Long-term Fiscal Statements: A Historical Review

This paper summarises the content, methodologies and conclusions of the Long-term Fiscal Statements (LTFSs) produced from 2006 to 2021. The LTFSs have focused on projected trajectories for fiscal variables such as the operating balance and net debt, together with superannuation and health expenditure. The LTFs have consistently advised that some form of policy adjustment will be required to meet the fiscal challenges arising from an ageing population and other pressures. Given the scale of the challenges, multiple policy levers, involving both taxation and expenditure, may need to be adjusted in tandem to maintain net debt at prudent levels. Policies that enhance productivity may play an important role in improving outcomes for New Zealanders, but they will not by themselves resolve the fiscal challenge faced by successive governments. New models and methodological frameworks have been developed to expand our understanding of the implications of alternative policies. Economic analysis can illustrate the possible impacts of alternative policies, but such analysis must be augmented with value judgements about intra- and inter-generational fairness to identify which policies should be implemented. These judgements are the purview of the public and their political representatives.