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Costello's desperate attempts to hide his $1.1 billion black hole.

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Costello's Desperate Attempts To Hide His $1.1 Billion Black Hole Media Statement - 22nd November 2007

Having been caught out over his budget calculations, Peter Costello is now desperately trying to cover over a $1.1 billion black hole in his election costings.

His claim that the Charter of Budget Honesty does not require that the Public Debt Interest (PDI) costs in reporting the budget bottom line is false.

What the references in the Charter do relate to is the costing of individual measures.

However, PDI does need to be taken into account when determining the overall effect of all policies on the budget bottom line.

Indeed Table 9 (page 13) of the 2007 Pre-election Economic and Fiscal Outlook (PEFO) shows the impact of interest reciepts on the budget bottom line from banking future budget surpluses.

Mr Costello’s error is to include $1.1 billion of interest earnings in his budget bottom line that will now no longer be received .

This is $1.1 billion in interest that has been included in the PEFO but will not be received because of the Government’s $10 billion election spending spree.

Mr Costello’s failure to account for $1.1 billion of interest earnings that will never be received shows he either doesn't have an understanding of basic public finance accounting or he is deliberatly misleading Australians to prop up his budget bottom line.

Wayne Swan

Authorised by Tim Gartrell, 161 London Circuit, Canberra City, ACT 2600