Fiscal Strategy Model Projections

The principal purpose of the FSM is to produce the post-forecast fiscal projections.

The Budget Economic and Fiscal Update (BEFU) 2025 updated version of the FSM is published here and on the Treasury's website.

Also downloadable from the section below is a note Budget Economic and Fiscal Update 2025 Projections. This provides further information about the post-forecast projections, including detailing some of the key assumptions and providing data tables for both economic and fiscal variable projections.

Notes for this version of the Fiscal Strategy Model

Scenarios for different amounts in forecast years of some welfare transfer expenses, tax revenue categories, operating allowances and capital allowances, and different New Zealand Superannuation Fund tracks, can be run using the Fiscal Forecast Adjuster and NZS Fund Adjuster worksheets of the FSM. The output of these scenarios can be modelled in the Option worksheet. This is appropriate to use for modelling scenarios that control expenditure growth in projected years with operating allowances, but not for changing operating allowance amounts in scenarios applying bottom-up expenditure growth in projected years, such as those of Scenarios 3 and 4 in this Budget 2025 Fiscal Strategy Model. This is because such scenarios require allocating the operating allowances over the forecast years via the Allocate worksheet and this is set up to reflect the operating allowances in the main fiscal forecasts, and not ones adjusted by the Fiscal Forecast Adjuster.

Other Treasury Models

The Long-Term Fiscal Model

Treasury produces another model that projects fiscal and economic variables beyond the forecasts. It is called the Long-Term Fiscal Model (LTFM) .

The LTFM differs from the FSM in that:

• modelling for the LTFM extends at least as far as the year ending June 2061
• the LTFM’s projections are not intended to represent the Government's fiscal strategy
• in regard to the last point, the LTFM projects individual operating and capital expenditure classes with their own particular cost drivers, such as changes in the recipient population and expense growth factors based on historical averages, rather than restricting their growth to a share of projected operating or capital allowances and
• the LTFM has more modelling capability so that it can, for example, produce scenarios where the projected growth of individual expense categories, such as health or education, can be altered.

New Zealand Superannuation (NZS) Fund Contribution Rate Model

The projected required contributions track from the Treasury's New Zealand Superannuation (NZS) Fund Contribution Rate Model is an input into the LTFM and the FSM.