A Green Party proposal supported by Finance Minister Grant Robertson to set up an independent Parliamentary Budget Office to cost election promises appears to have been thwarted by the unlikely combination of the Speaker and the National Party.
The purpose of the office would have been to provide independent election year costings of party policies.
POLITIK understands that Robertson has now been forced to look at other answers to the Greens proposal, which is contained within the party’s confidence and supply agreement with Labour.
Speaking during Labour’s Caucus retreat at Martinborough last Thursday, the Prime Minister, confirmed that the Budget Office would not be in place for this election.
Instead, she said Labour would commission an independent agency to cost its promises.
“We haven’t made that decision around exactly who it will be,” she said.
“It will be a third party.
“I think that’s important so that New Zealanders can have faith that it’s independent of the Labour.”
Last election Labour used Berl, a Wellignton economic consultancy to cost its proposal. Though Berl is independent, it is the preferred economic consultancy for groups on the left like the Combined Trade Unions (CTU).
Finance Minister Grant Robertson, who sup[poprted the proposal for a Parliamentary Budget Office, said that it was never going to be in place in time for this election.
Instead, it might have been possible to establish an interim costing unit in Treasury.
“It became clear that certainly, the National Party wasn’t going to use it because it was in the Treasury,” he said.
But the opposition from National was matched by constitutional objections from the Speaker.
Speaker, Trevor Mallard, who chairs the Officers of Parliament Committee, which last year was considering the proposal told POLITIK last night there was no proposal for such a Budget Office currently before the Committee.
In other words, he appeared to be saying that the proposal had been withdrawn.
One source, familiar with what has been going on, said it had been “sunk” by Mallard and National.
Mallard has Always opposed the proposal on the grounds that “Officers of Parliament” should only be created if they have parallel powers to Parliament.
He draws on support from the former Clerk of the House, and the author of the standard text on Parliamentary Practice, David McGee.
In that book, McGee quoted a 1989 Select Committee on why an Office of Parliament should be created.
- An Officer of Parliament must only be created to provide a check on the arbitrary use of power by the Executive.
- An Officer of Parliament must only discharge functions that the House itself, if it so wished, might carry out.
- An Officer of Parliament should be created only rarely.
- The House should, from time to time, review the appropriateness of each Officer of Parliament’s status as an Officer of Parliament.
- Each Officer of Parliament should be created in separate legislation principally devoted to that position.
The role of a Parliamentary Budget Office would be simply to cost election proposals from various parties.
Clearly, it would not fulfil the criteria laid down by that Select Committee.
But in advice to Mallard’s Committee, Treasury supported the proposal because it would ensure the independence of the costing process.
“The Officer of Parliament model is preferred as it provides a high degree of real and perceived independence from the Executive,” Treasury said.
“Bipartisan processes to agree on funding for the PBO are an important part of establishing and reinforcing its independence.”
POLITIK understands that Treasury is now working on alternatives which include one proposal to set up an independent Crown entity to provide the costings. That would require legislation and provision for its running costs in the Budget. Treasury argued the danger of this is that it would become a captive of the Government.
“The budgets of legislative branch departments are considered by Cabinet, and changes are counted within budget allowances,” it said.
Treasury said that because Officers of Parliament had their funding decided by a Select Committee, it would be more difficult for the Executive to adjust their budgets without cross-party agreement.
However, Robertson speaking at Martinborough said that the proposal was not dead.
“There will certainly still be if we’re we re-elected the ability to put the parliamentary budget office of the place,” he said.
POLITIK understands that the preferred option now is one similar to that in Australia.
Treasury said that the Australian office fell half between a New Zealand Officer of Parliament and a stand-alone entity.
“Similar to the New Zealand Officers of Parliament model, a crossparty select committee considers the annual funding for the Australian PBO and then makes recommendations to Parliament,” it said.
“ However, the government is not required to agree with these recommendations.”
Though it is an arcane constitutional debate, it is important. There is nothing quite as sensitive during an election campaign as the costing of party policies.
However, this year it looks like both parties will be producing their own costings with no independent verification.