Confusing partisan debates around political party policies could soon be a thing of the past after Cabinet gave the green light to the creation of a new policy costing unit.

Finance Minister Grant Robertson said ministers have recommended an independent Parliamentary Budget Office (PBO) be set up to cost party policies before elections.

Such an entity was in the Labour/Green Party confidence and supply agreement.

But the PBO would not be established until 2021, meaning it would not be in place before next year's election.


Robertson said it would have been ideal to have it set up sooner, but the Government was "taking the time to get this right".

However, Treasury will establish a new team to provide a policy costing service to the political parties, currently represented in Parliament, before the election.

Such an independent body was called for after the now-infamous "fiscal hole debate" before the 2017 election.

Associate Finance Minister James Shaw said the independent body would mean more transparency around what political parties are promising to do.

He said there would be "fewer political games played" as a result of the unit.

Treasury documents investigating the establishment of such a unit, released earlier this year, said recent elections have seen a significant focus on fiscal policy and the cost of election platforms.

A notable example of this was last election's $11.7 billion "fiscal hole" saga, where National claimed Labour's policy numbers did not add up.

Labour denied this.


With an independent costing unit, the risk of such a debate would be reduced.

"The PBO will help cut through the noise to deliver New Zealanders unbiased information during election campaigns," Shaw said.

He said New Zealand's democratic framework would be enhanced by the body.

"By levelling the playing field, meaning that political parties have access to the same resources to give the public consistent and independent information."

Robertson said he had been engaging with National and understands the party's finance spokesman, Paul Goldsmith, is consulting his caucus on the proposal.