Jericho on costings

Policy costings about more than the final figures - The Drum (Australian Broadcasting Corporation)

A good explanation from Greg Jericho here of the games being played with "costings".

We need to know the final number, and it's great to know that it is accurate, but we still need to know how they arrived at that number.

The problem is many editors and news directors have focussed on the number and not the assumptions and parameters that determined the result. The ALP also fell for this old way of thinking when last week they announced that the Liberal Party had a $10 billion black hole.

In reality what the ALP had demonstrated was not that there was a black hole, but that if you used the assumptions and parameters previously announced by the Liberal Party the savings amounted to only $21 billion as opposed to the Liberals' announced $31 billion.

Both numbers are right. But we have no idea why they are different, because we have no idea how the Liberal Party arrived at its final number.

To use the running analogy, at best we know the vague distance they ran, but little else.

The ALP over-egged their case, but when the Treasury and the PBO released statements pointing out that the costings released by the ALP were not the actual costings of the Liberal Party policies, the media for the most part took that as meaning the ALP's $21 billion figure was wrong.

The Treasury and PBO had said no such thing. They had merely announced that the costings depend on assumptions and parameters. Do we know the assumptions or parameters of the Liberal Party's policies?

Nope.

His explanation of the difference the Parliamentary Budget Office has made is important too, but I won't reproduce that here.