Dom Post on costing policies

The Dom Post editorial:

The ’ idea of an independent agency to cost parties’ new policies is a good one, and the Government should take it up.

I agree.

Prime Minister John Key has been dismissive so far, but he should remember that it is his side of politics that typically claims superiority when it comes to financial literacy.

“Show me the money!” Key famously called to former Labour leader Phil Goff during a 2011 election debate. It was part of a broader charge that Labour had wildly underestimated the costs of its policies during that campaign.

Perhaps he was right and perhaps he wasn’t. But if there had been an independent authority to give its own take, voters needn’t have taken Key’s word for it.

The parties of the left tend to always dramatically under-estimate the cost of their policies. This is why National should support such an agency. It would mean we would have credible estimates of what their policies would cost, and voters would better understand how much more in taxes would be needed to fund them.

The Greens will have mixed motivations for announcing their sober new policy. It would be straightforwardly useful to the party, for one, by handing it more resources to propose feasible ideas.

It is true parties can pay to have their policies costed at the moment but this is not independent. Normally a party hires an ideologically sympathetic economics firm to cost the policies using the most favourable assumptions. Hence they tend to greatly under-estimate the true costs.

If one was to set up such an agency, one could help fund it by reducing the funding for parliamentary parties in recognition of the fact they would no longer have to pay for their own costings.

More sophisticated policy from the small parties would be nothing to lament; consider that at the last election, NZ First promised to wipe GST off all food, which it laughably said was “fully fundable” by cracking down on $7 billion in tax avoidance.

NZ First had such outlandish policies they were in fact impossible to cost. They’re more slogans than policies.

Where the Greens have it wrong is to suggest the agency be a unit of the Treasury. That is no recipe for a truly independent institution; its budget, staffing and priorities might easily be massaged into oblivion by a minister eager to avoid embarrassment, or a bureaucrat happy to help with the same.

It should either be an independent advisory body to Parliament, or else made part of an investigative agency such as Audit New Zealand.

I think it should be part of Parliament. It could come under The Parliamentary Service, as the Parliamentary Library does.

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