[UNCLASSIFIED]

The Treasury Publishes Statement on the Long-Term Fiscal Position

22 Nov 2016

He Tirohanga Mokopuna, the Treasury’s 2016 Statement on the Long-Term Fiscal Position, has been published today.

Secretary to the Treasury Gabriel Makhlouf says He Tirohanga Mokopuna reinforced the importance of policy advisers and decision-makers continuing to keep a focus on the medium to long-term.

“The Statement covers the next 40 years and more. It includes projections of government revenue, spending and debt, and analysis of the factors that will drive these in the decades ahead,” says Mr Makhlouf.

“Current and future governments have choices that will determine what our long-term fiscal position will be. He Tirohanga Mokopuna sets out a range of those choices that could be made to help manage the fiscal pressures we know are coming over the next few decades.

“The Treasury considers He Tirohanga Mokopuna to be a centrepiece of its stewardship role as a public sector agency. Our long-term objective is to help people live better lives, now and into the future. What the Statement shows convincingly is that economic performance, the government’s fiscal position and the well-being of New Zealanders are inextricably linked.”

Mr Makhlouf says He Tirohanga Mokopuna has been shaped by the Treasury’s Living Standards Framework, which sits at the heart of the Treasury’s policy analysis.

“Through using the Living Standards Framework we have been able to progress our thinking beyond what was covered in previous Statements. As an example, we consider whether improving social outcomes provides fiscal benefits in addition to improving living standards.”

He also stresses that it is timely to consider how to strengthen New Zealand’s long-term fiscal position.

“Significant shocks that could hit the New Zealand economy are not rare events. We have experienced natural shocks with the Canterbury earthquakes, international shocks with the global financial crisis and its ongoing repercussions, and more recently, political shocks in important trading partner countries. As a small trading nation New Zealand has to be adaptable and resilient to major disruptions both local and global.

“In particular, this reinforces the need for us to broaden and deepen our international connections so we can continue to access the flows of trade, capital, people and ideas. It also highlights the great importance of keeping on top of net debt. We have to rebuild our fiscal buffer so that government has the resources to respond to shocks we will face in the future.

“A strong long-term fiscal position is in the interests of all of us.”

He Tirohanga Mokopuna and background papers that informed the Statement are on the Treasury website: www.treasury.govt.nz/government/longterm/fiscalposition/2016

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