The Productivity Commission has condemned attacks on its integrity as “unacceptable” after its assessment of Western Australia’s sweetheart goods and services tax deal as a costly mistake sparked a fierce political backlash and name-calling.

Angela Jackson, a productivity commissioner and co-author of the report, said the country’s leading independent economic advisory body welcomed criticism and comments on its work. But Jackson then said comments from Roger Cook, the Western Australian premier, lampooning the commission as “east coast clowns” and describing the report as deceitful had “crossed a line”.

The commission was asked to review the 2018 legislation put in place under the Morrison government. Their interim report found that the 2018 legislation had achieved none of its objectives, made the system less fair and had funnelled an extra $23bn in taxpayer money to the nation’s richest state.

As Jim Chalmers, the treasurer, defended the “good people” at the commission and chided the WA Labor leader for his “inappropriate” language, Jackson said “we are used to public debate”.

Extra, unnecessary features cut from the Suburban Rail Loop are never counted towards the cost of the $34.5 billion mega project, the responsible authority has revealed, calling into question Premier Ben Carroll’s claim that he can cut the price tag.

Carroll on Tuesday said he had identified $1 billion worth of savings from the first leg of the mega project, SRL East, slashing the cost from $34.5 billion to $33.3 billion, and two underground station interchanges and a multi-level car park would no longer go ahead. But the estimated total cost of the project never included the interchanges and not enough had been budgeted for the parking at Glen Waverley, the audit said in a warning of possible cost blowouts, a report by the Victorian Auditor-General’s Office (VAGO) revealed on Wednesday.

A government spokesman insisted the decision to avoid “unnecessary scope” would reduce the total estimated investment to $33.3 billion. The Suburban Rail Loop Authority (SRLA) explained the items had not been counted towards the total cost because the government never agreed to building them, claiming that it is standard practice on major infrastructure projects for optional or additional scope elements to be identified, assessed and considered separately from the approved scope until a final decision is made regarding their inclusion.

VAGO said the interchanges at Cheltenham, Glen Waverley and Box Hill stations would cost a total of $1.7 billion but that just $104 million had been included in the total estimated cost of the project. The Glen Waverley and Box Hill interchanges are not proceeding.

The Victorian premier, Ben Carroll, has made an about-face, committing to pushing ahead with the first stage of the Suburban Rail Loop while promising to reduce its total cost by about 6%.

He will also announce changes to the scope of the first stage of the project on Tuesday , known as SRL East – a 26km stretch of tunnels between Cheltenham and Box Hill – estimated to save $1bn, and an “independent, technical review” to identify a further $1bn in savings.

The Suburban Rail Loop Authority, which is the statutory agency responsible for planning and delivering the project, will be folded into the Victorian Infrastructure Delivery Authority. The move was already under way prior to Carroll becoming premier four weeks ago.

No further contracts will be awarded until the review is complete but the government has stressed all current works will continue, with tunnelling between Burwood and Glen Waverley set to begin soon.