Finance Minister Nicola Willis says she tried to get her proposal for a costings unit across the line. Photo / Mark Mitchell
New Zealand will not be getting a publicly funded body to cost political parties’ election promises for the 2026 election after Act and NZ First shot down a proposal to create one at Cabinet on Monday.
The decision brings an end to a nine-year fight to create a publicly funded election policy costing unit.
The proposal from Finance Minister Nicola Willis was different from those that have come before.
She would have amended the Public Service Act to allow political parties access to public service resources up to 10 months before an election to cost their policy promises. A unit in the Public Service Commission would have been created to co-ordinate those requests, funded with $1.2 million.
“I took a proposal to Cabinet this week for an independent budget costings unit and, ultimately, the coalition Government has opted not to progress that proposal,” she said.
“The proposal was put forward in line with my pre-election commitment that I thought having an independent costings unit would help inform better political debate. I recognise there are also risks, and ultimately Cabinet took the view that the risks outweighed the benefits.”
Act leader and Deputy Prime Minister David Seymour said his party had “managed to put out alternative budgets fully costed every year we’ve been in opposition”.
“We’ve never had a problem doing it, so we don’t understand the need,” he said.
He disagreed with the idea that such a unit would help clear up messy election year debates, noting that Willis herself had recently expressed frustration with public sector modelling for the Government’s FamilyBoost policy.
“We reject this idea that everything a government department does is right,” he said.
He also said it would put the public service in a position it should not be in during an election campaign.
“You can’t have the Government auditing the very election process that’s designed to hold them accountable,” he said.
Bitterly fought battles over “fiscal holes” have dogged election campaigns since 2017, causing Labour, the Greens and later National to back the creation of a publicly funded body to cost political parties’ election promises.
The idea is the costings produced by the unit would have the backing of public sector economists, allowing the public to trust the integrity of what political parties were promising voters and reducing the likelihood the election campaign would degrade into a scrap over fiscal holes.
Metiria Turei, then-Green Party co-leader, proposed the idea in 2016.
In government after the 2017 election, Labour and the Greens sought to create an Officer of Parliament to cost promises, but the then National leader Simon Bridges refused to consent to the idea, meaning the proposal could not proceed (Officers of Parliament are typically created by the consensus of the House).
National later reversed its opposition with finance spokeswoman Willis writing to then Finance Minister Grant Robertson saying she was keen to build consensus on a proposal. Robertson blocked that idea, saying it was too close to the election to build such a unit.
The plan was revived after the 2023 election with the support of National, Labour and the Greens. But Act and NZ First have blocked the latest iteration of the idea, meaning parties will need to cost their own policies at the 2026 election.
A Cabinet Paper for the idea would have amended the Public Service Act to allow any political party represented in Parliament to access public service resources for political costings 10 months before the last possible day of an election or eight months before polling day, once announced, whichever was earliest.
A unit would be established within the Public Service Commission to liaise with political parties about the policies they wanted costed and then commission costings from across the public service.
The last costings unit idea would have been established as an independent Officer of Parliament with its own resources to cost policies independent of the public service. This was done to prevent potential leaks and make the unit accountable to Parliament and the parties in Parliament, rather than to the government of the day.
However, that idea came at a high cost, because it would have required hiring a team of people to cost policies independently of the public service.
Willis’ idea was based on the support parties receive from the public service when they enter coalition talks after an election. The public service gets in touch and offers some support to cost up policies as the parties come together to form a Government.
Her proposal would have extended that support to the period before an election.
The unit would have costed individual policies, but parties would be responsible for putting those policies together into a fiscal plan and modelling how that plan would change the level of surplus or deficit and the amount of borrowing. The fact overall fiscal plans would not be modelled by the public service would mean some “fiscal hole” debates would likely have persisted.
The costings and any information related to the costings would have been subject to the Official Information Act.
Willis’ paper raised concerns with the proposal. She warned that it would divert resources from the Government’s own work before an election.
She also noted it could put departmental chief executives in a difficult position relating to their responsible minister.
Willis was also concerned about leaks.
“Leaks of information are more likely with a commissioning model as it requires the sharing of information with a larger number of people. A leak could impact the outcome of the election, bringing the integrity of the election into question,” the paper said.