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Long-term Fiscal Model

Page updated 11 Jul 2013

The Long-Term Fiscal Model (LTFM) is an Excel spreadsheet-based model, created by the New Zealand Treasury. Its primary purpose is to produce the 40-year projections of economic and fiscal variables, such as nominal GDP and core Crown net debt, used in the Long-Term Fiscal Statements.

The latest version of the LTFM is the model produced for the 2013 Long-term Fiscal Statement, Affording Our Future: Statement of the Long-term Fiscal Position.

The main inputs it uses are:

  • 2013 Budget Economic & Fiscal Update (BEFU) fiscal forecasts, covering the June-end years 2012/13 to 2016/17
  • 2013 BEFU macroeconomic forecasts, 2012/13 to 2016/17, and
  • 2011-base June-end year demographic projections from Statistics New Zealand, to 2059/60.

The modelling approach and assumptions used in Affording Our Future are outlined in the Long-Term Fiscal Background Papers:

The published model covers the two main scenarios of Affording Our Future, namely 'Resume Historic Cost Growth' and 'Spending path that maintains 20% net debt'. There are considerably more scenarios than just these two in the 2013 Statement. However, in general, these other scenarios are variations on one of these two main options, often with just a single, or a small number, of fiscal, economic and/or demographic parameters altered.

The one key difference in how the 'Resume Historic Cost Growth' and 'Spending path that maintains 20% net debt' scenarios are modelled is in the assumed annual growth rates of non-demographic demand for each major expense type ie, real per capita demand drivers.

The way to model different scenarios is by changing the assumptions for post-forecast, projected year (2017/18 and beyond) variables in the Scenarios worksheet.

Download the Model

This model is a special purpose document and cannot be provided in HTML format or CSV format. The model is a very large file and is best downloaded (saved) to your computer for use rather than opened in your browser. Using MS Excel Files

Previous models:

  • Long-term Fiscal Model for the Long-term Fiscal Statement 2009 ltfm-ltfs09.xls (2.7 MB)
  • Long-term Fiscal Model for the Long-term Fiscal Position 2006 ltfm-ltfp06-v2.xls (10.7 MB)
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