TREASURY head Martin Parkinson has assured the opposition the department did not breach its "professional and apolitical ethos" in costing Coalition policies.
As former treasurer Peter Costello was dragged into the row over the government's "leaking" of the costings, Dr Parkinson wrote in a letter to shadow treasurer Joe Hockey: "any suggestion that we would be complicit in questionable practices is without foundation".
Fairfax newspapers reported on Monday that three Coalition policies would cost business $4.57 billion in their first full year of operation, according to a Treasury analysis.
The opposition reacted angrily, saying Treasury costing did not deal with offsets — its plan to scrap the carbon and mining taxes and to provide a modest company tax cut.
Mr Hockey demanded Dr Parkinson give an explanation of Treasury's role. Under pressure, the government admitted it had asked Treasury for the costings and took responsibility for putting them out.
In his reply to Mr Hockey on Wednesday, Dr Parkinson said it had long been the case that Treasury was periodically asked by the government of the day to cost or analyse alternative policies, including those from stakeholders or other parties.
Outside of the "caretaker" period, "Treasury does not undertake unsolicited costings of the policies of political parties". On this occasion Treasury had provided advice to Treasurer Wayne Swan on several policies "at the request of his office. As is always our practice, the Treasury did not provide the advice or the underlying analysis to anyone outside of government."
Mr Hockey said that "clearly Dr Parkinson has identified the Treasurer as the person responsible for playing these political games".
Mr Costello rejected suggestions that he had used Treasury material in the same way.
In 2002 Mr Costello said in a statement that Treasury had carried out a preliminary costing of Labor's announcement to oppose superannuation tax measures.
In 2004 Ross Gittins reported in The Sydney Morning Herald that in a dispute over a Labor baby care policy, Mr Costello had "produced a minute Treasury had sent him that very day drastically revising down the estimated cost of the baby bonus". Labor at the time accused Mr Costello of politicising the public service.
Mr Costello said on Wednesday: "The baby bonus was my policy. I had not asked for a costing of their policy." He said he did not remember ever releasing a Treasury minute — "I surely never 'leaked' them". But Fairfax did not have the actual Treasury minute on the costings.
The opposition says it will send policies to be costed by the new Parliamentary Budget Office, but it is waiting until legislation passes to exempt these from freedom of information provisions.
■Labor's primary vote has risen one point to 37 per cent in the Essential poll. Labor trails 47-53 per cent on a two party basis.