Government Addresses "Fiscal Cliffs" to Improve Financial Stability
Thursday 21 December 2023, 2:40AM
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In the wake of the previous government's unsustainable fiscal path, the new administration in New Zealand is seeking to identify and address a wide range of financial risks, known as "fiscal cliffs."
These are instances where the funding for programs or policies has been limited to short periods, despite public expectations of ongoing funding, thus creating significant challenges for the new government.
Specifically, these fiscal cliffs include:
- Ka Ora, Ka Ako | Healthy School Lunches Programme
- Pharmac - Combined Pharmaceutical Budget
- Pharmac - COVID-19 therapeutics and vaccinations
- International Climate Financing Funding
- Tertiary Tuition and Training Funding Baseline Pressure
- New Zealand Screen Production Rebate (International)
- New Zealand Screen Production Rebate (Domestic)
- Cyber Security Programmes
- Kāinga Ora Operating Funding
- Apprenticeship Boost
- Geohazards Science Services, Data and Modelling
- Kānoa Operating Funding
- Oranga Tamariki Disability Support Services
- Teacher Supply Initiatives
- North Island Weather Events Road Response and Recovery
- Transitional Housing Motels
- Civil Aviation Authority Liquidity Funding
- Equitable Digital Access
- Temporary Accommodation Services
- Historic Claims of Abuse in Care
- Te Matatini - Funding to Stimulate the Sustainable Growth of Kapa Haka
To address these challenges, the government has asked ministers to identify capital projects that are at risk of cost overruns, delay, or failure, and is working to identify other fiscal cliffs in order to make careful choices about future funding.
To improve transparency and accountability, the government has instructed the Treasury to improve the transparency of fiscal risks in future economic and fiscal updates, including through greater quantification of risks and more useful risk grouping.
Furthermore, the Treasury has been directed to work to entrench these improvements into the Public Finance Act and supporting rules in order to strengthen fiscal responsibility and discipline.