It was a cracking yarn — school kids visiting Parliament House to be deprived of bottled water and fruit sweets under government-driven efficiency measures across the Public Service. The Daily Telegraph went hard with it on Monday, with Steve Lewis’ story on page one.

The only problem was that it was completely wrong. It might have been correct if Lewis’ yarn had been published last Friday. Last Thursday, Clerk of the House of Representatives Bernard Wright wrote to all MPs outlining a series of savings proposals to achieve savings of $550,000 in 2012-13 to meet the government’s efficiency dividend. The measures included backbenchers missing out on newspapers, cutting back on advertising, some combination of staffing positions — and the cuts to the school hospitality program. That would save $85,000 next year and $235,000 a year thereafter.

But on Friday at lunchtime, Wright emailed members of the Reps Appropriations and Administration Committee to say that, after feedback, the schools hospitality program would not be cut for now, but would be reviewed. Crikey understands Lewis sought a response from the government on Sunday while preparing the yarn, and was told to check with the officials concerned. Whether he did or not, the yarn went ahead, targeting Wayne Swan, whose office wasn’t contacted for comment.

Yesterday the Telegraph ran a page five item admitting that Monday’s story was wrong and claiming it was unaware of the Friday email from Wright. Lewis’ yarn was updated online. Other News Ltd outlets that ran the yarn did not run the correction.

Yesterday, coincidentally, Essential Research released polling showing that the Telegraph for the second year running has the lowest trust of any major metro title.

But where the story took on a life of its own was when Ray Hadley picked the yarn up and ran with it on 2GB and took Joe Hockey along with him. Unlike Lewis, Hadley and his producers didn’t even try to check the story. And by the time Hadley was on air, Swan’s office had issued a media release stating that the story was wrong and criticising Lewis. Hadley tells Hockey “I’m just absolutely flabbergasted that someone in high office like Deputy Prime Minister would be on the attack and saying a whole range of things about News Limited and about you when in fact it’s all there in black and white that they are.”

Hockey — whose office hasn’t issued a transcript from the interview — agrees heartily: “I don’t want you to be surprised that Wayne Swan is telling a fib. Because frankly, he’s done it so often now’s another case.” But then Ray begs to differ with Joe.

“In this particular case what concerns me more than the fact that you think he’s lying. I don’t think he’s lying I just think he’s a complete boofhead that didn’t know what was happening. He’s gone off half-cocked and sent out this media release saying, you know saying this is disgraceful, it’s dishonest, and all the other things he said, without being advised that it’s in black and white lie I think.”

Joe agrees, and explains what happened, to Ray:

“I think they’re equally stupid. The fact is the Committee of the Appropriations for the House which has a Liberal on it, the Whip, Nola Marino. She attended a meeting on Wednesday where they were informed they were going to cut this and then it was confirmed in a letter that went out on Thursday. Now not all members got it, but she certainly did and a number of others, including some on the Labor Party side got the letter and now once it appears in the papers, Wayne Swan as you point out rightly, has just gone out there and called us all liars.”

It’s interesting that Hockey mentions Nola Marino. Because Marino received the email from Wright on Friday saying the school hospitality program wouldn’t be cut.

So Hockey knew enough about the proposal to know that Marino received advice on it on Thursday but not that she had been told it was not proceeding on Friday. Did her office mislead Hockey’s office? Or was it simply too good an opportunity for Hockey to pass up? LNP member Ewen Jones knew as well.

Hadley continues to claim that Swan’s office had got it wrong. Hockey insists they’re deliberately lying and tries to link it to Swan’s economic management:

“It happens regularly, Ray. This isn’t a one-off. It’s just that you’ve correctly picked up on it and, but it’s happened on a number of occasions. This is the guy that’s the Deputy Prime Minister and Treasurer of Australia. He wonders why there’s no consumer confidence or business confidence out there. He’s the one that is in charge of the Government accounts, in charge of the economy how can you believe him at his word? This is a fundamental point.”

Indeed.

Crikey understand Hadley and his producers have rejected calls from the government for a correction. But, curiously, the link to the audio of the discussion has been removed on the 2GB site. Google Cache has a copy of the page, but for some reason 2GB no longer wants us to hear Ray and Joe repeatedly attacking Wayne Swan as a boofhead and liar when both are completely wrong.

Update: the audio can still be found in the “highlights package” for Ray Hadley for Monday here, about 8 minutes in.