Treasurer Jim Chalmers touted the figures, even though they were of “low reliability”. Photo: Michelle Kroll.
Treasurer Jim Chalmers’ use of Treasury officials to cost an Opposition small business tax break proposal has been criticised in Senate Estimates as an abuse of the public service as well as selective use of Coalition numbers.
Dr Chalmers recently jumped on a Coalition plan to allow small businesses to deduct up to $20,000 on hospitality for employees, saying the proposal would cost between $1.6 billion to $10 billion a year.
The Treasurer came to the conclusion after having the Opposition’s policy costed, even though he was told the figures were of “low reliability”.
According to email exchanges that were recently tabled in the Senate and discussed in Estimates hearings on Wednesday (26 February), Treasury also stressed that the proposal would only cost $500 million a year if the hospitality was restricted to meals only.
Dr Chalmers hadn’t mentioned any of that, not even after shadow treasurer Angus Taylor had said the policy would only apply to meals.
The Opposition insisted the policy would cost less than $250 million.
“We know this policy costs billions of dollars but we still don’t know what Peter Dutton would cut to pay for it,” Dr Chalmers said when releasing costing figures on 4 February.
“All we have got from them is lower wages for workers and longer lunches for bosses, with the taxpayers to foot the bill.
“This is the only kind of policy that could have been agreed at the tail end of a very long lunch.”
Treasury Secretary Steven Kennedy insists his department was not knowingly costing Opposition policy. Image: Treasury.
On Wednesday, however, Treasury Secretary Steven Kennedy told Estimates that his officials “did not consider” they were costing Coalition policy when asked to do the figures.
He added that Treasury would not cost policy if they were told it was an Opposition proposal.
“We costed a policy with parameters we were asked to cost,” he said.
He conceded his department was aware of a “similar” Coalition policy but said Treasury did not reference it when undertaking its costing exercise.
He said what the government did with the figures was “a matter for the Treasurer” and his department just did what it was asked to do and in the manner he had just explained to the hearing.
“I can’t go around second guessing how all our ministers will use the materials or briefing we provide to them,” Dr Kennedy said.
“It’s not appropriate for me to do [that].”
Liberal Senator Jane Hume referred to the earlier tabled email chain, in which one Treasury official tells his colleagues that the “devil really would be in the detail” with the costings and referred to a Coalition media release explaining how the policy would work.
Dr Kennedy said the internal email was sent after Treasury had already delivered its costings to the government.
“I drew confidence from the colleagues I had engaged in that they had behaved appropriately throughout the entire process, and I still believe they did,” he said.
“I’m not going to comment on how the Treasurer represented what we did, but I can tell you directly we did not cost the Opposition’s policy… If the government asks us to cost the policy with parameters, then it’s a lawful request, and we would cost that policy.
“I’ve been very clear in the documents that we did not consider that we were costing the opposition’s policy.”
Finance Minister Katy Gallagher jumped in to point out that former Treasury secretary Phil Gaetjens used the same explanation when asked to explain costings similar to Labor’s policies for Scott Morrison when he was Treasurer.
“The situation that is being examined here is exactly the same,” Senator Gallagher said.
Original Article published by Chris Johnson on Riotact.
