Analysis by Dr Bryce Edwards – The nature of New Zealand general election campaigns could be significantly changed with the proposed establishment of an “umpire” to adjudicate over political party manifesto policies. A suggestion has been put forward by the Government for the establishment of a parliamentary watchdog to make rulings on the economics of each political party’s policies.
This could have a big impact on the debate. Ideally it would create more reliable information for voters on who to trust, and it could help cut through the “spin” of the campaigns. But it may also impact in other ways and there are some interesting debates about how such an election umpire would work, and whether it might actually lead to worse outcomes in campaigns.
The main problem is that all political parties have very strong partisan motivations for either bringing in this new umpire or to block its establishment. Labour and the Greens – who both want a new Parliamentary Budget Office set up – are clear: they believe their parties are vulnerable to attack from National over their policies.
They have had to defend themselves from claims that their policies are financially reckless or don’t add up. In everything from KiwiBuild to taxation, National have raised concerns in recent election campaigns that have led to voter suspicion that Labour and Green policies aren’t well thought through.
Therefore, this week the Government announced, seemingly without much consultation with the Opposition, that a new umpire for elections would be set up. For next year’s general election, Treasury will be used to adjudicate on costings for party policies, but from the 2023 election onwards a body of economists answerable to Parliament will be established in order to cost the various political party promises.
Claire Trevett explains today that Labour feels hard done by from recent election campaigns when it’s had economic policies challenged in what it regards as an unfair or dishonest manner: “A proposal for an independent but state-funded body to assess the costings of political parties’ policies is the result of a few lessons which were hard learned by Labour. Those lessons were stark in the 2011 election when Key pinioned then leader Phil Goff with his ‘Show Me the Money’ line, questioning how Labour would afford its policies. This was reprised with equal effect in 2017, when Steven Joyce popped up his claim of a $11.6 billion hole in Labour’s costings” – see: Why the National Party does not want a policy costing unit (paywalled).The establishment of an independent umpire on policy “facts” might help Labour win those debates. The Greens promoted the idea back in 2016, and then made it part of their coalition supply and confidence deal with Labour, and they also hope to benefit from it. As Alex Braae has pointed out, the Greens have been promoting the new election policy umpire as a way to deal with National Party propaganda: “On twitter, the Greens put out an image showing a tiny green pin pricking an inflated blue balloon marked ‘political hot air’. It’s political symbolism with the subtlety of El Lissitzky” – see: National cries foul over political referee idea.
Braae raises questions about the politicisation of such an umpire: “what mechanism would be in place to prevent the facts being decided in a way that ended up suiting one party or another? Moreover, we live in a world where such pronouncements from independent bodies are almost immediately politicised anyway. Why would this be different?”
Braae says that National’s leader Simon Bridges might be right to describe the Government’s proposed election campaign umpire as “an opportunity they see to illegitimately, undemocratically screw the scrum on the Opposition”. He argues this is because, “On a grand scale, it feels similar to one of those political fact-checking units at media organisations in the USA.” And he questions whether such fact-checking can be objective, especially when it comes to economic theories, pointing to a recent article about the Washington Post’s fact-checker – see Andrew Hart’s Glenn Kessler sucks and that’s a fact.
Of course, Simon Bridges and National are also playing partisan politics in opposing the establishment of the Parliamentary Budget Office. As Claire Trevett points out, Bridges has a very good reason not to want it established: “The political reason is that it will remove a powerful election campaign strategy for the National Party: the tool of being able to cast doubt on their rivals’ policy costings. In that regard, the prospect of having their own policies assessed by outsiders is nowhere near as bad as the prospect of their rivals being able to do so.”
Sam Sachdeva also argues that the introduction of such an umpire might blunt National’s attack lines against Labour and the Greens: “Having an independent entity which could, in theory, authoritatively prove or disprove the claims would reduce National’s ability to portray its opponents as spendthrifts and rely on its own public reputation as a responsible economic steward (fairly earned or otherwise)” – see: Bridges digs himself deeper over policy costing plans.
Sachdeva raises some of his own problems with the Parliamentary Budget Office idea – especially the issue that the parties themselves get to choose if the reports on the policies are released to the public: “One problem is whether parties will be willing to publicise the PBO’s findings should it prove embarrassing. The Greens’ initial proposal required costings to be proactively released after a party announced its policy, but Robertson has confirmed costings under the Government’s plan would only be commissioned and released at a party’s request. In theory, public pressure and political attacks should compel parties to play ball or face the consequences, but that may not always hold true.”
There’s also a question over whether this focus on “fiscal responsibility” is likely to have a limiting impact on leftwing parties pushing more radical and progressive policies. Here’s Sachdeva’s point about this: “Another question mark is whether the PBO would have a similar constraining effect that some critics attribute to the Government’s Budget Responsibility Rules, emphasising prudent fiscal management above all else. Green Party co-leader James Shaw has argued that the PBO would not embed an austerity approach due to its carefully designed mandate, but some left-wing commentators have already questioned the plans on social media.”
On the left, blogger Martyn Bradbury, has reacted similarly, asking: “Why would you trust the neoliberal Wellington Bureaucratic elites to cost political promises?”
Certainly, in the past, it’s been the political left who has been more suspicious of such fiscal responsibility mechanisms. For example, in 2016 one of the current Green Party media staffers wrote about the dangers of the policy.
The biggest cheerleaders for the policy tend to come from the political right. The NZ Initiative (formerly the Business Roundtable), were the original proponents of the policy, promoting it as far back as 2014. And today, their chief economist, Eric Crampton writes strongly in favour of the Government’s initiative, and argues for the new watchdog to be extended further into a “fiscal council” to monitor government spending in general, which he says would make the proposal more attractive to the National Party – see: The parliamentary budget office should be just the beginning.
Also from the political right, the Taxpayers Union are likewise full of praise, with spokesperson Louise Houlbrooke saying the concept would help their project of reducing government expenditure: “It’s not often we support new spending initiatives, but this one is a goodie that we’ve been backing for years. The operation of the Office should actually save taxpayers money in the long run: political parties will be less likely to commit to low-value spending when the effect on taxpayers is clear.”
Similarly, Federated Farmers have been strongly enthusiastic, and are keen to see the project fast-tracked so it is available for next year’s election.
And, for another sympathetic view from the political right, see David Farrar’s An excellent Government/Green initiative that National should support. He says that Simon Bridges is on the wrong side of this debate, and concludes: “This proposal is good for voters, good for fiscal conservatives and good for responsible political parties that want to ensure their policies are affordable. I hope it gets unanimous support by Parliament.”
Some analysts therefore see a risk that, as well as some of the positive impacts on election debate, the establishment of the Parliamentary Budget Office could play a very conservative role in politics. For example, Thomas Coughlan says that a “fair criticism is the way a PBO might bed in the existing political status quo” – see: Budget Office politics see post-truth come to Wellington.
Coughlan also raises the question of whether Treasury and other government officials are actually up to the task of the difficult role of economic forecasts: “The Gabriel Makhlouf scandal exposed how little faith many in Wellington have in Treasury forecasting. Surely it’s important to improve the quality of economic advice available in Wellington if we’re now going to have every political policy costed ahead of an election. It’s incredibly difficult to forecast where an economy is going to be in four years, and how much the Government will be able to take in tax from that economy. For that reason, one might reasonably ask whether there’s any point in costing political policies at all.”
There is also a possible problem – already raised by Simon Bridges – of whether political parties will be able to trust the new organisation to keep their unreleased policies secret. This is also raised today in an otherwise highly-positive editorial in The Press – see: Voters would be well served by a referee in the fiscal fight.
The newspaper points out that the new body would have such great independence that leaks would be unlikely: “having a similar status to the auditor-general, the ombudsman and the parliamentary commissioner for the environment. Hopefully, this independence would assure Opposition politicians that budget information and planning would be secure.”
But writing about this today, Claire Trevett can see this being a problem, because political parties would need to submit their secret policies to the costing unit before they release them to the public: “That would allow a party to decide whether it needed to amend (or scrap) a policy before the public had seen it. Having it costed after a policy was announced could result in the embarrassment of having to subsequently water it down or admit it was unaffordable. However, that is expecting political parties to trust an external body with highly sensitive and confidential material: campaign promises. Politics and paranoia go hand in hand, and with good reason. However independent such a body might be in structure, where there are humans there are risks of leaks. National will not be the only party wary of using the unit because of that.”
Finally, former Cabinet minister Peter Dunne, who has seen a fair few election campaigns and worked in both Labour-led and National-led governments, says that both Simon Bridges and Grant Robertson are looking childish and petty over the proposals, but he also admits that as much as he likes the concept of the Parliamentary Budget Office, he has some reservations about the way it’s being handled – see his blog post, At first glance Bridges opposition to costing party promises looks childish and petty.
