Managing revenues and expenses
The Government is removing fiscal stimulus measures as we move beyond COVID-19
The Government's strategy for managing expenditure is to take a balanced approach towards removing fiscal stimulus measures, while responding to the North Island weather events and ensuring the public services that New Zealanders rely on continue to be adequately funded in a high inflation environment. Budget 2023 supports this strategy as core Crown expenses, which peaked in 2021/22 due to the Government’s response to COVID-19, are expected to decline by the end of the forecast period, from 34.6 percent in 2021/22 to 31.5 percent of GDP by 2026/27. Our strategy for managing expenditure has also been supported by Budget 2023 through a comprehensive savings and reprioritisation exercise. This ensures high value for money from spending and minimises any inflationary pressures from government spending, thereby supporting the objectives of monetary policy.
Figure 11 – Core Crown expenses and core Crown revenue
Source: The Treasury
Looking to the forecast period, the Government will continue to take a balanced and careful approach to managing expenditure. Outyear Budget allowances from 2024/25 to 2026/27 are smaller than during COVID-19.