Guide to New Zealand Budgeting Practices
The Government's fiscal strategy
The Government's fiscal strategy is its plan for managing its finances, which include expenses, revenue and the portfolio of assets and liabilities on the Crown balance sheet. New Zealand governments frequently express their fiscal strategies using goals for public net debt and the gap between expenses and revenue (that is, whether the annual Budget is in surplus or deficit). The Public Finance Act 1989 (PFA) requires the Government to produce a fiscal strategy every year to support transparency.
The Government discloses its fiscal strategy through its short-term intentions and long-term objectives as set out in the Budget Policy Statement (BPS), released ahead of the Budget, and in the Fiscal Strategy Report (FSR), released alongside the Budget.
The Fiscal Management Approach (FMA) can support the Government to achieve these objectives by helping to manage expense, revenue and capital investment decisions and by providing the information needed for the Government to make informed decisions.