An independent external panel of experts and commentators, established by the Treasury to test and challenge its analysis of the Crown's long-term finances over the next 40-50 years, will hold its third session in Wellington tomorrow.
The panel, scheduled to meet four times between late August and the end of November, is tasked with critically reviewing the research assumptions and analysis being conducted by Treasury analysts as the department prepares its next Statement on the Long-Term Fiscal Position, due in 2013.
The panel sessions are chaired by Professor Bob Buckle, Pro Vice-Chancellor and Dean of Commerce at Victoria Business School.
Designed to provide an opportunity for Panel members to question authors of research papers and to propose additional avenues for research and examination, the Panel meetings will be followed by the Affording Our Future conference to be co-hosted by the Chair in Public Finance at Victoria Business School and the Treasury on December 10-11. The Conference will aim to promote an evidence-based public debate on potential future policy options available to manage the Crown’s finances over the longer term in the face of population ageing and other challenges.
The Treasury, required under the Public Finance Act to produce a Statement at least every four years, expects that the External Panel process and Affording Our Future Conference will strengthen the quality and utility of its next Statement.
- Agenda for the October 25 session (VUW website)
Contact: Chris Ritchie 021 252 9478
Background Information on the External Panel Process
The first Panel meeting in August considered what fiscal sustainability means, why it is important, initial projections from the Treasury's Long-Term Fiscal Model and the demographic and other key assumptions that are used in the model. Treasury's initial assessment is that policy adjustments will likely be necessary in the decades ahead to ensure budget balances, and the level of public debt, remain at prudent levels over the long-term.
Discussion at the second session, held in September, focused on how the Treasury proposes to use its Living Standards Framework to assess the wider costs and benefits associated with the potential policy options future governments may consider as they address the long-term fiscal challenge.
The third and fourth panel sessions, to be held on October 25 and November 29, will focus on specific policy areas, including health, education, taxation, welfare and retirement income. These two sessions will examine how demographic change and other factors will likely impact on cost pressures over the long term, and examine the types of policy choices that will be available to governments in the decades ahead to address these pressures. Potential future policy options will be examined in the context of the Living Standards Framework, including their implications for fiscal sustainability, economic efficiency, risk and uncertainty, equity, and social infrastructure.
Long-Term Fiscal Statements do not focus on the specifics of short-to-medium term fiscal strategies. The general assumption underpinning the next Statement will be that governments over the course of this decade will work to return to surplus and reduce debt to low, sustainable levels. In moving to restore a fiscal buffer, governments will be helping to manage the initial impact of cost pressures from demographic ageing, as the starting point for taking action will start from a base where net Crown debt is at a low and prudent level.
Beyond the current fiscal strategy, detailed in the Government's 2012 Fiscal Strategy Report, the Treasury's assessment is that further policy action will be required to deal with the significant cost pressures that will arise from demographic ageing from the end of the 2020s.
- Information on the membership of the External Panel (VUW website)
- Information on the Affording Our Future Conference (VUW website)
- Information on the Treasury's Long-Term Fiscal work