The PBO's main functions are to give budgetary and costing advice to parliamentarians, with two overall purposes. One is to reduce the imbalance in economic expertise available to non-government MPs compared with those enjoyed by the government, which can call on the resources of the Treasury and the Finance Department. The other is to increase general transparency of government finances by making more fiscal information open to the public and the media. The Australian PBO is part of a worldwide trend, with ''independent financial institutions'', as they are called, now operating in 17 OECD countries, though with varying functions and powers.

The PBO is required to prepare policy costings on request for parliamentarians, whether as individuals or on behalf of a political party. Outside the caretaker period, these costings may remain confidential if the requestor wishes. Costings made during the caretaker period fall under the Charter of Budget Honesty and must be made public.

While confidentiality of the costings process may conflict with the aim of improving transparency, it can be justified in the context of a highly adversarial political system. It allows parties and MPs to explore options and develop policies carefully without necessarily needing to defend them publicly.

However, as the Australian National Audit Office's report points out, confidentiality can limit the extent of information available to the PBO. The office relies heavily on information requested from government departments under a series of memoranda of understanding. In meeting the PBO's requests, departmental officials are sometimes restricted because they cannot be told about the policy context for which the information is needed. As a result, the quality of policy costings may suffer.

The ANAO did not attempt its own independent assessment of PBO costings; instead, it relied on the views of relevant stakeholders, particularly other agencies. While most stakeholders commended the professional quality of the office's analyses, the issue of confidentiality had certainly caused problems. In particular, PBO costings may sometimes lack sufficient assessment of associated administrative or implementation costs. Without full access to agency advice, it is impossible to judge how far a new policy can be incorporated within an agency's existing resources or whether it will demand the establishment of totally new administrative structures. The PBO itself is fully aware of this difficulty, which is the target of the ANAO report's sole recommendation: that the PBO include estimates of administrative expenses, where significant, in all costings.

Another factor limiting the PBO's access to the full range of budgetary information is the government's refusal to allow it access to details of spending covered by the Contingency Reserve. As the ANAO notes, the reserve is intended to be a general allowance in the budget for anticipated items that cannot be assigned to individual programs - that is, for ''contingencies'' as they are normally understood. It is not intended as a general policy reserve.

In practice, however, both ALP and Coalition governments have come to use the Contingency Reserve as a means of hiding the costs of politically sensitive programs, such as the operation of offshore facilities in Nauru and Manus Island for processing asylum-seekers. The Finance Department secretary's refusal to disclose details of the fund has therefore undermined attempts by the PBO to provide comparative costings of alternative policies in such areas. The ANAO is typically careful not to openly criticise the embargo but the inference is clear. A PBO that is not allowed access to all budgetary information is prevented from doing its job properly.

In general, however, the ANAO is complimentary about the quality of the PBO's costings. The office has performed efficiently with limited resources and in a short time (it was up and running in mid-2012, only a year out from last year's election). Much credit is due to the founding Parliamentary Budget Officer, Phil Bowen, who came to the post from the Asian Development Bank, but before that had headed the budget group in the Finance Department. That Bowen was an old Finance hand must have made for easy collegial relations with Finance and other relevant agencies critical to the PBO's success.

From the outset, Bowen has tried to align the PBO's technical methods and approaches as closely as possible with those practised by other government economists and modellers. Rather than setting out to establish an intellectual counterweight to the Treasury-Finance hegemony, which was the hope of some advocates of a PBO, he has encouraged his office to dovetail with the approach of other government advisers.

Given its limited staff resources, the PBO could not aspire to be a credible alternative to Finance and Treasury. Instead, its challenge to government thinking is more political than technocratic. The contest comes from the alternative policy preferences of non-government parliamentarians submitted to the PBO, not from alternative theoretical perspectives of the PBO's analysts. This approach makes a virtue out of necessity, tailoring opposition policies to the budgetary frameworks familiar to government departments and easing the transition on a change of government.

Overall, then, the PBO has succeeded in its main aim of improving policy support to non-government politicians. How far it has advanced its other objective of improving budgetary transparency is more open to question. As already noted, the confidentiality provision outside the caretaker period, while justifiable, trades transparency off against quality of policy development.

Moreover, in the run-up to the 2013 election, the Coalition was able to use this provision to avoid publishing its policy costings until the last minute. Under legislation, the costings of all policies submitted either to Treasury, Finance or the PBO during the caretaker period must be published as soon as possible. By submitting its policies to the PBO two days before the caretaker period officially began, the Coalition could claim confidentiality for the costings and delay their release until just before the election. The ANAO notes that this action was within the law and technically consistent with the Charter of Budget Honesty. But it also reports that some stakeholders viewed it as running counter to the trend for greater transparency fostered by the establishment of the PBO.

Another transparency function given to the PBO is the requirement to report on the election commitments of designated political parties within 30 days of the end of the caretaker period. In effect, the report is a consolidated account of all the various election policy costings conducted by Treasury and Finance as well as the PBO itself. The completed report in 2013, which runs to 60 pages plus 370 pages of attachments, put a large amount of information into the public arena in a very short time and was a ''major achievement'', in the words of the ANAO. How much impact it will make remains to be seen. Its publication in October raised little media interest, as all attention had then turned to the new government and its initial decisions. In media time, a month is a century. But the report may prove a useful repository of information in the long term.

Certainly, the level of transparency surrounding the budget process has greatly increased in the last two decades. The PBO has contributed to the trend, for example through its May 2013 report on the structural budget balance from 2001 to 2017. Major factors have also been the Charter of Budget Honesty and the growing importance of forward estimates and budget forecasting. The sceptical reception given to the Coalition's recent budget has demonstrated that incoming governments can no longer plausibly claim an unforeseen budgetary crisis as a rationale for tearing up their election promises. The premise justifying commissions of audit and the radical recasting of political priorities after an election victory has been exploded.

When the general budgetary position is well known and contains no surprises, oppositions can be assumed to make their election commitments in full knowledge of how their policies are to be funded. Any attempt to write off pre-election promises as having been made in ignorance of the budgetary situation appears as bad faith. This consequence was predictable and indeed predicted. Political commentators at the time noted the irony that Peter Costello's Charter of Budget Honesty would undermine the legitimacy of future treasurers who broke pre-election commitments as cavalierly as he had done. This insight, however, seems to have escaped the Coalition leaders and their business allies, who have been stunned that the trick played in 1996-97 has not worked this time round.

Richard Mulgan is an emeritus professor with the Crawford School of Public Policy at the Australian National University. richard.mulgan@anu.edu.au