The Fiscal Strategy Model (FSM) projects the financial performance and the financial position of the government over a medium-term horizon and is published with the latest Economic and Fiscal Update.
Fiscal Strategy Model Projections
The principal purpose of the FSM is to produce the post-forecast fiscal projections.
The next version of the FSM will be published alongside the Budget Policy Statement in February 2021.
The most recent version of the FSM was published with the PREFU 2020 on 16 September 2020.
Other Treasury Models
The Long-Term Fiscal Model
Treasury produces another model that projects fiscal and economic variables beyond the forecasts.
The LTFM differs from the FSM in that:
- modelling for the LTFM extends at least as far as the year ending June 2060
- the LTFM's projections are not intended to assess the Government's fiscal strategy
- in regard to the last point, the LTFM projects individual operating and capital expenditure classes with their own particular cost drivers, such as changes in the recipient population and expense growth factors based on historical averages, rather than restricting their growth to a share of projected operating or capital allowances, and
- the LTFM has more modelling capability so that it can, for example, produce scenarios where debt is constrained and some other fiscal variable, such as expenditure or tax revenue, becomes the balancing output.
New Zealand Superannuation (NZS) Fund Contribution Rate Model
The projected required contributions track from the Treasury's New Zealand Superannuation (NZS) Fund Contribution Rate Model is an input into the LTFM and the FSM.