Secretary Steven Kennedy denies Treasury has been politicised

Treasury secretary Steven Kennedy has dismissed claims the public service has been politicised in producing costings of a Coalition policy.

Treasury secretary Steven Kennedy during Senate budget estimates. Picture: NewsWire / Martin Ollman

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Treasury secretary Steven Kennedy has dismissed claims the public service has been politicised in producing costings of a Coalition tax deduction policy, and denied that the top echelons of Treasury have been filled with former Labor advisers.

In a hostile appearance before Senate estimates on Wednesday, Dr Kennedy remained adamant his department was not at fault in conducting the modelling as it had been instructed to cost a policy with similar parameters provided by Jim Chalmers’ office, rather than costing the ­opposition’s precise proposal.

“We weren’t costing opposition policy because, as a practice, we don’t cost opposition policy,” Dr Kennedy told the Senate’s economics committee. “We’d have to engage with the opposition and ask them what the parameters of the policy was.

“If the government was to ask us: ‘Could you just cost this opposition policy?’ We would not do so. If the government asks us to cost the policy with parameters, then it’s a lawful request, and we would cost that policy.”

The uproar over Treasury’s costings comes after The Australian revealed internal Treasury correspondence showed officials explicitly referred to the ­Coalition’s policy when modelling Labor’s request, estimating the opposition’s plan could cost as much as $10bn.

While the Coalition is yet to unveil the final cost of its two-year policy – which would enable small businesses with turnover up to $10m to deduct the cost of meal and entertainment expenses up to $20,000 from fringe benefits tax – it has claimed the measure would cost less than $250m in forgone revenue.

But after Dr Chalmers used the costings to ridicule the ­Coalition’s plan, opposition ­finance spokeswoman Jane Hume asked Dr Kennedy whether he had been misrepresented by the Treasurer.

“That’s a matter for the Treasurer and the minister. I’ve told you what we did,” Dr Kennedy replied.

“My ministers and elected officials behave in the way they feel is appropriate, but … we did not cost your policy, we don’t cost opposition policies.”

Senator Hume also took aim at the impartiality of senior Treasury officials, pointing to Dr Kennedy’s previous experience as a member of Julia Gillard’s staff, a claim with the Treasury boss rebuffed.

“Of the officials in Treasury and the way they’re behaving, I do completely reject that the ­department or the officials are politicised, as you pointed out through these remarks,” Dr Kennedy said.

“We’ve all gained enormous experience and, frankly, empathy and insight into the demands on elected officials by taking an opportunity in our careers to work with elected officials.”