Editorial: Greens' policy cost idea gold at voting time

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The Greens had given the other parties notice of their proposal before it was announced in co-leader Metiria Turei's "State of the Nation" speech. Photo / Michael Craig
The Greens had given the other parties notice of their proposal before it was announced in co-leader Metiria Turei's "State of the Nation" speech. Photo / Michael Craig

Amid the fanfare surrounding Labour's education policy release at the weekend, it should also be acknowledged the Green Party has made a good start to the year, with a proposal that is reasonable, moderate and financially responsible.

The suggestion an independent unit should be set up within Treasury to provide costings of each party's election policies is one the Government will find tough to turn down.

Much as it might like to, social policy initiatives from the Opposition can easily be dismissed as fearfully expensive without reliable figures - Labour's free tertiary plan being a timely case in point.

The Greens had given the other parties notice of their proposal before it was announced in co-leader Metiria Turei's "State of the Nation" speech last week.

They have asked the others to support it. National clearly did not take much notice because it sent mixed messages when the proposal became public.

The Prime Minister thought it "not a terribly good idea" while his Acting Finance Minister, Steven Joyce, said, "I'd say we'd be open to it, but let's see what other Opposition parties think."

Labour's leader likes it, and no wonder. Labour has been always too easily portrayed as the less fiscally responsible of the two main parties when the truth, more often than not, has been the reverse.

From the "black budget", as National called it, of 1958 to the present, Labour has been more careful to balance its spending with revenue and more willing to raise taxes when necessary.

National, reflecting a business outlook, has been more comfortable with debt than Labour has been.

National is too keen to offer tax cuts at an election without specifying cuts to expenditure. An authoritative independent evaluation of their fiscal impact would be most useful for voters.

As things stand, the Treasury cannot run a rule over election proposals unless one is requested by the Minister of Finance. Only those assessments of its own or other parties' policies that suit the governing party are likely to be made public.

Under the Greens' proposal, all parties in Parliament would be able to seek a Treasury costing of their policies from a unit within that department constituted with some sort of autonomy.

It is not clear whether parties submitting their manifestos for costing would decide what figures were made public.

The public would be best served if once a policy was submitted to the unit its findings were automatically made public.

Parties might not welcome the risk, and might withhold some proposals from an evaluation, but that would do nothing for their credibility.

An independent costing of each party's planks would clear away some of the irreconcilable arguments at election time but could not, and should not, resolve all economic debate.

The economic costs of policies can be much more important than their book-keeping entry. Labour's newly announced promise of three years' free tertiary education for everybody, for example, might cost the $1.2 billion a year the party claims.

That figure is based on the cost of students' contributions at present. If tertiary study became entirely free, the number of students would probably rise. That makes the true cost less easy to calculate.

But an independent costing agency would be well worth $2-3 million in an election, if the Greens' estimate can be believed.

- NZ Herald

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