The Greens’ watchdog

Published in Insights, The New Zealand Initiative’s newsletter, 29 January 2016

Albert Einstein said, “for an idea that does not first seem insane, there is no hope.” If Einstein is right, there is hope for the Greens’ proposal to establish a new office to cost political parties’ new policies.

In her ‘State of the Nation’ speech, Greens co-leader Metiria Turei presented the idea of having an independent unit within Treasury to assess election promises. In this way, Turei argued, voters would have better information to make more informed choices.

It did not take long for the government to reject the Greens’ idea out of hand. The Prime Minister dismissed the proposal saying that parties could just ignore the numbers and proceed with their preferred policies regardless. Fair enough, they might indeed. But Key’s objection misses the point.

In the end, no independent fiscal watchdog will ever make or stop spending decisions. This task will always be with Parliament, and that is where taxes, policies and budgets are rightfully debated.

The role of a watchdog is different. Its function is to scrutinise policies so that everyone knows what their costs are.

Of course, parties do not typically want to subject themselves to such independent oversight. It is much easier to govern without it. And when you are not in power, it is tempting to promise voters everything under the sun knowing that you do not have to deliver.

So the Greens’ proposal may be insane only because it is difficult to find political support for it. But it is highly commendable for its intentions. And it follows international best practice.

In many countries around the globe, there are now independent watchdogs contributing to a more informed political debate. Some are costing election proposals; most of them are checking if governments play by their own fiscal rules. Other watchdogs are also assessing the regulatory burdens resulting from new policies.

At The New Zealand Initiative we have presented our own proposal for an Independent Fiscal Institution in our report Guarding the Public Purse. It differs slightly from Turei’s idea, for example we would prefer a Parliamentary Office rather than a unit within Treasury. However, our intention of creating greater fiscal transparency is the same as the Greens’. Which is why we welcome their contribution to the debate.

That an incumbent dismisses it as a non-starter, probably means there is hope for it.

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