Greens decide to scrap restrictive budget rules

The Green Party are ditching their commitment to the restrictive Budget Responsibility Rules, which set targets for lowering government debt and spending.

The Greens first signed up to the rules ahead of the 2017 election while teaming up with Labour.

Labour have retained a commitment to the rules, while signalling they wish to somewhat loosen them next term.

The most stringent rules include a commitment to reduce net core crown debt to less than 20 per cent of GDP within five years, and to keep government spending at or below 30 per cent of GDP.

These rules have caused serious upset within the Green Party base and caucus, with both female co-leadership candidates committing to get rid of them during the 2018 leadership race.

The rules went out for review earlier this year and the party’s policy group have now decided to scrap them, replacing them with a new economic policy that promotes greater public spending. An email was sent to members announcing this change yesterday morning.

Green Party co-leader James

Shaw said the rules had ‘‘limited the Government’s scope for change.’’

‘‘Especially in light of what we know now about the infrastructure deficit, but also because of the changing economic conditions and opportunities, we require a new approach,’’ Shaw said.

‘‘The arbitrary debt and spending targets, are not appropriate and

‘‘The arbitrary debt and spending targets, are not appropriate.’’ James Shaw

have limited the Government’s scope for change.

‘‘Our new policy reaffirms our commitment to moving beyond GDP, focusing on wellbeing, and building a strong public sector.’’ Next year we’ll be developing this further and putting it in front of New Zealanders as a clear set of fiscal plans that build on environmental, social and economic sustainability.’’

Shaw, who is also the associate minister of finance, is understood to have been one of the driving forces behind the rules in caucus – seeing them as necessary to making the Greens more electable.