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In an election that has reduced government to accounting, pressure has mounted on the Coalition to "show us your costings".
Yesterday it did so. Joe Hockey told viewers: "All our policies are fiscally responsible and independently verified."
But three key policies were not submitted to the Parliamentary Budget Office for costing, as was foreshadowed by various media earlier in the week and confirmed yesterday. Those are its climate change policy Direct Action, its alternative broadband policy and its asylum seeker plan.
The Coalition admits that and says these policies have been given the tick by its panel of "eminent persons" – Peter Shergold, Geoff Carmody and Len Scanlan.
But it contradicts the claim made in a stock pamphlet being distributed this week in the seat of Sydney (and presumably nationwide).
The flyer, in this case endorsing Liberal candidate Sean O’Connor, states: "All Coalition policies are fully costed and fully funded."
There is a difference between having a policy "fully costed" and arriving at your own figure in a budget statement (which appears at the bottom of this page).
Let's deal with each case in turn.
On broadband, Malcolm Turnbull has previously told media that the PBO said it is unable to cost the Coalition's NBN alternative.
Abbott says nobody has been able to question the costings he released when the policy was announced in April. But the Coalition's own policy document admits: "The Coalition’s statements on costs are prepared in good faith, but conditional on full disclosure of NBN Co’s contractual obligations and finances, and the release of reliable Budget figures in the Pre-election economic and fiscal outlook (PEFO)."
The policy has not been resubmitted for costing since the PEFO. The Coalition's NBN doesn't appear in the statement released today, other than as a footnote on line item "public debt interest", which they count as a save of $1.3 billion over four years (because they won't need to raise as much debt).
On Direct Action, Abbott argues that the policy was looked at by Treasury following the 2010 election and they "found no fault with it".
Actually, a scathing Treasury note from July 2011 found that: "The economic costs of direct action would almost certainly be even larger because it would be less efficient than a market-based carbon price mechanism."
It also referenced Department of Climate Change and Energy Efficiency modelling which indicated Direct Action would only achieve a quarter of the abatement promised by the Coalition.
You can read that full statement here.
At any rate, costing a policy three years ago is not the same as having it costed today.
And on asylum seeker policy? Well, the PBO has looked at that one, but only the Nauru "tent city" component and only at the request of the Greens, using Greens' assumptions. The PBO found it could cost $1.9 billion over the forward estimates, with ongoing costs thereafter.
But that can't be considered an official costing of the Coalition's policy because it doesn't use the Coalition's assumptions.
As Parliamentary Budget Officer Phil Bowen stated last week: "When the PBO undertakes a confidential policy costing for an individual parliamentarian or political party, it relies solely on the policy details specified by that parliamentarian or political party."
The Coalition's budget statement released yesterday doesn't mention Nauru at all. Within its suite of "border protection policies" it has a line item called "interception and transfer of asylum seekers", which it has budgeted at $198 million over four years.
We don't know how the Coalition arrived at that figure, only that it was signed off on by the panel.
Nor have these policies been costed by Treasury or the Department of Finance. As a joint statement released by the departments last week said: "At no stage prior to the Caretaker period has either Department costed Opposition policies."
The statement signed by the Coalition's eminent panel declares: "We are of the opinion that the final policy costings provided by the Coalition in the attached tables are based on reasonable assumptions and calculations and, as such, represent a fair estimate of the net financial impact of those policies on the Federal Budget."
But we won't be seeing those calculations. It contrasts with the transparency meant to be instilled by the Charter of Budget Honesty, which spells out the process by which parties can have policies costed by Finance, Treasury or the PBO. The Coalition has not submitted any policies to Finance or Treasury.
Stephen Bartos, executive director of economic consulting firm ACIL Tasman and former deputy secretary in the Department of Finance, told the Australian newspaper: "They're not actually costings - it's a list. Under the Charter of Budget Honesty the main thing that's important is that you spell out your assumptions. The assumptions aren't shown here. And you can assume anything."
Key assumptions include the calculations by which the Coalition claims a $1.088bn saving over four years from an expected decrease in the number of asylum seeker boats arriving as a result of its border protection policies.
Bartos also told the Australian there was a "strong likelihood" that the Coalition had counted some savings twice.
The eminent panel's letter says it has sighted costings assumptions for the polices which the Coalition previously put through the PBO. But that doesn't include the broadband, asylum seeker and climate change policies. So there has been a clear choice to exempt these three policies from that process.
Our ruling
The Coalition today released a document showing its spending and savings measures. It produces a bottom line, but does not an account for the way each policy has been costed, displaying the assumptions and the process in plain sight.
Showing that numbers add up without revealing how they were arrived at has little value.
We know that the PBO looked at most policies and the panel of experts looked at all of them. But three major policies were not submitted to the PBO for costing, and there are big questions over the assumptions behind each of them.
The pamphlet in question was created and circulated well before today’s announcement. To tell voters that "all Coalition policies are fully costed and fully funded" is inaccurate.
We rate the statement False.
