AFP probes leak as opposition accused of hiding $8bn

THE Australian Federal Police will investigate who leaked a Treasury costing of a Coalition policy proposal, as Labor accused the opposition of hiding an $8 billion long-term cost of its promise to lift defence pensions.

As the campaign rhetoric escalated, shadow finance minister Andrew Robb also questioned the integrity of Treasury officers, warning that the Coalition would not submit any further policies to be costed until the matter was resolved.

Mr Robb said he was concerned that the officials carrying out the costings "may have a political agenda" and could be "engaged in criminal activities to create a political problem for us".

"It is important to have Treasury test [the cost of Coalition policies], but only if it can be shown that they are totally independent and that they are impartial," Mr Robb said. "Their impartiality is critical to them properly assessing the costing of both sides . . . We are very concerned that [the costing] is not compromised by the potential of individuals who may have a political agenda, who are responsible for carrying out the assessment of costings on all these programs."

The Coalition has so far submitted only 11 minor spending proposals totalling $388 million less than 2 per cent of its $24 billion of new spending plans to be costed by the Department of Finance.

Mr Robb spoke with Australian Federal Police Commissioner Tony Negus yesterday to urge the AFP to investigate who told The Sydney Morning Herald that Treasury had found an $800 million hole in one of the Coalition's policy costings.

The opposition in May claimed it would save $2.44 billion in interest bills over four years by not building the National Broadband Network. According to the Herald report, since confirmed by Treasurer Wayne Swan, Treasury estimated the saving was only $1.6 billion.

"The Commissioner . . . advised that the investigation would be conducted as a matter of priority," Mr Robb said.

Shadow treasurer Joe Hockey said that unless the leaker was identified, the Coalition would instead release costings made by its accounting firm next Wednesday.

A row also escalated over the long-term cost of the Coalition's pledge to allow some defence pensions to be indexed to wage growth rather than the consumer price index (CPI), whenever wages are growing faster than prices.

While the promise will cost just $98 million in the next four years, the government said it would cost $8 billion over the next 45 years, with defence pensions ultimately rising by 20 to 25 per cent as higher indexation operated like compound interest.

"The Liberals would immediately increase the unfunded liability of the military superannuation scheme by $8 billion," Finance Minister Lindsay Tanner and Veterans' Affairs Minister Alan Griffin alleged.

But a Coalition spokesman said the long-term cost would be only $4.8 billion, and the Coalition would put an extra $100 million into the Future Fund, which would be followed by further payments to meet that cost.

"Over time it will cost more, and it's not insignificant, I accept that," Opposition Leader Tony Abbott responded in a radio interview.

"In any one year, it is bearable and we ought to bear it because if we expect people to put their lives on the line for our country, we've got to be prepared to show some reasonable commitment to them," he said.

The plan will benefit only 4270 of today's armed forces because it applies only to a scheme closed to new entrants in 1991.