Treasurer Scott Morrison released Treasury costings of the proposed policy this week, which found a $10 billion “black hole” in the policy’s expected revenue. The Treasury analysis also found Labor’s policy costing didn’t factor in investors’ behavioural shifts.
In releasing the Treasury’s costings of Labor's proposed dividend imputation reforms, Mr Morrison noted that Labor did not release the costings performed by the Parliamentary Budget Office, saying, “Labor’s costing request would have included what assumptions the PBO was asked to make and what caveats the PBO provided on its revenue estimates.
“Labor should similarly release the PBO’s work.”
However, Parliamentary Budget Officer Jenny Wilkinson said on Monday the PBO stands behind the costings, and added that the PBO was established to create a “more level playing field” by providing independent advice to all parliamentarians.
She said the PBO was also established to improve the public’s understanding and trust in policy costings, allowing debates to focus on the actual merits of policy proposals.
This is the second time in 10 months the PBO has defended itself against comments from Mr Morrison.
“The PBO brings our best professional judgement to the independent policy costing advice we provide. We have access to the same data and economic parameters as the Treasury and draw upon similar information in forming our judgements,” Ms Wilkinson said.
“We stand behind the PBO estimates that have been published by the ALP in relation to this policy, noting that all policy costings, no matter who they are prepared by, are subject to uncertainty.”
She added that the PBO takes behavioural changes, and current and future policy commitments into account when making costings. This includes company tax cuts and changes to superannuation law.
Further, Ms Wilkinson said the PBO in this instance “explicitly assumed” significant behavioural changes would occur among SMSF trustees as a result of the policy.
Shadow treasurer Chris Bowen argued that Mr Morrison’s claims were a deliberate attempt to “undermine the quality of costings” performed by the PBO, and amounted to a “next level politicisation of the Australian Treasury”.
“Labor is deeply 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.”
The Labor Party in March announced a proposal to remove the cash refunds payable on excess dividend imputation credits. The proposal would see individuals and super funds no longer able to claim cash refunds on excess imputation credits that had not been applied to offset tax liabilities.