07:27

Chris Bowen has released correspondence between himself and the Treasury secretary, John Fraser.

Bowen wrote to Fraser this morning after reading in the Australian that Treasury analysis had found that Labor’s dividend imputation policy will raise $10bn less over a decade than Labor believes ($45.8bn rather than $55.7bn).

Bowen wanted to know if Treasury had modelled Labor’s dividend imputation policy.

As you can see from the correspondence below, Fraser’s response was a little ambiguous.

Two points to note.

Bowen asked Fraser if Treasury was asked to provide costing advice on Labor’s dividend imputation policy

Fraser replied: “We were asked by the government to cost a policy relating to the denial of refundability of franking credits to certain entities.”

See how Fraser said “a policy” rather than “Labor’s policy”?

Bowen also asked Fraser what assumptions Treasury had made in its analysis, and Fraser replied: “In deriving the costing, a number of assumptions were made around the expected growth in franking credits and expected behavioural responses by individuals, SMSF holders and Apra funds.”

That is a politician’s answer, not the answer of someone who is being forthcoming.

Have a read of the correspondence yourself.

Bowen’s letter to Fraser:

Dear Mr Fraser, I am deeply concerned about reports today of “Treasury modelling” being used to analyse Labor’s policy to reform dividend imputation, including the initiation of a so-called “external review”. Using Treasury resources to analyse and commission an external review of an Opposition policy for the Government would be extraordinary and would cause significant damage to the reputation of Treasury. If it is not the case that Treasury or a paid external party was used to model this Labor policy, I implore you to publicly correct the mischaracterisations immediately. As I’m sure you are aware, Labor’s policy to reform dividend imputation was costed by the independent Parliamentary Budget Office. And as you would expect, this modelling took account of a broad range of potential behavioural responses. I am concerned that the release of “Treasury modelling” not only undermines the perception of Treasury as an apolitical economic agency, but the exercise itself seeks to deliberately undermine the quality of costings provided by the independent Parliamentary Budget Office, a costing agency of equal standing under the Charter of Budget Honesty. It is critical that Treasury is seen as impartial and credible and not politicised by the government of the day. By 12pm today, the opposition seeks from you answers in writing to the following questions:

was formal Treasury costing advice provided to the Treasurer’s office on Labor’s dividend imputation policy;



was the so-called external review commissioned at the direction of the Treasurer, the Treasurer’s office or the Treasury;



who paid for the external review;



what was the cost;



when and to whom in the Treasurer’s office was this modelling and external review report provided;



who were the participants of the external review, how were they selected, and what role if any did the Treasurer’s office have with this selection;



what policy assumptions were made by Treasury in putting together the modelling;



who and when were these assumptions provided to the Treasury;



was the document ‘costing note – denying franking credit refundability’ that has been provided to journalists drafted by Treasury;



what interaction did the Treasury have with the Parliamentary Budget Office in putting together the ‘modelling’ or the external review;



a reassurance from you that a similar situation, where Labor policies are costed by the Treasury, will not occur again; and



did the Deputy Secretary of Revenue Group know about this so-called modelling and supposed ‘external review’ of Labor’s policy, given repeatedly refused to answer questions in relation to this matter at Budget Estimates, instead taking them “on notice”;



was the Secretary of the Department of the Prime Minister and Cabinet aware such ‘Treasury modelling’ and an ‘external review’ were being prepared by Treasury.

Your sincerely, Chris Bowen

John Fraser’s response to Bowen: