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The Requirements for Long-Run Fiscal Sustainability

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  • Robert A Buckle
  • Amy A Cruickshank

    ()
    (The Treasury)

Abstract

New Zealand, like many other countries, is experiencing a changing demographic profile from one dominated by young people during the 20th century to one where the population is more evenly distributed across age groups. This has implications for the economy and society, including the government's fiscal position in the future and for the sustainability of its spending programmes. This paper discusses the link between the government budget constraint and fiscal sustainability, how fiscal sustainability can be measured and why it’s important. We also examine the Treasury’s current approach to modelling the extent of fiscal adjustment required and options available to achieve this adjustment. The paper proposes criteria to evaluate potential policy changes to address these long-term fiscal challenges and suggests areas where further work could be worthwhile.

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File URL: http://www.treasury.govt.nz/publications/research-policy/wp/2013/13-20/twp13-20.pdf
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Bibliographic Info

Paper provided by New Zealand Treasury in its series Treasury Working Paper Series with number 13/20.

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Length: 53
Date of creation: Jul 2013
Date of revision:
Handle: RePEc:nzt:nztwps:13/20

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Postal: New Zealand Treasury, PO Box 3724, Wellington, New Zealand
Phone: +64-4-472 2733
Fax: +64-4-473 0982
Web page: http://www.treasury.govt.nz
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Related research

Keywords: Long-run fiscal sustainability; fiscal consolidation; public debt; public social expenditure; taxation;

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References

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