New Zealand Fiscal Management Approach

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
• 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