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An Introduction to New Zealand's Fiscal Policy Framework

History and amendments

Fiscal responsibility provisions have been part of New Zealand law since 1994. Initially they were a stand-alone piece of legislation: the Fiscal Responsibility Act. However, this Act included fewer principles of responsible fiscal management than today's legislation. Those that it included were primarily focused on fiscal sustainability.

In 2004, the Fiscal Responsibility Act was incorporated into the Public Finance Act as Part 2. At the same time, the requirement for the Treasury to produce a four-yearly Statement on the Long-Term Fiscal Position was introduced.

In 2013, Part 2 of the Public Finance Act was substantively amended. Three new principles of responsible fiscal management were introduced. These additions broadened the definition of good fiscal policy from a predominant focus on sustainability to also emphasise the importance of economic stability and fiscal structure.

The amendments also introduced the requirement for the Treasury to produce a four-yearly investment statement.

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