The role and importance of long-term fiscal planning

Abstract

Many countries now require the regular publication of longterm fiscal projections, looking at the potential long-term costs of government spending programmes (see Anderson and Sheppard, 2009). In New Zealand, section 26N of the Public Finance Act 1989 (as amended in 2004) requires the Treasury to publish a Statement on the Long-Term Fiscal Position at least every four years. Under the act, such statements must look out at least 40 years. Their contents are the responsibility of the secretary to the Treasury (rather than the minister of finance), and the Treasury is required to use ‘its best professional judgments’ in assessing the fiscal outlook and potential risks.