"The Coalition has set the scene for a new row over costings at the next election threatening to walk away from the planned $25 million official costings unit and use a private accounting firm instead.
Shadow Treasurer Joe Hockey made the threat as The Age learned the accountants who costed his policies last time remain under an ethics investigation.
Geoff Kidd and Cyrus Patell of WHK Horwath in Perth agreed in an unpublicised deal with the Coalition in 2010 to cost its policies making no inquires about “the reasonableness of otherwise of the assumptions used”. The Coalition presented their work as an audit.
The Treasury subsequently found errors of differences of opinion about approach used amounting to $11 billion."
"Shadow Treasurer Joe Hockey was not telling the truth when he claimed days ahead of the election the Coalition's costings had been "audited" by a big Australian accountancy firm."
"His claim that "we have the fifth-biggest accounting firm in Australia auditing our books and certifying in law that our numbers are accurate" helped shield the Coalition from criticism about its decision not to submit costings to Treasury.
Documents seen by The Herald show the federal directors of both the Liberal Party and National Party would have known the claim to be untrue."
"Brian Loughnane and Brad Henderson signed a letter on the day the costings were released addressed to the Perth accountancy firm WHK Horwath confirming that its work for the Coalition was primarily "not of an audit nature".
Loughnane also countersigned a letter from two of the firm's principals which reminded the Coalition their work would "not constitute an audit in accordance with Australian auditing standards or a review in accordance with Australian auditing standards".
Within hours of the release of the work Hockey inflated it to a legally watertight endorsement telling ABC TV "they have certified our numbers based on all the information we have provided them, they have legal obligations and legal risks"..."
"In fact the letter from Horwath principals Geoff Kidd and Cyrus Patell dated 13 July and countersigned by Loughnane makes clear that the work was little more than a spreadsheet exercise designed to "review the arithmetic accuracy of the Liberal Party of Australia's costing estimates"."
"Asked to explain the discrepancy between the letters he had signed and the claims made by his Treasury spokesman, Mr Loughnane said yesterday "you'll have to ask Joe why he said what he said"."
"A Treasury analysis conducted at the request of the independents found the costings out by $11 billion as a result of errors including double counting and failing to account for the loss of dividends following a privatisation.
Horwath is the second organisation to have distanced itself from the Coalition over costings. The National Centre for Economic Modelling said it had never worked for the Coalition although might have indirectly through the Parliamentary Library despite claims by Mr Robb that Coalition policies had been "carefully modelled by NATSEM"."
