Politics

Green Party starts review of budget rules

The Green Party is beginning a policy process that could see it dump the Budget Responsibility Rules.

The Greens signed up to the rules in 2017 alongside Labour while in opposition, keen to prove they were sound fiscal managers. Following the election, the rules became government policy.

But the rules have come under fierce criticism for holding back the economy and preventing the government from making necessary infrastructure investments.

The particularly stringent debt track, which commits the Government to reducing net debt to 20 percent of GDP by 2021/22, has been singled out for particular criticism.

The Greens have been open about plans to review the rules, and an email sent to party members on Wednesday said it was soliciting the views of its members on the issue. 

'Particular interest' in budget rules

The email said the party’s policy committee, headed by members Jack McDonald and Caroline Glass, was “looking for members to help review and develop the Green Party’s fiscal policies”.

The email singled out the budget rules for special attention, saying: “We know there is particular interest in the Budget Responsibility Rules (BRR) and the Green Party’s position on these."

The committee will take the views of members and come to a view which it will present to the Summer Policy Conference in March. From there, it will take several more months for the party policy to be firmed up.

The party caucus is then charged with taking the high level proposals from the Policy Committee and shaping them in to policy which will then be taken to the 2020 election. 

The BRRs are known to be unpopular with party membership for the way they constrain the government’s ability to stimulate the economy through spending, and by constraining the level of debt the government can take on to invest in infrastructure. 

Shaw: Time to look under the hood

Co-leader James Shaw said it was time to look “under the hood”.

“We said when we launched the BRR that when we were in government we’d be able to look under the hood to get a better idea of the state of things and that we’d review our stance on fiscal policy in advance of the 2020 election,” Shaw said.

“We’re therefore conducting a membership-led review of fiscal policy and will also be seeking input from community groups, unions, academics and others."

Co-leader Marama Davidson’s comments, made alongside Shaw in a statement, signalled some opposition to the rules in light of the government’s strong fiscal position. 

“We are sitting on a surplus, we have the lowest cost of borrowing in recent history, and our country has crumbling infrastructure successive governments have kicked the can down the road to future generations,” Davidson said. 

“We expect to have a different fiscal policy position for the 2020 election and will be sharing this with New Zealanders following the review,” she said. 

During the contest for the Green co-leadership last year, both Davidson and Julie Anne Genter said they opposed the debt track rule.

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