Watchdog needed to quell election-year squabbles over spending - economist

5:10 am today

National finance spokesperson Nicola Willis.

Photo: RNZ / Louis Dunham

An election-year tiff about policy spending highlights the need for an independent watchdog to weigh in on the country's big, expensive problems, an economist says.

On Sunday, National finance spokesperson Nicola Willis unleashed on Labour, claiming the opposition was $18.2 billion short on funding for its promised policies.

Labour finance spokesperson Barbara Edmonds fired back, labelling National "desperate" for producing the document it called 'Labour's Hidden Bill'.

Economist Cameron Bagrie said the argument was nothing new.

"We saw this in 2017, 2020, 2023... one side has a crack at the other in regards to making their numbers sort of stack up," he said. "We've been here before, not surprising."

All political parties partook in "promise me-nomics", claiming they could get the books back to surplus - and all would struggle to do so, he said.

"You've got to make tough decisions and those tough decisions involve trade-offs between tax versus infrastructure versus spending cuts.

"There's no easy way out, going from a large deficit back into surplus, and everybody's promising that, the question is, how do you achieve it?"

Labour finance spokesperson Barbara Edmonds.

Photo: RNZ / Louis Dunham

Bagrie said cross-party money squabbles could be solved by an independent fiscal watchdog, separate from Treasury.

Both Treasury and the Organisation for Economic Co-operation and Development (OECD) suggested that measure.

"Guess what, when you bring a little bit more independence into the game, the evidence, according to the OECD, is you do start to see a little bit more fiscal responsibility across the political fence," Bagrie said.

An independent body would not assess election campaign promises, he said.

"You'd expect [it] to be wading in pretty heavily - and a lot more active and vocal than Treasury is - on big issues such as population age, in particular, the fiscal cost," Bagrie said, referring to superannuation.

"These watchdogs... they bring a lot of independence and autonomy to the table, that pours a lot more sunlight on some of these key issues."

National, Labour yet to reveal fiscal plans

Edmonds said it was not unusual that all its planned spending details had not yet been announced.

"Nicola Willis is not a junior politician," she said. "She knows what happens during campaign years, she knows that parties release fiscal plans closer to the election, which shows the fully costed plan."

National has not released its plan either.

Both Edmonds and Willis indicated their fiscal plans would be revealed closer to the election, but neither would set a date.

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