Greens say scrap the Budget rules
The Green Party’s official review into the Budget Responsibility Rules has suggested the party scrap them and spend much more.
The review, written by a group of prominent party members, has been leaked to Stuff ahead of being sent out for consultation last night. It suggests the Budget Responsibility Rules – a set of targets to keep government debt and spending low signed up to by the Greens and Labour ahead of the last election – ‘‘embed neoliberalism’’.
‘‘The Green Party opposes fiscal strategy which includes arbitrary point targets for government debt and government expenditure,’’ the report notes.
‘‘The current approach ... embeds neoliberalism in both legislation and in the way the national accounts are prepared.’’
The review followed serious anger from members at the party for its commitment to the Budget Responsibility Rules – a decision itself driven by the party’s MPs more than its members.
The review sets out a proposed new fiscal strategy for the party to be inserted into its wider economic policy, which would ‘‘incorporate the need to transition to a circular economy which does not rely on unlimited growth’’ and ‘‘recognises the multiple roles of the tax system as set out in the Taxation section of this Policy’’.
The party did not have a specific fiscal policy before this.
‘‘The Green Party supports a broader and more balanced approach to fiscal policy in line with both the overall principles of this Policy, and the recognition that unlimited material growth is impossible,’’ the reviewers write.
Fiscal strategy should ‘‘maintain macroeconomic stability, including full employment and controlled inflation’’ and ‘‘uses the full range of tools available to finance government expenditure, and choose the mix between them on the basis of their effects on broader goals’’.
The review was commissioned because ‘‘we are a party that believes in bold, progressive economic policies that focus on the health of our planet and the well-being of our people’’, its writers say.
It is intended to inform the party’s 2020 election platform.
Co-leader Marama Davidson expressed serious scepticism towards the budget rules when she ran for co-leader of the party.
Her fellow co-leader James Shaw, also the associate finance minister, is understood to have been one of the driving forces behind the rules in caucus.
Green members are not alone in their distaste for the rules, with economists from several political slants saying the time is ripe to boost public spending, as interest rates are low.