In 2011 Australia set up a Parliamentary Budget Office (PBO) to provide an impartial costings of the election commitments of political parties during the campaign period and to assist parties in their costings outside the campaign period. Canada had set up a similar office in 2006.
The Congressional Budget Office, with a much more expansive mandate was established in the US in 1974. The New South Wales Parliament followed the federal example and set up its own PBO.
In this context the proposal by Metiria Turei to set up an independent costing unit for New Zealand seems very sensible and mainstream.
It is a major change to the conventions around election costings in New Zealand. The current position as set out by the SSC and Treasury in their guidance for public servants published on their websites in the lead up to the 2014 election is that only the Finance Minister or relevant portfolio minister can request costing of party election promises.
This not an option open to the Opposition or other non-government parties. In 1998 the Howard Government in Australia introduced the Charter of Budget Honesty Act. While modelled on New Zealand's Public Finance Act in providing for a pre-election "opening of the books" it also expressly provided that during the pre-election period the Prime Minister and the Leader of the Opposition could request the Secretaries of the Departments of Treasury and of Finance to prepare costings of their publicly announced policies. Since the establishment of the PBO in 2011 minor parties can also request costings and parties can approach the PBO instead of Treasury and Finance.
Allowing non-government parties to have their policies properly costed levels the playing field between the government and other parties and can improve the quality of policy debate in the lead up to an election. Whether this actually happens depends on how the costing unit is structured, but a lot more on how the parties make use of it.
Ideally an independent parliamentary costing unit sits outside the public service and is led by a parliamentary officer responsible to the legislature not the executive. If the unit is only to function during election campaigns, this may seem prohibitively costly. If it is to function throughout the life of a Parliament determining the appropriate location is of greater importance.
The Australian Parliament considered placing the Parliamentary Budget Office within the Parliamentary Library. This may be a viable alternative to a standalone agency for New Zealand. Wherever the unit is located, it would need the power to second from other agencies to inform its costing approach.
Whether costings are to be confidential or automatically made public is one of the most important structural decisions and debate on this nearly derailed the establishment of Australia's PBO. The established practice from Australia under the Charter of Budget Honesty and continued following the introduction of the PBO is that during the campaign, only publicly announced policies are costed and the costings are automatically released.
