Avoiding the election budget “black holes”
In April this year, astrophysicists did the seemingly impossible and took a photo of a black hole. The black hole is more than 50-million light years away, which, incidentally, was how far away I wanted to get during 2017’s election scrapping over the existence or otherwise of an $11.7b fiscal hole.
Much like the destructive power of a black hole’s gravitational pull, Steven Joyce’s claim that Labour’s slate of election promises had a huge fiscal hole devoured all the precious space for more productive discussion. Already a precious commodity, the rare debates about actual policy differences shifted to a cynical back-and-forth about numbers and trust. Our collective focus was fixed on a negative “he said – he said” void, rather than exploring the complex constellations of policy promises and political visions.
Offering voters more certainty and politicians less wiggle room for these kind of shenanigans
One way to stop this kind of thing happening again is to establish an independent fiscal body capable of costing election promises; offering voters more certainty and politicians less wiggle room for these kind of shenanigans. This is precisely what the Government is proposing in response to their Confidence and Supply Agreement with the Greens: a Parliamentary Budget Office (PBO).
The idea is well-established internationally, with 29 of the 36 OECD countries already touting Independent fiscal institutions of their own. Most have mandates to analyse long-term fiscal sustainability (which our Public Finance Act is renowned for) and macroeconomic forecasting (which Treasury is respected for). While the election platform costing function is less common, only present in the Australian, Canadian and Dutch bodies, there is good evidence that this has proven effective in these jurisdictions.
The proposed Office will only be as successful as it is independent. As such, it’s a good thing the Government’s proposal suggests the Office should be outside Parliament, holding a rank of “Officers of Parliament” like the Auditor General or the Ombudsman, rather than sitting under Treasury as the Greens proposed.
But this isn’t enough for Opposition Leader Simon Bridges, who this week reckoned out loud that this proposal is the Government’s attempt to “illegitimately, undemocratically screw the scrum on the Opposition.” The thing is though, if done well, this Office would do the exact opposite. It would empower opposition parties that lack the incumbent policy-making heft of Treasury a way to get their election platforms independently costed, bridging the legitimacy gap that currently exists.
This might be a good political reason to oppose the idea, but not good enough for the long-term democratic health of our country.
Commentators opine that National is denouncing this because they currently possess an reputation as the most economically reliable party, and anything that allows a non-partisan method of challenging this perception in an election is bad news for National. This might be a good political reason to oppose the idea, but not good enough for the long-term democratic health of our country.
This isn’t astrophysics, but there is significant gravity to this situation. This Opposition, for the sake of all oppositions (and the sanity of voters) to come, should get behind the Parliamentary Budget Office. Opposing solid policy like this while in Opposition shows you probably want to remain there.