Annex 1
Supplementary material on the future path of government spending and tax
This Annex sets out further material on how different areas of government spending are projected to grow if historic rates of growth resume, as those growth rates interact with changing demographic and economic variables, and also legislative settings - the "Resume Historic Cost Growth" scenario. Not all areas of government spending are projected to increase. Some are projected to decline as a percentage of GDP. This Annex also goes into more detail about the assumptions we have made about taxes, and provides further examples of how we could collect more tax.
This Annex also considers fiscal pressures in the natural resource area. Natural resources are not generally thought of as an "expense" category so are not singled out for their own line in Table 1, but they potentially have important long-term implications so are addressed as a separate section here.
The material in this section is drawn from a series of papers the Treasury produced as part of the Long-Term Fiscal project. These papers are all available on the Treasury's website, at www.treasury.govt.nz/government/longterm/fiscalposition/2013.
