ABC radio’s chief political correspondent Chris Uhlmann was only half joking yesterday when he claimed the remarkable 200 point afternoon stockmarket rally coincided with reassuring statements from Treasurer Peter Costello during Question Time.

Sure, the market bottomed at 1.51pm and Costello started speaking at 2.05pm, but this was actually a regional phenomenon as most Asian market rallied in afternoon trade and the ASX’s computer glitch also contributed to the lunch time plunge.

Costello was also making reassuring noises on The World Today two hours earlier, but in the process told this brazen porky about Federal debt:

PETER COSTELLO: You’ve got to bear in mind there’s a lot of borrowing going on in the private sector, and huge borrowing going on by state governments…Now it won’t affect the Commonwealth, because the Commonwealth doesn’t borrow. The Commonwealth’s actually saving money, and I think we could all agree now that it’s very important that it’s been doing that. Imagine if the Commonwealth were in the market borrowing at this time too.

So what exactly does Costello call the federal government’s $5.1 billion 2007-08 borrowing program?

The Feds actually issued $400 million of new five year bonds on Tuesday and there will be another $400 million tender on August 28 which will be more expensive than before the global credit crunch. Then we’ve got another $800 million issue on 11 September, followed by $600 million on 25 September.

Whilst the Reserve Bank is in reasonable shape, it would be far stronger if Costello hadn’t drained $25 billion in dividends out of it to boost his over-stated surpluses for the past 11 years. The same applies to the $30 billion blowout in unfunded federal superannuation on his watch.

The Australian dollar at one stage plunged US4c to almost reach US78c in overnight trading – but the Reserve Bank wasn’t in there supporting it, partly because it doesn’t have anything like the foreign reserves enjoyed by most of our Asian competitors.

The other interesting government arm in this equation is the Future Fund, which finally started deploying some of its $40 billion in cash back in June. In a similar scenario to the situation faced by all those Australians who ploughed into super before 30 June, let’s hope the Future Fund still had most of its money in cash after the All Ords plunged by more than 15% from its recent high through until lunch time yesterday.

Given the plunging dollar, let’s also hope any foreign investments made by the Future Fund were unhedged. Maybe it’s time the Future Fund came out and disclosed its position to the current and past public servants whose money they are managing.