An Outline of the Changes Made to Further Integrate the Annual Budget Process with the Government's Fiscal Policy Approach.
Formats and related files
Table of Contents
Table of contents
- Introduction
- New Zealand's fiscal management approach - the changes
- The wider fiscal management picture
- The changes
- Concluding remarks
- Annex 1 Evolution of the Fiscal Provisions, and issues prompting revisions
- Evolution of the Fiscal Provisions
- "Fiscal provisions" developed at a time when the government needed to establish its fiscal credibility
- Fiscal provisions provided a tangible budgeting constraint
- Issues Prompting Revisions
- Economic and fiscal pressures constantly change
- Provisions sometimes resulted on over-focus upon one aspect of fiscal policy
- Calculation and rules around managing the fiscal provisions limit
- Room for improvement
- Evolution of the Fiscal Provisions
- Annex 2 Further detail on how Budget Packages will manage wider impacts
- There is still a nominal spending amount, but it will manage a wider range of impacts
- Spending intentions not altered for some pre-specified volatilities
- A wider spending amount will involve wider management, and wider information flows
- Final qualitative assessment just a "road-check"
- Annex 3 Risks and challenges
- List of Tables
- Table 1 - comparison between the previous fiscal provisions and the revised fiscal management approach
- Table 2 - Managing the forecast new operating spending amount
- Table 3 - Managing the forecast new capital spending amount
- List of Figures
- Figure 1 - New Zealand's fiscal management approach: the context
- Figure 2 - Expense increase components 2001/02 to 2005/06
- Figure 3 - The Government's fiscal provisions 9
This paper builds on Treasury working paper 2001/24, Budget Management that Counts: Recent Developments in Budget and Fiscal Management in New Zealand (Barnes and Leith), which outlined the evolution of the New Zealand's fiscal management until 2001. 2001/24 noted the use of "fiscal provisions" as a tool for setting limits and allocating resources for budget management purposes, and (along with subsequent papers, including 2001/25) posed challenges for further development of the Government's fiscal management approach.
This paper and its annexes:
- outline the changes that have since been made to the New Zealand fiscal management approach (see Table 1 for a useful summary)
- explain how these changes fit within New Zealand's wider fiscal management framework
- provide the rationale behind these changes
- provide further detail on how the budget process will be managed
- discuss the risks and challenges with the new approach respectively.