Speaking as Labour’s Finance spokesperson, rather than Minister of Finance, Grant Robertson was quick to crow about the discovery of “a basic error” which left a $4 billion gap in National’s economic plan.
“If National can’t even do the basics required on their own policy costings, they cannot be trusted to run the country. Making mistakes like this have real world consequences that New Zealand does not need in this challenging time in our history.”
Robertson was harking back to an announcement a few days earlier, when (he gloated)
“ … National threw out a desperate economic policy that included $4.7 billion of tax cuts that would give Judith Collins $4,000 at a time when New Zealand needs to be investing in services like health and education for our future.”
This is a tad puzzling, prompting a question we sent to the people who despatched the press statement: giving Judith Collins $4000 of what? We await a response.
Robertson focused on the contention in National’s plan that cancelling Super Fund contributions for the next decade would give it $19.1 billion. But the PREFU contains projections showing just under $15 billion of contributions over that time.
The mistake meant the Nats had $4 billion less ‘savings’ to pay for their plan.
While the hounds of the media pounced on this blunder, here at Point of Order we shared the Taxpayers’ Union’s curiosity about the proposal to set up an independent election policy costing office.
Setting up the PBO was a commitment in the the Confidence and Supply Agreement between Labour and the Green Party.
Its role would be to monitor the Government’s fiscal strategy as well as provide independent costings of political party policies.
When last we checked, it hadn’t been abandoned. In August last year the Beehive proclaimed:
Independent election policy costing unit a step closer
The creation of an entity to provide political parties with independent and non-partisan policy costings is a step closer today, according to Finance Minister Grant Robertson and Associate Finance Minister James Shaw.
Cabinet has recommended that the independent Parliamentary Budget Office (PBO) – Kaitiaki Kaupapa Rawa – is given the status of an Officer of Parliament.
Associate Finance Minister James Shaw, championing the idea, said the independent PBO will result in greater transparency about what political parties are promising to do, and should result in fewer political games being played.
“It should enhance New Zealand’s democratic framework by levelling the playing field, giving political parties access to the same resources to give the public consistent and independent information.”
But whoa. The office at that time was set to be operational from mid-2021.
Why not in time for the 2020 election?
“It would have been ideal to have the office set up before the 2020 election, but we’re making sure we’re taking the time to get this right,” Grant Robertson said.
“To do this, we’re drawing on international experience and carefully listening to the feedback from the earlier consultation process. 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.
In the meantime, he said, resource has been set aside for an interim costing unit for the 2020 election, to be hosted by the Treasury, as was already possible.
For the 2020 general election, the Treasury will establish a new team to provide a policy costing service to the political parties currently represented in Parliament. Political parties will be able to directly approach the Treasury for this service. The service will be performed independently from the Government
A progress report would be welcome, so Point of Order asked of Robertson:
Was this Treasury team established, for how long has it been operating, and which parties have used its services?
That was on Monday,. We await (a) an acknowledgement that our email was received and (b) a response.
The Taxpayers Union – fair to say – should be credited with arousing our curiosity. In a statement on Sunday, it reminded voters about the proposal to set up an independent election policy costing office.
Union Spokesman, Jordan Williams, said that if Labour had done what it had promised and introduced such an office, the confusion over National’s numbers would never have happened.
This perhaps over-states what such an office could achieve. But having such an office is better than having none.
Williams went on:
“The Greens, and subsequently Labour, picked up our policy to create a Parliamentary office to peer review political party election promises and fiscal plans to give voters an independent opinion on the numbers. But the Government has totally failed to deliver.”
“Without an independent costing office, how on earth are voters to assess ‘fiscal holes’ and complex public accounting forecasts?”
In the absence of a response from Robertson or his well-paid PR team, Point of Order checked out The Treasury website and found a section headed Costing of Political Party Policies
This provides basic guidance on how to cost political party policy proposals and draws attention to the fundamental aspects of (i) cost-benefit evaluation and (ii) fiscal costs estimation.
But it seems parties must follow “agreed protocols”. Among them:
Requests to cost political party policies can only be approved by the Minister of Finance or a Minister responsible for a portfolio.
The Treasury advises that the extent of its involvement in requests to cost political party policies will be determined on a case-by-case basis. This will take into account such factors as the source of the costing request, the relative availability of necessary expertise in the Treasury and in the agency receiving the request, and whether the Treasury holds relevant information that the agency receiving the request does not.
Treasury itself – without baldly saying so – thus makes a good case for the establishment of an independent office.