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Future developments

Fiscal sustainability supports economic growth by increasing resilience and predictability of economic conditions. Key to achieving fiscal sustainability is lowering net core Crown debt to prudent levels to rebuild the fiscal buffer.

Once this is achieved there may be a case for further strengthening of the balance sheet by funding other non-debt liabilities or increasing general purpose reserves. These investments would help match future Crown liabilities to smooth taxes in the future.

Choices around how quickly to lower debt and improve the balance sheet more generally should reflect the state of the economy, with greater saving during economic upturns. This would contribute to macroeconomic stability and help with economic growth objectives.

Areas of focus

  • Investigate whether improvements could be made to the Crown’s current arrangements for contingency funds and reserves.
  • Continue the focus on strengthening the Crown’s balance sheet buffers in a timely way to further improve resilience.
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