Senate

Revised Explanatory Memorandum

(Circulated by the authority of the Deputy Prime Minister and Treasurer, the Hon Wayne Swan MP)

Chapter 1 - Amendments to the Parliamentary Service Act 1999

Outline of chapter

1.1 Schedule 1 to the Parliamentary Service Amendment (Parliamentary Budget Officer) Bill 2013 (the Bill) amends the Parliamentary Service Act 1999 (PS Act) to give the Officer the function of preparing a report including costings of designated Parliamentary parties' election commitments within 30 days after a government forms following a general election. Schedule 1 also introduces a specific information-gathering process for the Parliamentary Budget Office (PBO) to facilitate the preparation of the post-election report and of policy costings during the caretaker period. Schedule 2 to the Bill removes the requirement for the Officer, or an SES employee of the PBO, to be a member of the Security Management Board.

Context of amendments

1.2 The Officer and the PBO were established as a fourth Parliamentary department by the Parliamentary Service Amendment (Parliamentary Budget Officer) Act 2011 . The PBO's purpose is to inform the Parliament by providing independent and non-partisan analysis of the budget cycle, fiscal policy and the financial implications of proposals.

1.3 Currently, the PBO supports the Officer in performing five functions:

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outside of the caretaker period - preparing policy costings on request by Parliamentarians;

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during the caretaker period - preparing policy costings on request by authorised members of Parliamentary parties, or independent members;

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preparing responses (other than policy costings) to Parliamentarians' requests relating to the budget;

•

preparing submissions to inquiries of Parliamentary committees at the request of committees; and

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conducting research on and analysis of the budget and fiscal policy settings, on the Officer's own initiative.

1.4 The amendments in this Bill are intended to enhance transparency in fiscal policy debate in Australia, by requiring the Officer to publish policy costings of designated Parliamentary parties' election commitments by 30 days after a general election.

Summary of new law

1.5 Schedule 1 to the Bill amends Part 7, Division 2 of the PS Act to provide the Officer with the additional function of producing a post-election report that includes policy costings of designated Parliamentary parties' election commitments, and indicates the total combined financial impact of those commitments.

1.6 Schedule 1 also sets out a specific process for the PBO to obtain information from Commonwealth bodies to facilitate the preparation of the post-election report and the preparation of policy costings during the caretaker period. For these purposes, the Officer may request information from Heads of Commonwealth bodies, and those bodies must comply in time for the information to be considered in the preparation of the report or costing (subject to certain exceptions). In relation to the post-election report only, the Officer may request information from designated Parliamentary parties and certain other persons. These processes complement but do not replace the existing arrangements under section 64F of the PS Act.

Comparison of key features of new law and current law

Detailed explanation of new law

Post-election reports of publicly announced election commitments

1.7 The Officer's current functions are set out in section 64E of the PS Act. The Bill inserts a new function: to report on election commitments of designated Parliamentary parties after a general election. [Schedule 1, item 5, paragraph 64E(1)(da)]

Contents of the report

1.8 The post-election report is to include costings of the election commitments of designated Parliamentary parties. It is to set out, for each designated Parliamentary party, the total combined impact those policies would have on the Commonwealth budget for the current financial year and the following three financial years. [Schedule 1, item 10, subsection 64MA(1)]

Policy costings of election commitments

1.9 It is part of the Officer's current functions to prepare policy costings. Outside the caretaker period for a general election, the PBO prepares policy costings on request by Parliamentarians (which may be treated as confidential on request). During the caretaker period, the PBO prepares policy costings on request by authorised members of Parliamentary parties or independent members (which are to be publicly released by the Officer).

1.10 The policy costings for inclusion in the post-election report are the election commitments of designated Parliamentary parties which the Officer reasonably believes, in his or her best professional judgment, would have a material impact on the Commonwealth budget sector and Commonwealth general government sector fiscal estimates for the current financial year and the following three financial years (see below, 'Election commitments'). [Schedule 1, item 10, paragraph 64MA(1)(a)] These costings may or may not have been prepared previously at the request of such parties. If the PBO had prepared relevant policy costings prior to the release of the latest budget report released under Schedule 1 to the Charter of Budget Honesty Act 1998 (the Charter), which is likely to be the pre-election economic and fiscal outlook, the costings would need to be updated to reflect the most recent economic forecasts and parameters and fiscal estimates. [Subsection 64E(3) of the PS Act]

Total impact of election commitments

1.11 The post-election report is to set out, for each designated Parliamentary party, the total combined impact the election commitments of those parties would have on the Commonwealth budget sector and Commonwealth general government sector fiscal estimates for the current financial year and the following three financial years. [Schedule 1, item 10, paragraph 64MA(1)(b)]

1.12 This is intended to provide an indication of the total impact a designated Parliamentary party's election platform would have on the Commonwealth budget, if their election commitments were enacted as announced. Consistent with budget reports prepared under the Charter, totals are to be presented for the current financial year and the following three financial years.

Information not included in the report

1.13 The post-election report does not have to include information that the Officer considers should not be included because it is confidential commercial information, or because its disclosure could prejudice national security. [Schedule 1, item 10, subsection 64MAA(5)] This is consistent with the requirements for budget reports under the Charter (see, for example, subclause 24(5) of the Charter).

1.14 The post-election report must not include information given to the Officer by the Head of a Commonwealth body, under the relevant information-gathering power, if the Head has requested that the information be kept confidential (see below under 'Consequential amendments'). [Schedule 1, item 10, note to subsection 64MAA(5)]

The report may be qualified

1.15 If the Officer does not have sufficient information, or has not had sufficient time, to assess the cost of an election commitment, this may be noted in the post-election report. [Schedule 1, item 10, subsection 64MAA(6)]

Election commitments

1.16 The Bill introduces a definition of 'election commitment' into the Parliamentary Service Act 1999 (the PS Act). An election commitment, in relation to a general election, is a policy that a Parliamentary party has publicly announced it intends to seek to have implemented after the election. [Schedule 1, item 2A, section 7]

1.17 The definition is a broad one, capturing any policy that a Parliamentary party has publicly announced it intends to seek to have implemented after the election. This could be an announcement of a policy the party intends to introduce if it forms government following the general election. Or it could be a policy the party intends to introduce legislation to implement, or (if the party is not in government) to lobby the government to introduce. To be an election commitment, the policy must be publicly announced, and it must be the party's announced intention to seek to have it implemented after the election.

1.18 The election commitments to be costed and included in the post-election report are all the election commitments of designated Parliamentary parties which the Officer reasonably believes, in his or her best professional judgment, would have a material impact on the Commonwealth budget sector and Commonwealth general government sector fiscal estimates for the current financial year and the following three financial years.

Designated Parliamentary parties' lists of election commitments

1.19 Lists of election commitments are to be provided by the designated Parliamentary parties to the Officer. By 5 pm on the day before polling day for the general election, each designated Parliamentary party must give the Officer a list, in writing, of the policies that the party has publicly announced it intends to seek to have implemented after the election. [Schedule 1, item 10, subsection 64MA(3)]

1.20 On the day after polling day, the Officer must release publicly each list given to it by a designated Parliamentary party. If a designated Parliamentary party has not given a list to the Officer, the Officer is to release a statement to this effect. [Schedule 1, item 10, subsection 64MA(4)]

The Officer's list of election commitments

1.21 Within three days after the end of the caretaker period for a general election, the Officer must prepare - for each designated Parliamentary Party - a list of all that parties election commitments which the Officer reasonably believes, in his or her best professional judgment, would have a material impact on the Commonwealth budget sector and Commonwealth general government sector fiscal estimates for the current financial year and the following three financial years. [Schedule 1, item 10, subsection 64MA(5)]

1.22 In preparing these lists, the Officer must have regard to any list of policies given to the Officer by designated Parliamentary parties (see above, 'Designated Parliamentary parties' lists of election commitments'), and any public announcements made by the party before or during the caretaker period for the election. [Schedule 1, item 10, subsection 64MA(6)] .

1.23 It is a matter for the Officer's best professional judgement what is included on the Officer's list of a designated Parliamentary party's election commitments. A policy need not be included in the Officer's list simply because it was on a party's list, or because it was publicly announced by a party. This is to ensure that, if designated Parliamentary parties do not provide a list of election commitments to the Officer, or provide an incomplete list, the Officer can still prepare a comprehensive post-election report.

1.24 The post-election report is not required to include policies that are not election commitments (that is, that do not meet the definition of election commitments), or election commitments that the Officer does not reasonably believe would have a material impact on the Commonwealth Budget.

Consultation on the Officers list of election commitments

1.25 After the Officer has prepared his or her list (but in any event, no later than three days after the end of the caretaker period), the Officer must give each designated Parliamentary party the Officer's list of that party's election commitments. If the Officer's list differs from a list provided by the party by 5 pm on the day before polling day, the Officer must give the party a statement explaining the reasons for the difference. [Schedule 1, item 10, subsection 64MA(7)]

1.26 Designated Parliamentary parties then have an opportunity to comment on the Officer's list of their election commitments. Within three days after receiving the Officer's list, a designated Parliamentary party must give the Officer comments on that list. [Schedule 1, item 10, subsection 64MA(8)]

1.27 The Officer may take account of any comments received by designated Parliamentary parties in response to the Officer's list. However, the Officer is not required to take account of these comments. [Schedule 1, item 10, subsection 64MAA(2)] The decision about which election commitments to include in the post-election report is for the Officer to make, not the designated Parliamentary parties.

1.28 The post-election report must set out any comments a designated Parliamentary party gave to the Officer concerning the Officers list of that party's commitments. If a designated Parliamentary party did not give the Officer any comments, the post-election report must include a statement to that effect. [Schedule 1, item 10, subsection 64MAA(3)]

Election commitments not to be included in the report

1.29 The post election report must include costings of the election commitments of the designated Parliamentary parties that the Officer reasonably believes would have a material impact on the Commonwealth budget. [Schedule 1, item 10, subsection 64MA(1)] However, the report must not include costings of election commitments other than those in the Officer's list provided to the designated Parliamentary parties, or referred to in comments given by the parties to the Officer in response to the Officer's list. [Schedule 1, item 10, paragraph 64MAA(4)(a)]

1.30 This is to ensure that the list of election commitments to be included in the report is settled as soon as possible after the caretaker period ends. It means that, after the designated Parliamentary parties have had an opportunity to comment on the Officer's list, there is no further scope to influence the Officer's decision making about the election commitments to be costed. It also means that, after commenting on the Officer's list, designated Parliamentary parties will know the full list of its election commitments that may be included in the report; the Officer will not be able to add new election commitments to the list after that time.

Reasons for including an election commitment

1.31 The post election report must, for each election commitment that is costed in the report, explain the reason the Officer has decided it is an election commitment and reasonably believes would have a material impact on the Commonwealth budget, and indicate the source of the information from which the Officer identified the election commitment. [Schedule 1, item 10, paragraph 64MAA(4)(b)]

1.32 This is intended to make it clear why each election commitment is included in the report. This will be particularly important in cases where the post election report includes an election commitment that was not included on a list provided by a designated Parliamentary party.

1.33 The report would note the source of the election commitment. For example, the report might note that a particular election commitment was included in a list of policies provided by the designated Parliamentary party by 5 pm on the day before polling day, that it was identified by the party in providing comments on the Officer's list, that it was announced in a particular media release or was published on a particular website.

Designated Parliamentary parties

1.34 Only the election commitments of designated Parliamentary parties are to be included in the report. Broadly, a designated Parliamentary party is a political party with five or more members in the Commonwealth Parliament before the election. This is intended to strike a balance between ensuring most election commitments made during an election campaign are included in the report, and the practicality of delivering a rigorous report within 30 days.

1.35 A 'designated Parliamentary party' is to be defined in section 7 of the PS Act as a political party, during a caretaker period for a general election, at least five members of which were members of the Parliament of the Commonwealth (Parliamentarians) immediately before the caretaker period. [Schedule 1, item 2, section 7] A party with four, three, two, one or no Parliamentarians before the caretaker period would not be included in the post-election report, even if the party has five or more Parliamentarians after the election. A party with five or more Parliamentarians before the caretaker period would be included in the post-election report, even if it has four Parliamentarians or fewer after the election.

1.36 For the purposes of the post-election report, the Officer may treat two or more Parliamentary parties (being any political party with at least one Parliamentarian) as a single designated Parliamentary party if:

•

those parties would, if they had been a single political party during the caretaker period, have been a designated Parliamentary party during that period; and

•

those parties, in writing, jointly request the Officer to do so. [Schedule 1, item 10, subsection 64MA(2)]

1.37 This provision is intended to allow the post-election report to have a single section for the election commitments of a coalition made up of a number of Parliamentary parties. The parties forming part of the coalition must be Parliamentary parties, but need not have been designated Parliamentary parties in their own right. For example, a coalition of a party with seventy Parliamentarians, a party with ten Parliamentarians and a party with two Parliamentarians could be treated as a single designated Parliamentary party, if each of the parties request that the Officer do so. A party with four Parliamentarians and a party with one Parliamentarian could also be treated as a single designated Parliamentary party, if each of the parties request that the Officer do so. The Bill does not prescribe a time for this request to be made; the request should be made within time for the PBO to act on it.

Information-gathering for the post-election report

1.38 Currently, the Officer is able to request and acquire information for the purposes of carrying out its functions. There is a framework for obtaining information from Commonwealth bodies set out in section 64F of the PS Act. Section 64F allows an arrangement - such as a Memorandum of Understanding - to be made between the Officer and the Head of a Commonwealth body for the provision of information and documents relevant to the Officer's functions.

1.39 This Bill complements the existing section 64F by introducing a specific information-gathering process for the post-election report. However, nothing in this specific process limits any other power of the Officer to obtain information, including under an arrangement in place for section 64F. [Schedule 1, item 10, subsection 64MB(8)]

1.40 A similar process is to be introduced for policy costings requested during the caretaker period (see below 'Information-gathering for caretaker costings').

Information about election commitments

1.41 If the Officer needs more information about a policy it is costing for the purposes of the post-election report, he or she may ask an authorised member of the Parliamentary party that announced the policy, or certain third parties, for that information. [Schedule 1, item 10, subsection 64MB(1)]

1.42 An 'authorised member' of a Parliamentary party is defined in section 7 of the PS Act as either the Leader of the Parliamentary party, or a member of the Parliamentary party that the Leader has authorised to act in relation to relevant provisions of the PS Act. Since only the policies of designated Parliamentary parties are included in the post-election report, only authorised members who are members of designated Parliamentary parties will be asked for information under this provision.

1.43 The Officer may also ask any other person for information needed to prepare the post-election report, if the Officer has reasonable grounds to believe that the person has been associated with the calculation, review or announcement of the financial implications of a policy that is to be costed. [Schedule 1, item 10, paragraph 64MB(1)(b)] This may include, for example, a person who prepared or audited policy costings for the purposes of a designated Parliamentary party's policy announcement.

1.44 Neither an authorised member of a Parliamentary party nor a relevant third party is required to comply with or respond to a request for information under this provision. Similar to the provisions of the Charter, this information-gathering process does not create rights or duties that are enforceable in judicial or other proceedings. [Schedule 1, item 10, subsection 64MB(9)] Rather, it establishes a cooperative mechanism for providing information to the PBO.

Information from Commonwealth bodies

Information requests

1.45 To help the Officer prepare the post-election report, the Officer may - during the caretaker period and the 30-day period after caretaker - request the Head of a Commonwealth body to give information to the Officer. [Schedule 1, item 10, subsections 64MB(2) and (3)]

1.46 The Head of a Commonwealth body must comply with such a request in time for the information to be taken into account in preparing the post-election report. [Schedule 1, item 10, subsection 64MB(4)] The Head does not have to comply with a such a request if:

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it is not practicable to do so;

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it would be unlawful to do so;

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it would require the disclosure of confidential commercial information; or

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it would require the disclosure of information that could prejudice national security. [Schedule 1, item 10, subsection 64MB(4)]

1.47 This provision reflects the information-provision process in clause 32 of the Charter, which applies when the Secretaries of the Departments of the Treasury and of Finance and Deregulation (the 'responsible Secretaries') are preparing policy costings of election commitments.

1.48 The provision is also intended to protect information that is commercially confidential or that could prejudice national security if disclosed (which, in any event, may not be included in the post-election report). Additionally, the Head of a Commonwealth body may request that some or all of the information it provides to the Officer be kept confidential, imposing certain confidentiality obligations under section 64V of the PS Act. [Schedule 1, item 10, subsection 64MB(5)]

1.49 Like the process for seeking information from designated Parliamentary parties and certain third parties, this process does not create rights or duties that are enforceable in judicial or other proceedings. [Schedule 1, item 10, subsection 64MB(9)] The measure establishes a cooperative mechanism for sharing information held by Commonwealth bodies for the purposes of costing election commitments.

Charter costings

1.50 As soon as practicable after the end of the caretaker period, the responsible Secretaries are to give the Officer any policy costings that had been prepared during the caretaker period under the Charter. [Schedule 1, item 10, subsection 64MB(6)] Again, this does not create enforceable rights or duties.

1.51 Under Part 8 of the Charter, the Prime Minister, the Leader of the Opposition and the Leader of a minority party may ask the responsible Secretaries to prepare costings of any of the party's publicly announced policies. These costings, once prepared, are released publicly by the responsible Secretaries.

1.52 The Officer may include a policy costing from the responsible Secretaries in the post-election report, if the costing is for a policy that is on the list to be included in the report. However, the Officer is not required to do so, and may prepare a new costing of the same policy for inclusion in the report. [Schedule 1, item 10, subsection 64MB(7)] The Officer therefore is responsible for which costings appear in the report.

Publishing the post-election report

1.53 The post-election report is to be publicly released no later than 30 days after the end of the caretaker period for a general election. [Schedule 1, item 10, subsection 64MC(1)]

1.54 The 'caretaker period' is already defined in section 7 of the PS Act, as having the same meaning as in the Charter. The caretaker period is there defined, for a general election, as the period starting when the House of Representatives expires or is dissolved, and ending when it is clear that the government has been re-elected or, if there is a change of government, when the new government has been sworn in. The 30-day period in which the report is to be prepared therefore begins on the day after a government forms following a general election; this may or may not be the day after polling day.

Consultation with designated Parliamentary parties

1.55 The Officer is to give each designated Parliamentary party a copy of that part of the report which sets out costings and totals for that party's election commitments at least 48 hours before publicly releasing the post-election report. [Schedule 1, item 10, subsection 64MC(2)] The part of the report must be accompanied by a notice informing the party that the part of the report must be kept confidential, and requesting any comments from the party. [Schedule 1, item 10, subsection 64MC(3)] If the Officer is given comments from the party, it may include the comments in the report, or revise the report to take account of the comments, if it is practicable to do so. [Schedule 1, item 10, subsection 64MC(4)]

Information-gathering for caretaker costings

1.56 The Bill introduces a specific information-gathering process for the preparation of the post-election report, in recognition of the statutory timeframe of 30 days in which the report must be prepared. Timeframes just as confined apply to the Officer when preparing policy costings during the caretaker period; the Officer must publicly release such costings as soon as practicable after a request has been made. For this reason, a similar information-gathering process applies during the caretaker period in relation to this function.

1.57 To help the Officer prepare a policy costing requested during the caretaker period, the Officer may request the Head of a Commonwealth body to give information to the Officer. [Schedule 1, item 9, subsection 64KA(1)] The Officer may make a request in relation to a costing request received before polling day on any day after receiving the costing request up to the day before polling day. [Schedule 1, item 9, paragraph 64KA(2)(a)] The Officer may make a request in relation to a costing request received on or after polling day on any day after receiving the costing request up to the end of the caretaker period. [Schedule 1, item 9, paragraph 64KA(2)(b)]

1.58 The Head of a Commonwealth body must comply with such a request in time for the information to be taken into account in preparing the relevant policy costing. [Schedule 1, item 9, subsection 64KA(3)] The Head does not have to comply with a such a request if:

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it is not practicable to do so;

•

it would be unlawful to do so;

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it would require the disclosure of confidential commercial information; or

•

it would require the disclosure of information that could prejudice national security. [Schedule 1, item 9, subsection 64KA(3)]

1.59 This reflects the information-provision process in clause 32 of the Charter, which applies when the responsible Secretaries are preparing policy costings of election commitments. It is appropriate that similar processes apply for similar tasks in similar circumstances.

1.60 Similarly, this measure is also intended to protect information that is commercially confidential or that could prejudice national security if disclosed. Additionally, the Head of a Commonwealth body may request that some or all of the information it provides to the Officer be kept confidential, imposing the confidentiality obligations under section 64V of the PS Act. [Schedule 1, item 9, subsection 64KA(4)]

1.61 Like the process relevant to the post-election report, and the processes in the Charter, this measure does not create rights or duties that are enforceable in judicial or other proceedings. [Schedule 1, item 9, subsection 64KA(6)] The measure establishes a cooperative mechanism for sharing information held by Commonwealth bodies for the purposes of costing election commitments. Similarly, nothing in this specific process limits any other power of the Officer to obtain information, including under an arrangement in place for section 64F. [Schedule 1, item 9, subsection 64KA(5)]

Security Management Board

1.62 Section 65A of the PS Act establishes a Security Management Board (the Board) comprising representatives from each of the four Parliamentary departments. The PS Act provides that the function of the Board is to provide advice as required to the Presiding Officers on security policy, and the management of security measures, for Parliament House.

1.63 Currently, subsection 65A(2) of the PS Act provides that the Board consists of:

•

the Secretary of the Department of Parliamentary Services, or an SES employee of that department nominated by the Presiding Officers in writing;

•

an SES employee of the Department of the Senate nominated by the President of the Senate;

•

an SES employee of the Department of the House of Representatives nominated by the Speaker of the House of Representatives; and

•

the Officer, or an SES employee of the Parliamentary Budget Office (PBO) nominated by the Presiding Officers in writing.

1.64 The Bill repeals paragraph 65A(2)(d) of the PS Act, removing the requirement for the Officer (or SES employee of the PBO) to be a member of the Board. [Schedule 2, item 1B] The amendments also amend paragraph 65A(2)(c), reflecting that the subsection now ends with that paragraph. [Schedule 2, item 1A]

1.65 As set out in paragraphs 1.2 and 1.3 above, the purpose of the PBO is to inform the Parliament by providing independent and non-partisan analysis of the budget cycle, fiscal policy and the financial implications of proposals. Unlike the other three Parliamentary departments, it has no role in the management of security for the Parliamentary precincts.

1.66 This amendment ensures that section 65A reflects the roles of the Parliamentary departments in relation to security policy, and the management of security measures, for Parliament House. Paragraph 65A(3)(a) of the PS Act provides that the Board may, with the written approval of the Presiding Officers, invite other members of the Parliamentary Service to attend its meetings. This provision enables the Officer, or his or her representative, to be involved in the work of the Board to the extent necessary.

Application and transitional provisions

1.67 The amendments in Schedule 1 to the Bill commence on the day after the Act receives the Royal Assent, and there are no specific application provisions. [Clause 2]

Consequential amendments

1.68 The Bill introduces a definition of 'responsible Secretaries' into the PS Act for the purposes of the PBO provisions. [Schedule 1, item 4, section 7] It is convenient to use this definition to support similar meanings in existing subsection 64G(1) and paragraph 64K(a). Therefore, the relevant words in those provisions are omitted and replaced with the words 'responsible Secretaries'. [Schedule 1, items 6 and 8]

1.69 The Bill also refers to an 'authorised member' of a designated political party, in connection with the new post-election report. The definition of 'authorised member' in section 7 of the PS Act is amended to reflect the additional responsibility of an authorised member. [Schedule 1, item 1]

1.70 Section 64V of the PS Act currently sets out confidentiality requirements for the PBO, including in relation to information provided to the PBO in accordance with an arrangement with a Commonwealth body under section 64F of the PS Act. The Bill amends section 64V to provide for the confidentiality of information provided under the information-gathering processes for the post-election report and for caretaker costings. The Officer, a Parliamentary Service employee assisting the Officer, or a person acting under the direction or authority of the Officer, must not disclose information given to the Officer under those information-gathering processes, if the Head of the Commonwealth body who provided the information requested that the information be kept confidential. [Schedule 1, item 12, subsection 64V(4A)] Such a person can disclose the information for the purpose of preparing the post-election report or caretaker costing, but the information must not be disclosed in the report. [Schedule 1, item 12, subsection 64V(4B)]