Treasury boss rejects politicisation claims, denies costing Coalition lunch policy

Treasury boss Steven Kennedy has rejected the Coalition’s accusation that his department has been politicised under Jim Chalmers, as Liberal senator Jane Hume interrogated the department secretary about his work under former Labor prime minister Kevin Rudd.

“It’s no secret, but can I confirm for the record that you worked as an adviser to Kevin Rudd during the global financial crisis?” Hume asked Kennedy, also putting to him that Treasury’s fiscal group deputy secretary Damien White had worked as an adviser to Labor heavy-hitters Wayne Swan and Chris Bowen.

“Knowing that you deny that Treasury has acted in a political manner, there are numerous deputy secretaries and secretaries ... on the personal staffs of Labor politicians ... is it your assertion that Treasury has not been politicised?”

Kennedy – who was appointed secretary of the then-Department of Infrastructure and Regional Development in 2017 under then-Liberal prime minister Malcolm Turnbull and Treasury secretary under Scott Morrison – noted he had an acting deputy secretary who worked for Turnbull as well as a recently departed deputy secretary who served Tony Abbott.

“I think it would be a real shame if public servants felt that it would be a negative for their career if they did not take up those opportunities,” he told Hume.

“I do completely reject that the department or the officials are politicised as you pointed out through these remarks ... I am very confident that we do not act politically so I do reject that assertion.”

Treasury secretary Steven Kennedy and Finance Minister Katy Gallagher at the Senate hearing on Wednesday.Credit: Alex Ellinghausen

In a heated exchange, Finance Minister Katy Gallagher labelled Hume’s interrogation “disgusting and outrageous”, noting Treasury officials had been seconded to governments of all different persuasions over the past 30 years.

Hume’s question about politicisation came after Kennedy rejected her suggestion that his department had costed the Coalition’s small business lunch tax deduction policy at Labor’s request.

Treasurer Jim Chalmers has claimed the Coalition’s tax deduction policy – which would allow small businesses to deduct up to $20,000 a year to buy meals and entertainment for employees or clients – would cost up to $10 billion according to Treasury estimates.

But Kennedy on Wednesday said he had not costed the opposition’s policy, but rather a separate policy for which the government had provided some parameters.

“We weren’t costing opposition policy because, as practice, we don’t cost opposition policy,” he said. “We’d have to engage with the opposition and ask them what the parameters of the policy were.”

Asked about the treasurer’s subsequent comments claiming Treasury had costed the Coalition’s proposed policy, Kennedy said he had not spoken to Chalmers on the matter.

“I don’t have [those comments] in front of me and I haven’t reviewed them,” he said.

Both sides of politics have used Treasury to examine the policies of their opponents.

Most recently, before the 2019 election, then-treasurer Josh Frydenberg released Treasury costings of Labor’s policies that estimated they would cost taxpayers $387 billion.

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