State of the State
New Zealand 2016
The government’s books are in relatively good shape. But our ageing population will put Crown finances under significant pressure. Social investment may prove valuable in managing this pressure while supporting better outcomes for Kiwis.
Most governments in the developed world would welcome a set of accounts like those of New Zealand. Despite imposing austerity measures, many other OECD governments are burdened with significant debt, yet are nowhere near returning to a scenario where their revenue exceeds their expenses. As a consequence, many government balance sheets are loaded with rising debt and high debt servicing costs.
In contrast, the New Zealand government’s books are in good shape for now. The post-global financial crisis (GFC) target of returning to operating surplus was achieved in June 2015, the first surplus in seven years.