The debate over the financial fitness of political party policies could come to an end next year, after the Government announced plans to establish an independent analysis service.
Finance Minister Grant Robertson has announced Treasury will establish a new team to provide a policy costing service to the political parties currently represented in Parliament for the 2020 general election.
Political parties will be able to directly approach Treasury for this service, which will be performed independently from the Government.
- Government flush with tax cash, surplus of $5.5 billion
- Economist consensus - there's no $11.7b hole in Labour's budget
- Steven Joyce stands by fiscal hole despite $5.5 billion Government surplus
Political parties are currently able to request Treasury, to analyse their policy costings, but only if they get the Finance Minister's approval.
The Government hopes the new service would leave limited room for debate over the financial outcomes of political party policies.
For example, former Finance Minister Steven Joyce made the claim, ahead of the 2017 election, that Labour had made an $11.7 billion error in its policy analysis.
Labour staunchly denied they had a "fiscal hole" as Joyce claimed, and more than a year on from the election, it was revealed the Government was sitting on a surplus of $5.5 billion - $2.4 billion more than forecast.
The Government announced it would establish an Independent Fiscal Institution in Budget 2018.
It has now submitted a proposal recommending the independent Parliamentary Budget Office (PBO) be given the necessary status - an Office of Parliament - to become the official go-to for political parties to have their policies analysed.
"This will give the PBO the necessary independence to undertake the role for which it is being established," the Finance Minister said on Tuesday.
He also confirmed that National's former finance spokesperson Amy Adams welcomed the proposal earlier this year. The party's new finance spokesperson, Paul Goldsmith, will be consulting it with his caucus.
"It is currently anticipated that legislation will be introduced before the end of the year, with the intention that the PBO be operational from 1 July 2021," Robertson said.
He said setting up the entity delivers on the confidence and supply agreement Labour has with the Greens, the latter who promises an "independent unit within Treasury to cost political party policies".
Green Party co-leader and Associate Finance Minister James Shaw said the independent PBO will mean more transparency about what political parties are promising to do, and fewer political games played.
"The PBO will help cut through the noise to deliver New Zealanders unbiased information during election campaigns."
A "fiscal watchdog" was proposed by the New Zealand Initiative in 2014. It was suggested it be an Office of Parliament, as is Australia's PBO.
Australia's PBO has prepared policy costings at the request of Senators and Members of the House of Representatives since 2012. Canada and the United Kingdom also have similar offices.
The Greens estimate the cost of an independent unit within Treasury would cost $1-2 million per year, increasing to approximately $2-3 million in an election year.
Newshub.
