Transcript Fiscal Rules - New Zealand Treasury

New Zealand’s fiscal policy
choices - the big picture
John Whitehead
13 December 2007
© The Treasury
The population will be older
12.8%
26.2%
2008
2050
Proportion of population 65 years and older
© The Treasury
0
Pop 65+ as % of pop 15-64
Japan
Spain
Italy
Korea
Germany
Sweden
Russia
France
2000
Finland
Canada
Norway
Denmark
Australia
Netherlands
Australia
New Zealand
Ireland
United
Kingdom
China
United States
Dependency ratios
80
70
2050
60
50
40
30
20
10
© The Treasury
Application of the 2006/07
surplus
Less share
retained by
SOEs/CEs
and NZS
Fund
Core
Crown
cash
2.0
NZS Fund
Contributions
1.8
Physical
Assets
(e.g. schools)
Operating
balance
8.6
+
2.9
-
3.0
=
8.5
2.0
Adjust for
non-cash
items
(e.g.
depreciation)
2.6
Advances
(e.g. student
loans, to
DHBs)
Residual
cash
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Sustainability challenge
% of GDP
160
140
120
100
80
60
40
20
0
-20
1980
1990
2000
2010
2020
2030
2040
2050
2060
Net debt including NZS Fund assets
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Net debt (inc NZS Fund assets)
% of GDP
60
50
40
30
20
10
0
-10
-20
2000
2010
2020
2030
2040
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Net debt with higher investment
% of GDP
60
50
40
30
20
Includes additional investment that boosts growth
10
0
-10
-20
2000
2010
2020
2030
2040
© The Treasury
Net debt with higher investment
% of GDP
60
50
Includes additional investment, no boost to growth
40
30
20
Includes additional investment that boosts growth
10
0
-10
-20
2000
2010
2020
2030
2040
© The Treasury