Chris Bowen demands answers from Treasury over $387 billion tax costing


“In providing specific costings to the government at its request, Treasury advised they were all costed on a standalone basis but with interactions between the individual proposals not taken into account. For this reason we did not provide a total.”

The assurance makes it clear the Treasury analysis was a response to requests from the office of Treasurer Josh Frydenberg, whose staff outlined the parameters for the policies to be costed by the officials.

Secretary to the Australian Treasury, Philip Gaetjens, who was previously chief of staff to Scott Morrison and Peter Costello as Treasurers.Credit:Dominic Lorrimer

Mr Gaetjens stood by the Treasury’s work and noted the department would always do the work asked of it by the government of the day whenever there is a “lawful request” of the officials.

The Treasury Secretary noted a previous dispute over costings in 2012 when the department said it served the Australian people through the government of the day.

Prime Minister Scott Morrison said on Friday that the “Treasury costings” revealed $387 billion in higher taxes under Labor, while Mr Frydenberg said the estimate showed Labor would impose “$387 billion in new taxes” over a decade.

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Labor is furious at the government’s claim that its figures are based on “Treasury costings” when the department’s officials have previously told Senate estimates hearings they would not cost Labor policies.

Mr Bowen spoke to Mr Gaetjens on Friday morning and wrote to him soon afterwards to warn of his “deep concern” at the use of Treasury for the Coalition’s political advantage.

“It is critical that Treasury is seen as impartial and credible and not politicised by the government of the day,” Mr Bowen said in the letter.

“As you are aware, it has been a long-standing position by the Treasury that it does not cost opposition policies.

“This is a matter that has come up multiple times at Senate estimates over the last year and in correspondence with former Treasury Secretary, John Fraser.”

Labor has previously warned against the appointment of Mr Gaetjens to the position of Treasury Secretary on the grounds he was previously chief of staff to Mr Morrison as Treasurer and chief of staff to Peter Costello as Treasurer.

Mr Bowen said that Mr Morrison had been caught “lying” about the Labor policies.

The $387 billion estimate is the Coalition’s total based on Treasury estimates of policies including changes to negative gearing, dividend imputation and family trusts.

The estimates are close to those prepared by Labor itself based on work from the Parliamentary Budget Office.

The Coalition said it received the cost estimates from Treasury after the budget on April 2.

The $387 billion estimate shows the scale of the taxes under a Labor government over ten years according to its stated policies compared to the budget plan set out by the Coalition.

While the government has claimed these are “new taxes” on Australians, the biggest single component is $230 billion in revenue from Labor’s rejection of the Coalition’s personal income tax cuts. This means Labor is keeping the status quo rather than applying new taxes.

Another $157 billion in higher revenue comes from Labor policy initiatives from negative gearing, dividend changes, family trusts and superannuation.

David Crowe is Chief Political Correspondent of the Sydney Morning Herald and The Age.

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