Budget 2025: Nicola Willis sets aside money for election costings unit

Finance Minister Nicola Willis set aside money for the costing unit. Photo / Mark Mitchell

• The most recent Budget included funding for a policy costings unit.
• The unit would help political parties calculate the cost of their promises.
• It would ideally be created with broad support from across the House. Nicola Willis’ office said this would begin after Cabinet agreed to the proposal.

The 2026 election may the the first in years not to be sidetracked by debates over fiscal holes, thanks to a Government plan to create a taxpayer funded department to cost political party promises.

Finance Minister Nicola Willis confirmed to the Herald the Government set aside funding in Budget 2025 for a policy costings unit.

Currently Governments have the cost of their policies tallied up by Treasury, however political parties have to do this largely on their own.

This frequently leads to allegations that a party has screwed up its costings, creating a “fiscal hole”.

Cabinet has not yet made a final decision on the costings unit. Willis confirmed funding had been held aside in contingency to fund the proposal when, or if, Cabinet agreed to it.

When that happens, the funding can be drawn down and the unit established.

A spokesman for Willis said there was “a contingency in the Budget for an election policy costings function. However, as Cabinet decisions are yet to be taken on it, it is not itemised as a specific spending line in the Budget. Proposals for the office will go to Cabinet shortly. If Cabinet agree to those proposals, funding would be drawn down from the contingency”.

Just what kind of shape the unit will take is not yet clear. Similar units exist in many other countries, but they differ in form.

It could be an appendage of Treasury, but that would run the risk of the Government finding out about Opposition party policies before they were announced.

Labour and the Greens were keen on a policy costings unit during the first term of the last Government and tried to get one established.

Their idea was to set one up as an Officer of Parliament, like the Auditor-General. This would give the unit a high degree of independence because Officers of Parliament officially serve the entire Parliament rather than just the Government of the day.

That idea fell over because the then National leader Simon Bridges did not back it.

National later reversed its opposition after Willis became finance spokeswoman, but by this time it was Labour and its Finance Minister Grant Robertson who was the roadblock. Robertson still backed the idea, but did not fund it in his last Budgets.

The Officer of Parliament idea has remained the most talked-about model. Labour’s finance spokeswoman Barbara Edmonds has a Members’ Bill which would create a Parliamentary Budget Officer, although her idea is for an officer with a much broader scope than National is likely to be comfortable with.

Green Party co-leader Chlöe Swarbrick has been banging the drum for a policy costings unit for years, both when her party was in Government and after the 2023 election, when the Greens went into Opposition.

Labour confirmed it had not been approached about securing bipartisan support for such an office. Willis’ office said she would seek Cabinet support for the proposal before engaging with Opposition parties.