Last week a joint Labour/Green statement proposed a fiscal agency to keep a Labour/Green coalition government honest. Now where would they get a crazy idea like that?

Err, three years ago, The New Zealand Initiative recommended the creation of a Fiscal Council in New Zealand. It would report directly to Parliament on the sustainability of the government’s fiscal strategy given the ageing population. We had Australia’s Parliamentary Budget Office in mind.

The Labour/Green agency would also be independent of ministers. It would blow the whistle publicly if a Labour/Green fiscal policy differed from pre-pledged fiscal principles.

In a nutshell, both councils would be monitoring and transparency agencies. As such they should make it easier, politically, for governments to address future fiscal challenges and make a 'head-in-the-sand’ approach harder to get away with.

What could be wrong with that? Well, for a start the current National government has not adopted our recommendation.

Why not? Probably, it sees little need given its proven commitment to restoring fiscal surpluses. True virtue is its own witness. Establishing a superfluous agency to attest to its virtue would undermine it. To which our churlish response is that fiscal virtue is as ephemeral as the political winds and John Key’s promise to steer clear of New Zealand Superannuation was less than fiscally virtuous.

So why are Labour and the Greens on the virtuous side of this issue? After all, the last Labour government left National facing fiscal deficits for as far as the average geriatric eye could see.

That observation likely answers the question. Newly found virtue lacks credibility. Governments that can’t make credible commitments are weak governments. However, we hasten to add that this does not make it less of a virtue. A commitment to fiscal virtue is a fine thing.

So three cheers to Labour and the Greens for this initiative. May they stick to it.