The two most exciting items in this year’s budget barely even made it into the budget tables. Both point toward better fiscal futures.

First up, Hon James Shaw announced that the government will this year start work on a new independent fiscal council.

Last year’s election was dominated by whether there was a $12 billion hole in Labour’s proposed spending programme. That debate was always going to be sterile. Any coalition would pick up some of the policies and drop others. Policy-by-policy costings or, even better, policy-by-policy cost-benefit assessment, makes more sense.

The government will be investigating setting up an independent body to do that costing work, and to keep an eye on whether the government is remaining within the boundaries of fiscal responsibility commitments. This is all to the good.

The Initiative’s 2014 report Guarding the Public Purse urged the then-National government to adopt this kind of institution. We recommended a fiscal council as an independent Office of Parliament to serve a range of functions: monitoring compliance with fiscal responsibility principles, assessing the performance of major spending programmes, and assessing whether government has a sufficient eye on the long-term fiscal forecasts.

A strong, independent fiscal council providing checks on party promises during elections, and checks on delivery of programmes between elections, could greatly improve transparency and enable voters to better assess their options.

Next up, better infrastructure.

At the budget lock-up, Finance Minister Robertson was criticised for not spending enough on infrastructure. His answer was excellent. Large infrastructure requirements in Auckland require more than just government spending. He suggested private-public partnerships and special purpose vehicles for infrastructure delivery, and infrastructure bonds.

Auckland’s housing affordability crisis is, at heart, a problem of the incentives facing local councils when they bear all of the costs of enabling growth but see little of the benefit.

Growing American cities fund growth with infrastructure bonds that are paid off over time by a levy on the properties benefitting from the infrastructure. This means that infrastructure can grow whenever it is a viable business proposition rather than waiting around for Council.

Better infrastructure funding unlocks housing affordability for the longer term, so that affordability would not again become a crisis.

A fiscal council and better infrastructure financing will barely show up in the budget numbers, but could be very important for New Zealand’s fiscal future.