Do election costings change votes? An economist doubts it

Economist Michael Reddell says election costings rarely change votes, and an independent costings unit would be unlikely to change that.

He told RNZ he could not recall ever changing his vote because of a costing. Rows over so-called fiscal holes, where one party says another party's numbers do not add up, had little impact on results, RNZ reported.

He pointed to the 2023 election. Questions about National's costings did not stop National winning.

That row was about whether National's promises added up. Reddell, who describes his own views as right-leaning, checked the numbers with economist Sam Warburton, who is left-leaning. They concluded the costings "aren't credible".

National leader Christopher Luxon said at the time he was "extremely confident" in the figures. He called them "absolutely rock solid", but would not release the modelling behind them.

After the election National formed a government with ACT and New Zealand First. It then rewrote its fiscal plan, its outline for paying for promises, including dropping a plan to raise money through a 15 percent tax on house sales to foreigners.

The costings unit idea was meant in part to stop repeated claims about fiscal holes and uncosted policies. Both major parties included a version in their fiscal plans. The National Party released its fiscal plan setting out how it would pay for its promises.

National's plan set aside $1.2 million every three years for a unit to independently check the cost of election policies. Labour's plan promised an "independent pricing authority" at $6 million a year.

Neither plan has gone ahead. National tried to advance a unit during this term, but could not get agreement from New Zealand First or ACT.

Greens co-leader Chlöe Swarbrick dismissed National's proposal. "I would be happy to see this if I believed a word that Nicola Willis was saying" about the costings unit, she said.

Reddell said he would be surprised if a unit made much difference. He called it a job creation scheme for economists and asked whether it would add value.

He said Australia has a costings unit where parties must submit policies, and the debate there did not look much better.

The broader context here is familiar to people who cover Parliament. Fiscal hole rows fill a week of campaign coverage. They give reporters numbers to compare and give opponents an attack line. They rarely settle anything before polling day, because most voters do not have time to check competing spreadsheets. In my view, that is why campaign staff will understand Reddell's scepticism even if finance spokespeople disagree. A unit could set common rules and cut simple errors. It would not remove the incentive to pick sunny revenue forecasts, time costs to suit the campaign, or blame the referee when the result is unhelpful.