24 January 2013

MEDIA STATEMENT

Fourth Long-Term Fiscal External Panel Meeting Notes On-Line

A summary of proceedings of the fourth session of the Treasury’s Long-Term Fiscal External Panel is now available.

The first Panel session, held in August, highlighted that policy adjustments will likely be needed in the decades ahead to ensure public debt levels remain at prudent levels over the longer term. The second session in September scrutinized how the Treasury is proposing to utilise its Living Standards Framework to assess the potential policy reform options that future governments may need to adopt to meet fiscal challenges posed primarily by the ageing of the population.

Professor Bob Buckle, chair of the Panel, said the work of the first two sessions informed discussion at the subsequent sessions which had focused on specific policy areas.

“The third session looked at Crown-funded education, retirement income, and working-age welfare spending. It also examined the long-term outlook for Crown revenues. The fourth and final session for 2012 focused on health care, justice and natural resources,” he said.

Draft research papers on the topics of retirement income, tax, health, long-term care and working-age welfare discussed at the third and fourth sessions are being published on-line together with the summary of the fourth session.

“The general assumption at the Treasury is that governments over the course of this decade will work to return to surplus and reduce net debt to low levels. In doing so, governments will be helping to manage the initial impact of the cost pressures arising out of the permanent ageing structure of the population and other factors.

“Beyond the period of the Government’s Fiscal Strategy, the Treasury’s assessment is that further policy action will be required to deal with cost pressures arising from ageing and other factors.

“It is within this context that the fourth Panel session started to give consideration to the types of stylised policy options or choices that will be presented in the next Long-Term Fiscal Statement. The Treasury won’t be endorsing any particular policy response to the long-term fiscal challenge but it hopes that, by presenting styled packages of options, this will assist to highlight the types of trade-offs future governments will grapple with,” he said.

Notes

Research papers which informed External Panel monthly meetings are draft works-in-progress. Analysis may be refined, amended or strengthened in response to feedback from the Panel, and from other peer-review processes such as the Affording Our Future conference held December 10-11 2012, prior to being used in the Treasury’s next Long-Term Fiscal Statement.

The Public Finance Act requires the Treasury to publish a Statement on the Long-Term Fiscal Position before the end of October 2013.

A summary of session four is available at:
http://www.treasury.govt.nz/government/longterm/externalpanel/session4

The research papers on retirement income, tax and working-age welfare discussed at the third session are available at:
http://www.treasury.govt.nz/government/longterm/externalpanel/session3

The research papers on health and long-term care discussed at the fourth session are available at:
http://www.treasury.govt.nz/government/longterm/externalpanel/session4

The independent External Panel was established in early 2012 to test and challenge the Treasury’s initial research as it works to finalise its next Statement.

The Panel met four times between late August and late November 2012.
More information on the External Panel is available at:
http://www.victoria.ac.nz/long-term-fiscal-external-panel

Papers presented at the Affording Our Future 2012 Conference held December 10-11 2012 are available at:
http://www.victoria.ac.nz/sacl/about/cpf/events/affording-our-future-conference-2012/papers

ENDS

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