Treasury to cost election promises?

The highlight of Metiria Turei’s State of the Nation speech yesterday was a proposal to have a unit set up in Treasury to cost party election promises.

This was applauded by a range of people, but National don’t seem keen. This is a shame, because while Treasury gives the incumbent an advantage in costing policies National will be in Opposition again some time.

And even in Government national would benefit by keeping the other parties honest with their promises.

From Turei’s speech:

And the policy I want to talk about today is a small change to our political process that will have a big impact on our democracy.

During election campaigns there’s always a lot of conflict and shouting between politicians about whose policy costs what, and where the money will come from. Which party is going to get us into surplus ten minutes faster than the others, and so on.

We get criticised a lot for the supposed cost of our policies. But we do extensive work costing all of our policies before each election. We release fiscal statements. We get them audited.

National doesn’t do that. They don’t because there’s a perception that they’re sensible and trustworthy on economic issues. So the reality is they get to make it up as they go along. Money appears out of thin air and no one even blinks. The asset sales are a good example. John Key pitched it as freeing up $7-10 billion. They got $4.7 billion. Then Bill English promised to spend that money many times over, in completely different ways depending on who he was talking to. We got scammed. And no-even even blinked.

So what I’m here to announce today is a measure designed to bring a little more transparency and accountability into New Zealand politics. Today, the Green Party has sent a letter to each party leader, asking for support from across the House to establish an independent unit in the Treasury to cost policy promises.

Political parties could submit their policies for costing to this independent unit, which would then produce a report with information on both the fiscal and wider economic implications of the policy.

Instead of New Zealanders making their decisions based on spin and who can shout the loudest, they will have meaningful, independently verified information instead.

It will also ensure that policy promises are stable and durable because parties won’t be able to promise the earth unless they have the earth to give.

So we are going to work with the other political parties in Parliament to try and make this a reality for the 2017 election. And it’s going to be very interesting to see which parties support it and who opposes it. Hopefully everyone will support it. It won’t cost much. It’s good for our democracy. It’s good for New Zealand.

Political power can transform the country for the better, and make a positive difference to the lives of generations to come, if that power is exercised with responsibility and caution. So the first things we should ask of those who seek to wield that power is what they’re going to do, how they’re going to do it, and what it’s going to cost.

So we call on the other political parties to welcome this idea and to work with us to make next year’s election more accountable and democratic. To close this gap we have between perception and reality, the gap between what political leaders say and what we actually do.

The Taxpayers’ Union was quick to back Turei’s proposal:

The Taxpayers’ Union is welcoming the proposal from Green Party co-leader, Metiria Turei, in her state of the nation speech today for a policy costing unit inside Treasury that would independently cost the policies of political parties.

Taxpayers’ Union Executive Director, Jordan Williams, says “We agree with the Greens that an independent office to cost political promises would be good for democracy and public policy debates. While our preference is to have the office as one of Parliament, rather than Treasury, the Green’s policy has real merit.”

“Seldom does the Taxpayers’ Union call for new spending of taxpayers’ money but here we think the benefits to transparency and democracy far outweigh the cost.”

“This tool would make it harder for politicians to make up expensive policy on the hoof with taxpayers bearing the costs of the wish-lists. It would likely prevent the fiasco we saw with the Northland by-election bribes.”

Having Treasury cost policies would save the Taxpayers’ Union from having to do it, but I agree that “the benefits to transparency and democracy far outweigh the cost”.

More positive coverage:

Isaac Davison: Metiria Turei chooses perfect issue to kick off the year

Metiria Turei chose a perfect issue to kick off the political year.

In her scene-setting State of the Nation speech today, the Green Party co-leader focused on the need for political parties to be economically credible.

Also from Davidson: Party policies costing plan could fly

Speaking at her State of the Nation speech yesterday, she said she had written to all party leaders to seek their support for the policy.

National appeared to oppose the proposal yesterday, though ministers gave different views on the issue.

Prime Minister John Key said it was “not a terribly good idea”. He said it would require a funding boost for the Treasury and would not achieve the Green Party’s goal of greater transparency because the results would be manipulated for political gain.

“They would just ignore it if they didn’t like the numbers,” he said.

That contrasted with comments by Acting Finance Minister Steven Joyce, who said National “did not have a strong view either way” on the policy.

Mr Joyce said that if all Opposition parties were interested in it, then National would consider it.

“I’d say we’d be open to it, but let’s see what other Opposition parties think,” he said.

I hope Key thinks this one through. It will benefit voters, and it will also benefit parties proposing sensible and affordable policies.

Labour leader Andrew Little…

…said he supported the idea because it would improve transparency and help parties to understand the impact of the Government’s policies.

Act Party leader David Seymour…

…said it was a politically smart move by the Greens because it would allow the party to “sanitise itself in the eyes of the business world”. But it would have problems in practice because the Government department might not be able to provide the definitive numbers the Greens were seeking.

Incoming Business New Zealand head Kirk Hope…

…said the policy would make it easier and better for businesses to understand the costs of party policies. He said the system was already used in other countries.

“It’s not something that is new or unusual and it could make a very useful contribution to be able to analyse policies.”

There is already a means of costing policies:

Parties are already able to request the assistance of a full-time Treasury official for policy costings, but must pay for it out of their parliamentary budget.

Most parties opt not to use this resource, preferring instead to outsource their costings to private firms.

This gives the Minister of Finance a chance to see what other parties are proposing in advance so it is avoided by opposition parties.

It needs to be independent of any Government oversight.

Stacey Kirk at Stuff also thinks it’s a good idea (it will be very useful for journalists to have policies costed) – Greens throw out reasonable policy in speech to rebut ‘radical’ claims:

OPINION: It’s not a radical policy at all.

In fact, having Treasury cost the political promises of all parties not only seems fair, but really rather reasonable.

At her State of the Nation – the first in a series from all political leaders – Green Party co-leader Metiria Turei was at great pains to rebuke criticisms from some that their policies represent a shift to the “radical” left.

Treasury already has a small budget to do that if parties wish – it’s smaller than the $1million to $2m in a normal year, and $3m in an election year that the Greens estimate it would cost to make the system workable.

No party taps into the existing fund.

Indeed, at the last election, the Greens paid for independent audits of their policies themselves. It was in their interests to; many voters would flinch at the idea of a Green Party with a hand in Government spending.

But the reason parties don’t use the money available to reinforce their policies is because it’s accountable to the Finance Minister of the day.

And in the dirty game of politics, you bet that Government would use the information for their own election designs.

That’s the problem now, so opposition parties don’t use Treasury.

Turei has written to all leaders asking for cross-party support of this particular policy. Labour have indicated their support, but the big fish to land is National.

For them to do so would be to give up a significant advantage, which seems unlikely. Even in the face of claims that opposition to the Green policy would clearly be for their own election interests.

After all, this seems like a policy that would appeal to political party, and policy wonks in Wellington (whose votes are often already decided), but few through mainstream New Zealand are likely to take a great interest.

A shame. Because after a year of increasingly rising barriers to the access of public information, surely the national interests lie in making the next election more democratic, not less.

That’s certainly in the national interest but it may not happen if it’s thought to not be in the National interest. Which would be a shame.

Leave a comment


  1. Goldie

     /  27th January 2016

    A very good idea. Perhaps a better place would be the non-partisan Parliamentary services, in the same way as the Congressional Budget Office?

    • Timoti

       /  27th January 2016

      How much would such a unit cost to set up? Would it cost more then the policies they analyse ? What about political neutrality? Would there be oversite? What about policy changes using pretexts or omissions?

      If the costing is reasonable, go for it.

  2. Brown

     /  27th January 2016

    I think this bollocks. The Greens would spend billions but claim that settled science about all sorts of things would see greater costs if nothing was done so bullshit just goes around in a circle with nothing really new learned. More waste of money justifying more waste of money – politics 101.

    • jamie

       /  27th January 2016

      That’s why the proposal is to get Treasury to do the costings.

      Are you saying Treasury would go along with a policy to “spend billions but claim that settled science about all sorts of things would see greater costs if nothing was done so bullshit just goes around in a circle”?

      I don’t think so.

  3. Non partisan parliamentary services sounds the perfect place for me – not in a ministry.

    The cost for the new unit should be deducted from the parties parliamentary budgets so no additional cost for the taxpayer to bear. The monies are already in the parties budgets they choose to use them external to the parliament or ministry right now so no kin off their budgetary nose.

    But I wonder if the undirected analysis will sit well with some parties if this happens : )

  4. Zedd

     /  27th January 2016

    100% Pure.. politics from ‘Team Key’
    it wasn’t their idea, so regardless of how good (or bad) it maybe they will NOT support it anyway ! 😦
    More of the “We know best !!!!!!!” (Smug & plain arrogant)

    • Timoti

       /  27th January 2016

      Welcome to politics.

      • Blazer

         /  27th January 2016

        Welcome to politics National …style.

      • Timoti

         /  27th January 2016

        Reminder to self: vote for the left. They aren’t smug or arrogant. They will love me, and want what is best for me. Geez, all these years of not knowing

        • Zedd

           /  27th January 2016

          @tim “ho ho… UH ?”

          at least the Left, seem to listen to ALL the people of Aotearoa/NZ..

          ‘Team Key’ & Co. only listen to the 50.1% who voted for them.. then put the boot into the rest of us, who didn’t 😦

          BUT you are RIGHT.. ‘thats current politics – ‘T-K’ style’
          ….. Roll on 2017

          • Timoti

             /  27th January 2016

            “at least the Left, seem to listen to ALL the people of Aotearoa/NZ.”

            ‘Team Key’ & Co. only listen to the 50.1% who voted for them.. then put the boot into the rest of us, who didn’t”

            Yep, another person who doesn’t understand MMP.

            • Zedd

               /  27th January 2016

              oh really..

              OR maybe I just don’t get : SMUG, arrogant & totally selfish.. to the complete exclusion of all others who have a different point of view. :/

            • Timoti

               /  27th January 2016


  5. Ratty

     /  27th January 2016

    Audit Office

  6. Brown

     /  27th January 2016

    None of the above. Just tell punters that we will take x amount extra from your pay without any tangible benefit or tell punters that we will make lentils legal a lunch requirement with the cost being met by not funding as much Pharmac and then have a binding referendum that requires 75% of net taxpayers (not people on welfare) to support it. That will sort it out.

  7. I would have responded, if I were in Parliament, that there were much cheaper things that could be done inside Parliament to improve the standard of our democracy . The first thing which would carry no financial implications t, that is needed is a prohibition of MPs using Party Ideology as the basis for policy formulation, discussion and law-making. A written Constitution backed by a Bill of Rights should be the simple test against which our Laws should be examined. Discussion in Parliament needs to be de-personalised and focussed on common-sense and practical solutions to the problems of Governing the nation according to sound well-defined principles of Justice, Humanity and Human Rights. Personal attacks should be absolutely prohibited. Play the ball, not the man! We need to examine the value or otherwise of pressure groups in society and decide the rules by which they should be disciplined by a Common Law approach to claims of privilege, but at the same time acknowledging that equal opportunity for all and recognition of excellence in contributing to the Public Good. People who succeed in their chosen sector of living should be rewarded for their success and be not regarded with jealousy. Assets inherited should not provide an easy route to success unless the success is based on demonstrated Excellence. So-called democratic-socialism, or communism in all its guises, has no place in the New Zealand ethic.
    Too many idealogues rely on the “drop of water on a rock” approach to make social change. Not enough can demonstrate a logical reason for change based on evidence tested by the scientific and commonsense tests available. Our Journalists used to have a firm grasp on commonsense, but are now possessed by idealogical concepts, and a desire to achieve power in the community by supporting instant appeals to emotion, and incestuous approaches to social problem solving. They write or speak to feed their egos, not to define solutions to some very hard human problems.


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