Party co-leader Chlöe Swarbrick says 40 years of bad fiscal programming have produced "devastating real-world results". Photo: RNZ / Samuel Rillstone
The Greens have made a case for more public investment, as they releases the party's fiscal strategy on Tuesday, saying the Finance Minister's "fiscal straight-jacket is junk".
Green Party co-leader Chlöe Swarbrick said the current government was "fixated on self-made constraints, while the real world crumbles around us".
Following the release of its Green Budget last month, which was ridiculed by the coalition, the party has released a discussion document outlining its case for a "transformed approach" to fiscal management it says would prioritise "real fiscal sustainability".
The co-leaders' foreword in the report said "if balancing the books can only be achieved by reducing our real economic capacity, then the books need to be rewritten".
Swarbrick said the party's fiscal strategy unpicked the daft 'computer says no' argument standing in the way of this critical investment.
"We show how 40 years of bad fiscal programming have produced devastating real-world results, as our hospitals, schools and infrastructure fall apart."
The document "demands recognition" that both excessive debt and insufficient investment are "equally unsustainable". It also said a "neoliberal logic" was embedded throughout New Zealand's fiscal management framework.
"However, the neoliberal prescription of privatisation, public-private partnerships and market liberalisation isn't just outdated - it's actively harming our ability to meet long-term needs."
It referenced the fiscal responsibility rules introduced in the 1980s as serving a legitimate purpose then, where constraints on borrowing and spending were an "urgent necessity", because the government had come close to defaulting on its debts.
"However, our emergency response to that debt crisis has become permanent policy and, for over 40 years, our fiscal culture has focused solely on the prevention of one type of crisis, while systematically creating others through chronic underinvestment."
The strategy document said political leaders called for ever-tighter fiscal restraint, and reminded voters of "rainy days" to come and the vulnerability of New Zealand's small open economy to natural disasters.
"However, investment to mitigate these vulnerabilities is only ever seen as a cost, while the vulnerabilities created by weakened public services are made to appear inevitable, rather than as political decisions."
The party argued public investment could enhance economic development, productivity and resilience, that would then improve, rather than undermine the country's long-term fiscal sustainability.
It also said the costs of underinvestment in things like infrastructure, climate resilience and human capital posed risks "as significant" as excessive debt.
"Both debt in excess of our real economic capacity to deliver investment and chronic underinvestment are failures of fiscal responsibility," the report said.
It said real economic constraints should guide investment decisions, rather than financial targets "divorced from their economic implications".
Responsible increases in public debt should be supported by "funding strategies", the paper went on, that "strengthen domestic financial institutions to hold that debt".
"We need to ensure that productive borrowing serves Aotearoa New Zealand's development, while maintaining greater economic sovereignty."
It argued this framework would enable the country to build enduring resilience to growing economic and environmental shocks, and create truly sustainable prosperity.
The party believed the current accounting-driven approach failed to acknowledge public investment in human, social and natural capital.
Swarbrick welcomed criticism, saying "let the government's latest round of name-calling ensue", but said the Greens were providing the most "comprehensive, real-world, evidence-based economic policy" of any party in parliament.
"They constitute the only serious plan to actually improve our economic and climate resilience, and create tens of thousands of good green jobs."
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