Newsroom: A big idea 3 — Let citizens draw up DIY Budgets

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Max Rashbrooke is a research associate at Victoria University of Wellington’s Institute for Governance and Policy Studies, and has recently published the report Bridges Both Ways: Transforming the openness of New Zealand government. This article sets out the third of five ‘big ideas’ drawn from the report, with the rest to follow in subsequent weeks.

Number three: A citizen-generated Budget

The Budget is the Government’s most important announcement every year. Which makes it our most important announcement as a public, as a group of citizens, since government is ideally nothing more than us acting collectively under a different name.

And yet we have very little say over it. Up to a point, that’s normal: when we elect politicians, we delegate certain decisions to them. But wherever possible, we could still be looking to take back some of those decisions for ourselves, or at least make our feelings known more clearly. We are also falling behind other countries. On the international Open Budget Survey, New Zealand scores well for publishing information about the Budget, but pretty badly – just 65 out of 100 – when it comes to allowing public participation.

One innovative way to change that would be to have an annual Budget drawn up by citizens – a DIY Budget, let’s call it – that would show the Government how people want their money to be spent, and force ministers to justify their decisions against it.

It would work using the internationally-recognised practice of a citizens’ assembly, in which a group of, say, 100 ordinary people, selected to be representative of the population as a whole by age, gender and so on, would be asked to gather over a couple of weekends, with payment for their time. The assembly would be asked to draw up a rough annual Budget, indicating their spending priorities – such as whether they want to see more or less spending in broadly defined categories such as health, education and defence – and what tax increases or reductions (again, at a broad level) would be needed in consequence. The assembly members wouldn’t have to get into the nitty-gritty of every Budget line and allocation, but they would have to make high-level calls about which spending areas are most important.

Give people enough time, and expert advice, and they will amaze you with the quality of the decisions they take.

To help them work through what would still be a reasonably difficult task, they would need to have available the best expert advice from political scientists, economists and financial modellers – people who know intimately how the system works, how spending decisions would have to be traded off, and the options for raising or cutting taxes. The DIY Budget would be published at the start of each year, to inform official Budget decisions and to force the Government to justify itself when its Budget diverges from the citizens’ version.

Think this all sounds far too complex and pointy-headed for a bunch of ordinary people? In fact, citizens’ assemblies overseas have handled much more complex (and, frankly, boring) issues, such as the design of new electoral and local government systems. Just across the Tasman, a 2015 citizens’ assembly of 43 Melbourne residents and business owners drew up a clear and rigorous 10-year financial plan for the city’s council. The plan was applauded for making a series of tough calls on potential new projects, the sale or retention of public assets, and the tax take needed in consequence. In other words: give people enough time, and expert advice, and they will amaze you with the quality of the decisions they take.

Like the earlier proposal in this series for citizens-generated laws, this idea wouldn’t hand over power to citizens in an uncontrolled way. The Government would still set the actual Budget, as indeed it must, given the way that document shapes all the rest of its agenda. But it would make the desires of citizens much, much more visible and clearer than they are now, and would significantly raise the bar (and the level of public embarrassment) for ministers who wanted to do something different.

The other advantage of this proposal is that, unlike in a referendum where people can vote on an issue in isolation, these kinds of assemblies force people to do the real work of politics, which almost always involves trade-offs: more money for something means less money for something else, or tax increases. The DIY Budget would also force people to put their money where their mouth is. In surveys, people always say they would like more spending on health, education, anything you care to name, but the suspicion is they aren’t actually willing to pay the tax needed to fund those increases. A DIY Budget would settle that question.