On Thursday Mr Rudd claimed to have found a counting error amounting to a ''$10 billion fraud'' in Coalition policy costings, arguing savings identified had been deliberately overstated. He released internal costing documents to support the point. Finance Department secretary David Tune. Credit:Paul Harris ''Treasury, Department of Finance and Deregulation and Parliamentary Budget Office figures released this morning have exposed a $10 billion hole in the savings claimed by the Coalition yesterday,'' a government media release said. ''Rather than the $31.6 billion save that shadow treasurer Joe Hockey spoke about yesterday, these independent figures below show that total saves are $20.8 billion.'' Labor said this included a claim of ''an additional $2 billion in savings from not proceeding with the low income superannuation contribution; a saving of $5.2 billion from axing 12,000 public servants, but which the Department of Finance had costed at ''around $2.8 billion''; and modelling by the Parliamentary Budget Office which found that more than 20,000 public service jobs would have to be cut to achieve the saving. Labor said the claimed $5.1 billion saving from discontinuing free permits in the ''Jobs and Competitiveness Fund'' did not affect the budget and could thus not be counted, and that only a portion of the $1.5 billion saving from ditching the Clean Energy Finance Corporation could be counted on the bottom line.

A joint statement posted on the Treasury website on Thursday, the departmental heads said: ''At no stage prior to the caretaker period has either department costed opposition policies''. Treasury Secretary Martin Parkinson. Credit:Penny Bradfield ''Different costing assumptions, such as the start date of a policy, take up assumptions, indexation and the coverage that applies, will inevitably generate different financial outcomes.'' Their direct intervention, described by shadow treasurer Joe Hockey as ''unprecedented'', came after Mr Rudd, flanked by Treasurer Chris Bowen and Finance Minister Penny Wong, said that $31 billion of savings announced by the Coalition was wildly exaggerated. Mr Hockey said the intervention of the bureaucrats had given the lie to government claims and should put an end to its claims of unreliable Coalition costings. ''They have been so concerned that they have clearly sought to distance themselves from the government,'' he said. ''This is a massive blow to the government's credibility.'' Late on Thursday the head of the Parliamentary Budget Office, Phil Bowen, advised: ''Unless all of the policy specifications were identical, the financial implications of the policy could vary markedly".

Mr Hockey said he had now passed all his PBO-costed policies to Treasury. Loading Business called on both sides to tone down anti-foreign investment rhetoric to protect Australia's reputation as a stable profitable economy eager for offshore capital. Business Council of Australia said: ''If we're serious about being part of the Asian century, we have to get serious about foreign investment.''