“There’s a hole in your budget, dear Labour, dear Labour, there’s a hole in your budget, dear Labour, a hole.”

It is a pity that Finance Minister Steven Joyce did not sing his Monday press conference. It would have been an appropriate start to a week of political theatre.

Joyce’s claim that there was an $11.7 billion hole in Labour’s fiscal plan was a bold and provocative interpretation of Labour’s spending plans. However, as economists left, right and centre confirmed (including the Initiative’s own Sam Warburton and Eric Crampton), Labour’s budget matched its stated spending intentions.

But just because figures add up does not mean they would allow Labour to fund what it or the public really thought it was going to be able to spend.

Labour had presented a fiscal plan which beefed up spending on social welfare, health and education by $12.6 billion over the next four years. For other areas, Labour has left itself $4.1b over the same period. The question now being asked is: is that enough for public sector wage and cost increases? Perhaps not.

With some smoothing of the allowance over time, Labour’s allowance is equal to about 2% inflation per year. As Grant Robertson has said himself, this is tight. Indeed, it might be too optimistic.

Joyce could have asked Labour if they were really planning to run severely constrained budgets for the coming years. Or he could have questioned which programmes in, say, defence or policing they would cut to make room for public sector wage increases.

These would have been legitimate questions given how tight Labour’s fiscal budget actually is.

Instead, the Minister referred to a hole. In the context of an election campaign, this certainly conjures up more vivid public imaginations than a reduction in the operating allowance would do.

In fairness to Joyce, there are questions about whether Labour has enough flexibility in their budget. In fairness to Labour, it is not what Joyce originally claimed.

There is a lesson from this incident. We cannot leave it to the parties to check each other’s spending plans. Especially before elections, fiscal policy needs an impartial umpire.

The only hole we have in fiscal plans is independent scrutiny of Government’s and the parties’ numbers. 

“And with what shall we fix it, dear National, dear Labour, and with what shall we fix it, dear pollies, with what?”

The answer is a fiscal watchdog. The Initiative proposed it in 2014.

Both Labour and the Greens have since adopted the idea.

National should do so too. It would spare us more such theatre in future elections.