NO.136

SWAN GAFFE

This afternoon Mr Swan claimed a costing error in Coalition policies because they do not include Public Debt Interest (PDI) effect. To make such a claim shows a total ignorance of costing guidelines.

As stated in the Charter of Budget Honesty: Costing Election Commitments published by the Secretaries of the Treasury and the Department of Finance and Administration, Part 2: Costing Protocols and Methods:-

"As with existing arrangements individual costings may take account of direct behavioural responses, but will generally not incorporate second round effects. The costing will focus on first round effects and the direct budgetary consequences of policies. Similarly, costings will generally not account for the impact on Public Debt Interest (PDI) payments, unless it is an explicit policy objective to affect the level of interest payments, or the policy involves transactions of financial assets (such as loan schemes). PDI costings will normally assume no change to the debt management strategy."

Game over Mr Swan. Read the guidelines. Better still have some policies costed under them.

MELBOURNE

22 November 2007

Contact: David Gazard

0428 405 107