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Budget 2017 Home Page Fiscal Strategy Report - Budget 2017

Managing the Crown's Revenue and Expenses

The Government's success in delivering results for New Zealanders whilst also achieving its fiscal targets depends on the continued ability to manage Crown revenue and expenses.

Expenditure control is key to achieving the Government's fiscal objectives. The policy of fixed nominal baselines means that the amount of funding an agency receives each year does not automatically increase to adjust for inflation. Instead, a specific policy decision is required to increase most expenditure items.

The Government is committed to keeping a tight rein on expenditure, and targeting spending to where it has the largest impact for New Zealanders. This approach has helped move the finances back to surplus, giving the Government flexibility to make the investments that support the infrastructure and public services needed by a growing country.

The Government will continue to increase investment in core social services as New Zealand's population grows. However, it also expects to see ongoing improvements in productivity in the provision of public services, particularly as a result of big investments in digital technology and other infrastructure.

The Government is increasingly taking a long-term view to improving outcomes for New Zealanders, both fiscal and social, in an approach which is known as social investment. Social investment at its most simple is about investing earlier, and more effectively, in the lives of those who may otherwise be on track to experience poor outcomes so they achieve better longer-term outcomes and at a lower total cost.

The Government supports a broad-base, low-rate tax system that responds to New Zealand's medium-term needs in a planned and coherent way, minimises economic distortions, rewards effort, has low compliance and administrative costs and minimises opportunities for tax avoidance and evasion.

As fiscal conditions allow, the Government intends to continue to adjust tax and transfer settings to improve family incomes and simplify the income tax and transfer system, with a particular focus on low and middle income earners.

Details on the Government's revenue strategy can be found at

The current tax policy work programme focuses on three areas:

  • enhancements to tax policy within the Government's broad-base, low-rate tax framework
  • using Inland Revenue's business transformation programme to modernise and simplify tax policy and tax administration settings, and
  • dealing with issues relating to international tax and base erosion and profit shifting.
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