enough time to cost an election commitment and to make it publicly available. If so, she or he must give public notice that the election commitment cannot be costed and made publicly available in time and the reasons why this is so.

During the costing period costing information particular to a costing request must not be disclosed to anyone other than the requestor, except in cases in which such disclosure is required by law, made in the exercise of a function under the Act or other law or is with the consent of the requestor. It should be noted that for the purposes of the ACT FOI legislation documents relating to costing requests are exempt documents during the costing period (with exceptions in relation to ss. 14 and 48 of the FOI Act – see : s 12(1) & (2) of the Act).

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4. EvaluationHow well the Act worked in the first election since its adoption can be viewed from two perspectives: the degree to which it met the expectations of the Parties in passing the Act, and secondly, how well it operated in practice within the requirements of the Act itself. To assess each of these dimensions, two perspectives have been assessed; an “objective-led” evaluative frame of perceived benefits and an implementation governance analysis. The findings are presented below in Sections 4.1& 4.2.

4.1 The perceived benefits of the ActThe Treasurer, Mr Barr, in introducing the Act articulated its core purpose in the following way:

The government is committed to providing the territory with a transparent framework that if it is used to its full potential will provide the community with assurance that election commitment costings are materially correct (Barr, 2012b) (emphasis added).

In the Act itself, the stated intent is simply articulated as “an Act to enable costing of election commitments”. In the Explanatory Statement, and other parliamentary papers, various other purposes and uses of the Act can be identified:

Although the Treasury Directorate has been costing election commitments in accordance with an agreed Government process each election, formalising the costings process with legislation will improve transparency of the process during an election. (ACT Government, 2012) (Emphasis added)

In addition, various other perspectives concerning the value of public disclosure of the costs of political promises were expressed at interviews during the Review. These perceived potential benefits to derive from the passage of the Act were numerous and covered a wide spectrum of issues. In part, the fact that such a range of perceived benefits were identified by the various Parties reflected the high level of satisfaction with the framework created by the Act. The Review notes these perceived benefits below to show the strength of the legislation in addressing a number of “political pressure points” to the satisfaction of the political contestants in the ACT.

The notion of ensuring there was a greater level of “fair dealing” for all political parties was one of the key motivations behind the introduction of the Act, and one in which the parties considered the Act provided to a significant degree. While Treasury had provided costings in previous elections, concerns had been raised about whether they were in fact doing the incumbent Government’s bidding, rather than acting independently. Treasury themselves welcomed a public and clear statement of their role, and a specified basis of their involvement in the election process.

Clearly, actions directed at ensuring the integrity of the public service is of value in the ACT’s form of government, and this was seen to have been assisted by the Act. There was also broad agreement that having a systematic, defined process was a significant advance on past practice, and should be retained. All parties endorsed this view, reflecting that the Act removed the “politics” from the previous arrangements. On this perspective alone the Act was considered a success, and its continuation seen as a permanent part of the political landscape for future ACT elections.

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However, in interviews, the obverse of having a specified process was raised as an important issue: fair dealing under the voluntary nature of the Act requires all players to act “fairly” by their full participation and commitment to the processes involved. If the Act allows for “game playing”, and if the notion of political sanction is not considered strong enough to achieve full commitment, some parties may feel at a disadvantage in the election, while others may seek to gain comparative advantage.

The Greens issued all of their commitments early so that costings could be undertaken and released in time for public review.

The Green’s costings were submitted early, painstakingly researched and calculated and well-received in the media. And they probably didn’t win the Greens a single vote. The whole exercise sucked up a lot of campaign time and manpower that could have been more usefully deployed on doorsteps in Belconnen or Tuggeranong (Canberra Times, 2012a).

The timing of the release of policies, and as indicated by Figure 2, the timing of submitting requests for Treasury costing certainly did vary between Parties suggesting unsurprising evidence of different strategies at play.

“After all, this is an election campaign and all parties will seek to get whatever comparative advantage they can” (Party comment at interview).

Note: Figure 2 does not include withdrawn requests

Source: ACT Treasury data compiled for the Review by CMTD.

It is likely given this experience that all Parties will craft their strategies in future elections to their perceived advantage, hence there may be a need to refine the provisions and arrangements of the Act’s operations to mitigate strategies designed to avoid fair and equal scrutiny of a Party’s commitments.

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One type of potential “game playing” that the existence of the Act was considered to have removed from possible deployment in future elections was the possibility that an incumbent Government could redefine (or “gold-plate”) another Party’s proposals to make them more expensive, and possibly more unaffordable, than the proponents had planned or claimed. Under the Act, the release by Treasury of the costings, the basis of the costings, and any caveat that Treasury advised, removed this concern and, to some extent at least, was viewed as decreasing the known advantages of incumbency.

In total, 368 commitments were costed and released during the election campaign. At one level this is an admirable outcome and indication that the electors were well served by having costings available to them to inform voting preferences. On the other hand, there is no direct evidence of widespread reference by the electorate to the costing documents during the election.

One problem in determining the use by the electorate of the costings information was that the Treasury website was unable to count “hits” on the costing webpage. No polling or other research into use of the material was conducted at the time of the election. In short, the impact on public choice of having costings available is a matter of conjecture.

The provisions of the Act require that Parties must publicly announce a policy before it can be accepted by Treasury for costing. This approach seeks to limit the use of public resources to serious, definite policy initiatives, not for speculative and possible kite flying exercises. As a result, press coverage of individual commitments tended to rely on (the earlier) Party press releases, rather than subsequent Treasury costings when they were issued. Consequently, there was little if any on-going commentary on the Act’s formal outputs. Treasury’s release of costings was routine, low key, and no tallies were issued to show “the state of the party” in terms of overall commitment “spend” in a way that would attract such commentary. This was welcomed by the Parties at interview who reported that having the costings issue ”depoliticised” meant the public was free to concentrate on the policy itself, and that was a significant improvement in the conduct of a “competition of ideas” in the election. It was therefore not of particular concern that the actual output of the Act, namely the Treasury costings, were not an issue in the election.

The limited political commentary concerning the Act that did occur centred on statements about party adherence to the provisions and their timing:

Mr Barr said the Liberals were simply trying to escape scrutiny of their election commitments (Cox and Towell, 2012).

There may be grounds to re-examine the requirement for prior announcement. One suggestion was put forward in this regard to the Review team:

Allow Parties to submit requests that they have not yet publicly announced provided that they specified a date when the commitment will be publicly announced so Treasury can publish the costing on that day. The same requirements around withdrawing a request should still apply.

Under this suggestion the Party would not receive the draft Treasury costing until the policy has been announced on the specified date. This was seen as likely to help ensure that the process continues to remain one of verification and requires Parties to present their own numbers to the community. The concern that gives rise to the suggestion is that effectively under the current scheme a party cannot announce a commitment during the last week of the campaign if they wish to

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have the policy costed. Allowing a Party to submit a costing to Treasury beforehand would overcome this and, by requiring a date to be nominated for publication and a provision that it be released earlier if announced earlier by the Party, it may assist in spreading the workload for Treasury officials. The downside to this suggestion would be a loss of flexibility for Parties to reschedule release of commitments after their early submission if they wished to vary their campaign strategy and it was stressed that the Act should not introduce limits on the conduct of the Parties own campaigns. Therefore this proposal should not become mandatory, and the current “voluntary” principle underpinning the Act should be retained if this suggestion was to be taken up.

It was considered that overall the legislation may have had a salutary effect on the full budgetary impact of a political party’s manifesto presented to the electorate. Views expressed at interview suggested that Parties did see that the requirement to have commitments costed did lead to more responsible economic stances being adopted in the election, even if this was not a particular issue in the election.

In a similar way, the notion that the Act could lead to better policy formulation by political parties cannot be said to have been a significant feature in the 2012 election. Some public comment was made indirectly on this issue at the time but, if anything, supported the view that this was not directly served by the Act. At the time, the public comment about the impact of the Act on policy down played the likely effect:

The Liberals’ strategists knew the debate over the Treasury would play in the media but not in the suburbs (Canberra Times, 2012a).

The Greens’ costings were submitted early, painstakingly researched and calculated and well-received in the media. And they probably didn’t win the Greens a single vote (Canberra Times, 2012a).

Nevertheless, at interview, some comment was received that the Act had the impact of ensuring less realistic ideas were not announced by parties, and that more reasonable proposals emerge compared to earlier elections.

One of the effects (of the Act) was to moderate some of the more ridiculous proposals from the various Parties.

The approach puts some discipline on parties (Party comments at interview)

The efficacy of policy proposals is not examined under the Act, and clearly proscribed in the Guidelines, and this aspect is left to the political process and media scrutiny during the election to determine. This approach was supported by Parties at interview as being appropriate as it avoided drawing Treasury into making judgements beyond costing issues.

It should be noted that no other jurisdiction goes beyond the costing of proposals, and it is difficult to imagine an official process (as in having part of the ACT Public Service undertake this role) by which further examination of commitments could be conducted. The only course available would be to establish an independent assessment authority, such as a Parliamentary Budget Office, a course that was specifically ruled out in the collaborative development of the ACT Act.

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Holding political parties to account by having a public listing and costing of their “promises” is important in fostering a culture of responsibility in processes of parliamentary democracy. By adopting the Act, the Legislative Assembly endorsed that approach as a fair basis for participation in the government of the ACT. The evidence demonstrates that this was achieved and was reflected through Party participation in the process, and the perception of frank disclosure of intent by politicians seeking support from the electorate.

One aspect to this reported in interview was that the Parties themselves could access the released details of their competitors’ commitments and so could, if merited, hold proposals and costs up for greater scrutiny. This was seen as a strong accountability mechanism that the Act had sought to create, and had adequately delivered.

There were no public or political complaints at the end of the election period that costings had not been provided or were inaccurate. The Guidelines issued pursuant to the Act set out in detail the processes and schedules to be followed. As a result expectations had been set, and these were in large part met.

Parties welcomed having a specified, clearly defined and known framework in which to operate. Treasury reported that their work was made easier by having their role clearly articulated to the parties through the framework. This allowed them to engage with proponents of a commitment to clarify meanings, adjust assumptions and provide succinct explanations of the costing proforma released to the public.

Early in the election period, some concerns were aired about the independence of Treasury. However, these concerns did not have a lasting impact on the operations of the Act, nor on the sound relationships between the Treasury and the Parties that developed. An arithmetic error in the hardcopy of the background costing parameters document initially issued, and which was corrected swiftly, lead to the accusation of Treasury “playing games”. As the error would have had a similar impact on all Parties, this was not a realistic claim. Similarly, Treasury’s actions in releasing details of attendees at a meeting between them and the Liberals to the Treasurer’s office under the standing caretaker arrangements covering meetings between officials and Opposition parties wrongly construed in the media as a breach of confidentiality under the Act and not a provision of the caretaker conventions.

There was the number stuff-up from Treasury on the first day of the process and providing a team sheet to Deputy Chief Minister Andrew Barr’s office of who attended a meeting between the department and the Liberal looks a little uncool (Towell, 2012).

It seemed that in the charged atmosphere of an election the construction put on events will depend on the perspectives of the antagonists, and absolute care must underpin the operations of the Act.

The confidentiality provisions in the Act ensure that a party’s policies are not known to other political parties prior to their announcement and release of the costings under the Act. This aspect was of considerable importance in framing the Bill (see Report by the Select Committee on the Election Commitments Cost Bill 2011 Exposure Draft – Inquiry into Elections Costings Bill 2011 Exposure Draft, ACT Legislative Assembly, 7 June 2012) as it is essential that a party is in control of its own campaign and commitments. Thus, any breach, or perception of a breach in confidentiality is of crucial importance to the operations of the Act, and its voluntary nature.

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In actuality no breaches of confidentiality occurred. However it may be considered prudent to broaden the confidentiality provisions to include any aspect of any dealings that Treasury has with political parties in the course of undertaking election costings.

In the spirit of developing a level playing field, it was also suggested in interview that the Guidelines on which the Act depends for implementation be tabled in the Assembly before it rose for the election as an act of good faith. The current set of Guidelines were considered to be effective and appropriate by all parties (“a standout reform” in the eyes of one Party), and this suggestion was made more with the intention of maintaining the collaborative nature of the development of the Act and commitment to its operation than in seeking to alter the guidelines. In 2012, the Bill passed the Assembly on the last sitting day of 24 August, the Guidelines were issued on 31 August, the election costing period commenced on 3 September and the caretaker period commenced on 14 September. Advancing the tabling of draft Guidelines within such a timeframe would not seem insurmountable, and possibly assist the costing exercise. Such an approach may also lead to consultation across the Parties in the preparation of the guidelines.

4.2. Implementation of the ActThe Review also examined how the Act actually performed, and whether there were particular aspects of implementation that could be improved.

In all, 373 proposals were submitted at a level of refinement that allowed Treasury to accurately cost the impact. Of the costings 368 were released prior to the election for public scrutiny.

The five costings not released were only received on the afternoon of the “cut-off” time specified in the issued Guidelines, under which no costings were to be released after 10pm on the Thursday immediately prior to polling day. As such there was insufficient time for Treasury to provide appropriate costings for these items and they were taken to be withdrawn, with a notice placed on the Treasury website to that effect.

All Parties considered that they and other Parties had complied with the intent and requirements of the Act. Further, there was little public discussion of any apparent non-participation or non-compliance by the political parties. Parties reported that the Act had, if anything strengthened the formulation and specification of their election platforms compared to previous elections. The provisions of the Act where compliance issues could possibly have arisen were in relation to processes informing the submission of commitments and wrongful release of costings. Neither of these concerns arose in 2012.

All the Parties and the Treasury considered that timelines in the legislation had been adhered to and met. Five costings from the 373 submitted had not been costed before Election Day, and so were “taken to have been withdrawn” under Sections 9(5) and 10(5) of the Act. This meant that five proposals from the ALP were not available for public scrutiny prior to polling day. As can be seen from Figure 3 showing the days on which Treasury officially recorded costing requests as being received, there was a significant build up in numbers, and therefore work for Treasury, late in the election period.

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Figure 3. Costing Submission by Party

Note: Figure 3 does not include withdrawn requests.

Source: ACT Treasury data compiled for the Review by CMTD.

This distribution raises the issue of whether the timing requirements of the Act could be exploited by to party political advantage by avoiding public scrutiny of their commitments. This has certainly been an issue in recent Federal election campaigns in which political parties have criticised their opponents for not submitting proposals with adequate time for costings to be undertaken under the Commonwealth “Charter of Budget Honesty” Act.

However, under the ACT approach, Parties are not obliged to submit costings by law. The Act is “voluntary” in that Parties “may” submit commitments. The Act relies on political pressure to achieve conformance, and this notion also applies to timing issues. The ACT Act allows proposals to be submitted at anytime in the “costing period” which runs from one week after the last sitting day of the Legislative Assembly till when the Chief Minister is elected on the first sitting day after the election.

If a Party wished to avoid scrutiny of particular costings, while still being seen to conform to the expectations under the Act, lodging a large number of requests just days before polling day would mean in practice Treasury costings would not be available in time for consideration by the electorate before votes were cast. The Guidelines provide for a cut-off of the Thursday immediately prior to polling day as a way to ensure public scrutiny of commitments, stating “the general public, media and candidates require adequate time to review the election commitment costings before polling day so as to make informed decisions”.

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One possible change to the Act would be to impose a requirement on Parties to lodge a request no later than two weeks prior to polling day to allow adequate time for costings to be completed and released. This may have the unintended consequence of delaying all requests until the cut-off date, Treasury then being overwhelmed and unable to cost all proposals by polling day. It would also be inconsistent with the intention of the Act of not constraining the conduct of a Party’s election campaign as all commitments would need to have been announced a fortnight before polling day.

A possible alternative that maintains the current self-nomination and “political pressure” basis of the Act would be to require Treasury as part of their public release obligations to maintain and disclose the progressive counts of numbers of requests from each party. In this way, the information would inform the political debate, and comparative performances of parties could become an issue for public scrutiny if significant differences became apparent in the timing of proposals being submitted for costing and public disclosure. This information was able to be derived from the information provided on the Treasury website, but not in an aggregated manner to ease access.

In accordance with the Guidelines, the Director-General was required to “endeavour to complete and release a costing within five working days from the start of the next working day after receiving the request” (Guidelines, page 10). Of the 368 completed costings, 80 percent of costings were completed within 5 days, with 75 (20%) taking more than 5 days. 92% were completed within 7 days, and 99% within 10 days. This is a considerable achievement by Treasury, particularly noting that 280 (76%) of requests were received in the last two weeks of the period. Where costings are complex and if additional material is required, it is recognised in the Guidelines that these may take more than 5 days to complete, and the Director-General is obliged to inform the requestor, and endeavour to complete all costings prior to polling day.

Figure 4. Costing Duration Analysis

Source: ACT Treasury data compiled for the Review by CMTD.

The late build up of commitments being submitted also had an impact on Treasury’s management of the workload. They reported that they were stretched, and relied on marshalling additional internal

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resources to meet the workload. A more uniform workload would have assisted in their ability to respond, and avoid unacceptable pressure on individual Treasury officials. Treasury routinely sought advice as necessary on technical matters from Directorates. Correspondence with Directorates was undertaken utilising standard templates which specified the confidential nature and requirements of the costing work. This meant the confidentiality provisions were not a particular issue as the work was restricted to a small number of officers. Treasury used the same methodology, and largely the same personnel as for the ACT Budget, and the costings were of a quality consistent with Budget estimates.

Clarification with the Parties was seen by all concerned to be effective in ensuring sufficient details were available to complete costings accurately and to the satisfaction of the parties.

The 2012-13 Pre-election Budgetary Update was released on 20 September 2012 prior to the election (as required under the Financial Management Act 1996, s.20C). The Election commitment costing assumptions and general methodology were available on the Treasury website. The costing of election commitments can be seen as a necessary complement to s.20C in providing the full budgetary outlook after the addition of the policies of the respective Parties to the common starting point included in the Pre-election Update.

The proforma used, and the explanatory material included as part of the released costings were considered succinct and adequate by all participants. Treasury considered that having the key assumptions released as part of the costing significantly assisted in finalising costings with the proponents and, on occasion, improved the specification of the commitment.

The transparency of the costing approach was welcomed by the Parties and there were no apparent concerns about the way Treasury undertook the costings during the election period.

One issue that did arise was that there was some difference as to the forward period over which costings would be projected. The Guidelines clearly set out the methodology and assumptions for the costings exercise including the period the costings would cover (namely, the current/budget financial year and the following four forward years). The Canberra Liberals costings only covered 3 forward years, with a footnote identifying this discrepancy. This makes direct comparisons between Parties by the electorate more difficult and therefore would be better to avoid in future elections. One possible course of action is to seek political commitment to the period through consultation on draft guidelines prior to the Assembly rising for the election.

Treasury indicated that there were no disagreements over the assumptions underpinning the costings issued. This was confirmed at interview with all Parties; although it was noted that on occasion Treasury would need to explain how they reached a particular costing. This was viewed to be a strength of the process in the sense that it provided Parties with a more informed understanding of Territory financing. All Parties confirmed that they had experienced good relationships with Treasury in their implementation of the Act, and constructive and professional interactions had been the hallmark of the process. Given the acceptance of the accuracy and fairness of the costings by all participants, the Review did not submit actual costings to an independent “second pass” scrutiny to assess their accuracy.

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No register of hits on the Treasury website are available for the relevant pages to determine actual utilisation by the public of released costings. The absence of any public outcry or complaint about difficulty in gaining access to relevant information suggests that it was adequate for the purposes for which the information is used in the election process.

4.3. Estimated CostsTreasury supplied the Review with an estimated cost of $ $460,000 for the resources utilised to undertake the costings. The effort represented approximately 6,000 hours effort within the Treasury Directorate.

No attempt was made to estimate costs borne by Parties as it would be very difficult to isolate any additionality arising from the Act itself to the costs normally incurred in preparing policies for public release by Parties. In addition, the approach taken by the Parties is most likely to have varied between making every effort to provide detailed, already audited costings to Treasury to verify and a less detailed approach with lower cost to the party.

In a sense, the costs to the public are not a relevant consideration to the assessment of the Act (and they are not included in the terms of reference for the Review) as the legislation requires certain actions to be performed by the ACT Public Service regardless. There is no specific appropriation for this purpose and therefore the level of effort, rightly, is not determined by a pre-set budget but the numbers and complexity of commitments which result in a request to cost. The above costs are included here only as part of the public record.

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5. Findings and SuggestionsThe 2012 Election Commitments Costing Act may be viewed a success both in terms of achieving its legislative intent and in its operationalization. In providing Parties in the ACT with an efficient and effective election commitments costing process, it also provided additional benefits at both political and bureaucratic levels. For example, there is evidence that the Act has increased political awareness of how ACT government works and helped to foster constructive working relationships between Treasury and the political parties. However, there is only “anecdotal” evidence that the Act has conferred direct benefits to the local citizenry and improved the quality and voracity of public policy debate during the election campaign. It can be viewed as no more than “anecdotal” evidence because appropriate data was not collected during the process to provide empirical validation of this type of knowledge claim.

Figure5. Critical success factors and their interaction

Conceptual constraints and triggers (how participants

understood the Act)1.Political parties2.Treasury3.Degree of cooperative behaviour

achieved

Institutional constraints and triggers

Policy design

1.Clear and consistent objectives2.Effective coordination of process3.Clear roles for implementing agency4.Clear decision rules for

implementing agency5.Effective project management tools

Resources

7.Adequate allocation of financial resources

8. Effective base-line data9.Recruitment of project officers with

adequate skills/training10.Effective and sensitive performance

measurement11.Inclusive policy process12.Formal access by participants13.Communication of success

Environmental constraints and triggers affecting implementation

1.Socio-economic conditions and technology2.Public support3.Attitudes and resources of constituency groups4.Support from politicians5.Media perceptions

The Implementation ProcessProject outputs of implementing agency

Compliance with project outputs by target groups

Actual impacts of project outputs

Perceived impacts of project outputs

Major revision in project

Key

Green = positive trigger ; Amber = as yet no gravity of evidence; Red = potential constraint

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Figure 5, presents an overview of the critical success factors (or triggers) and constraints underpinning the implementation of the Act. There were a broad range of critical success factors at play but the most important can be identified as: the inclusive approach that was adopted to policy formulation thus ensuring that the Act was implemented with a broad sense of ownership; sound project management of the costing process by Treasury; and, the establishment of cooperative behaviours between Treasury and political parties. The key constraints can be identified in terms of the need for data collection and performance measurement.

Several possible improvements to the implementation governance of the Act were identified in the findings of the Review that could be considered by the Assembly.

Perceptions by the Parties of the potential for “game playing” under the Act could be reduced by considering the suggestions below in terms of the scheduling and the timing of the release of costings.

1. Parties, if they considered it useful in their campaign strategy, could be allowed to submit requests that they have not yet publicly announced provided that they specify a date when the commitment will be publicly announced so that Treasury can publish the costing on that day. The same requirements around withdrawing a request should still apply as presently defined.

This suggestion would allow Parties to better manage their own campaigns while maintaining the fundamental principles of the current Act. The downside to this suggestion is that it could lead to a loss of flexibility for Parties to reschedule release of commitments after their early submission if they wished to vary their campaign strategy. There is also the risk that Parties submit costings and then withdraw them prior to public announcement due to a change in policy direction. This would negatively impact Treasury’s workload.

2. Treasury could maintain and publicly issue a running “tally” for each major party during the election campaign.

This proposal would provide public information on the fiscal position of the Parties, and is in line with the release of the pre-election budget update in ensuring key budgetary matters are available to the electorate during the election period. The downside to this suggestion is that, at any point in time, the released progressive totals would reflect the timing of submitted commitments for costing and not the full fiscal impact of Party commitments. This could provide a misleading picture of the various positions of the Parties until the end of the election period. It may also provide an incentive for Parties to delay their costing requests. In any event, the release of the costings would allow any interested person or the media, if they wished, to compile such a tally.

3. The confidentiality provisions of the Act could be broadened to include any aspect of any dealings that Treasury has with the Parties in the course of undertaking election costings, and so avoid concerns that the incumbent Government had access to information that could be used against other contestants in the campaign.

This suggestion would strengthen the trust of the parties and electorate in the Act, but would need to take account of existing caretaker conventions applying for the same period.

4. As part of the ongoing monitoring of the Act’s impact, Treasury (or another commissioned body) could compile a data base of access to, and media reporting on election costings material. This could include recording the numbers visiting the information on the Treasury website.

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This suggestion would respond to the broader observation as to whether effective monitoring systems are being designed into the operations of the Act to ensure that appropriate data is being collected to evaluate whether the legislation is meeting its public information purpose and facilitating higher quality public policy debate.

5. As an act of good faith, the Guidelines on which the Act depends for effective implementation could be tabled before the Assembly rises for the election to allow for parliamentary scrutiny, and discussion if warranted, of its provisions.

While the Guidelines issued for the 2012 Election were not in dispute, tabling of future draft Guidelines in the Assembly would help foster commitment to and trust in the Act by the Parties. Going a step further and making them subordinate legislation as disallowable instruments runs the risk of negating these benefits through potentially making them an item for contention and dispute.

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http://www.smh.com.au/federal-politics/to-cost-or-not-to-cost-policies-20121005-274m6.html. Accessed 10/07/2012.

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