Pitched as a way to hold the Government and political parties to account, a fiscal watchdog on party promises will not be progressed any further – despite the ousting of the National leader who fiercely opposed it

Plans for an independent policy costing unit have been put on ice for the foreseeable future due to a lack of political consensus, Finance Minister Grant Robertson has confirmed.

Official acknowledgement that the Government is no longer progressing work on an independent fiscal institution comes despite multiple changes of leadership in the National Party since it first opposed the idea in 2019.

The proposal for a Parliamentary Budget Office, part of the Labour-Greens confidence and supply agreement after the 2017 election, was designed to monitor the Government’s fiscal strategy and provide independent costings of political party policies, following claims and counter-claims over “fiscal holes” during election campaigns.

The news won support from a wide range of organisations including the Taxpayers’ Union and the NZ Initiative, but National came out in strong opposition. Then-leader Simon Bridges accused the Government of trying to “illegitimately, undemocratically screw the scrum on the Opposition”.

A Treasury summary of submissions on the proposal concluded that establishing an independent fiscal institution would help to improve New Zealand’s fiscal policy framework, although there were mixed views over whether or not such a body should be involved in costing the policies of political parties.

National’s opposition led to the plans going on hold, given a requirement for unanimity to appoint a new Officer of Parliament (the desired model).

report from Parliament’s finance and expenditure committee published last week had seemed to suggest an independent fiscal institution remained a live possibility, saying: “The development of Independent Fiscal Institution legislation could be one component of a more comprehensive fiscal responsibility legislative framework.”

National’s former leader Simon Bridges, now the party’s finance spokesman, was steadfastly opposed to the idea of an independent policy costing unit. Photo: Sam Sachdeva.

“We agree that the independent oversight of an Independent Fiscal Institution, if it is established in a form that is consistent with the OECD’s principles, would help the public to ascertain whether a Government is sticking to its fiscal strategy.

“We believe that an Independent Fiscal Institution would help improve the democratic process by increasing public debate on fiscal issues, including fiscal responsibility and sustainability.”

However, any hope was short-lived. In a written statement Robertson told Newsroom the committee’s report related to a briefing given in the last Parliament, and was not an indication of any progress.

“Work on establishing an independent fiscal institution has not progressed further this term by mutual agreement of myself and the Treasury due to competing priorities, including the Covid-19 response.”

The Government had sought broad political support last term to ensure any office had “institutional credibility” when established, but no consensus could be reached on its formation, while National had indicated it would not use any such unit if it had been set up before the 2020 election. 

Robertson said he remained interested in the idea of establishing an independent unit “as resources and other priorities allow”, but no timetable had been set down for that work.

Bridges, now National’s finance spokesman under new leader Christopher Luxon, did not respond to a request for comment.

Sam Sachdeva is Newsroom's national affairs editor, covering foreign affairs and trade, housing, and other issues of national significance.

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