The election campaign has again been diverted by debates on the costings of policies
As in previous elections, the 2023 election campaign has been distracted by technical costing issues around policies rather than focusing on the merits of the policies themselves.
Based on reviews by credible independent consultants, both National’s tax cuts package and Labour’s spending proposals have been criticised for the costing not being credible.
New Zealand is falling behind Australia which has a Parliamentary Budget Office
In the lead up to the election the Treasury provides the Pre-election Economic and Fiscal Update (PrEFU), a robust independent macro-economic forecast, along with an update on the fiscal outlook. However this does not cover campaign promises.
New Zealand lacks an authoritative independent source of advice on costing policies. Kiwi voters deserve to receive robust, credible, consistent information on the expected cost of the policy platforms of the different Parliamentary parties. This process works well in Australia
Budget oversight – we know how to design an independent fiscal institution
New Zealand has been slow to adopt an independent fiscal institution. The Treasury has a well-developed proposal for a Parliamentary Budget Office (PBO), and the functions of such an institution were agreed by Cabinet in 2019. Requiring cross-party support to proceed as an Office of Parliament the proposal was stymied, lacking the support of the opposition spokesperson on Finance at that time. However, the political situation has changed and cross-party support is now available.
The 2023 Election campaign highlights the case for a PBO.
New Zealand budgeting is falling off the pace
New Zealand lost its top ranking for Budget Transparency in the most recent international Open Budget Survey (OBS) released in 2021. The OBS survey raises bigger questions about what New Zealand needs to do next to raise the bar on fiscal transparency.
Creating a PBO would significantly strengthen New Zealand’s fiscal constitution. This would provide for independent evaluation and commentary on New Zealand’s fiscal policy performance, improve parliamentary scrutiny of public finances and fiscal policy, and provide for independent costing of political party policies to better inform public debate.
Increasing the transparency and integrity of Budget information
Across the world, public trust and confidence in institutions is under threat.
During an election, political parties engaging in undignified squabbling over costing policies brings the whole election process into disrepute. It discourages voters from focussing on the merits of the policies themselves. Kiwis deserve better.
Derek Gill is the Open Budget reviewer for New Zealand and Transparency International NZ’s Member with Delegated Authority on public finances. He comments on why civil society organisations including TINZ have been pushing for a Parliamentary Budget Office to improve transparency of New Zealand’s budgeting.