1. INTRODUCTION

1.1 This submission on the Public Finance Amendment Bill is made by The New Zealand Initiative (the Initiative), a Wellington-based think tank supported primarily by major New Zealand businesses. In combination, our members employ more than 150,000 people.

1.2 The Initiative undertakes research that contributes to the development of sound public policies in New Zealand, and we advocate for the creation of a competitive, open and dynamic economy and a free, prosperous, fair and cohesive society.

1.3 The Initiative’s members span the breadth of the New Zealand economy; a well-functioning and transparent fiscal management framework is essential for economic confidence and sustainable growth. The views expressed in this submission are those of the authors rather than the New Zealand Initiative’s members.

1.4 This Bill has been introduced to support fiscal transparency, strengthen fiscal responsibility, and improve the practical operation of the Public Finance Act 1989. The Initiative strongly supports this direction.

1.5 New Zealand’s fiscal management framework was once regarded as world-leading, providing clear rules, transparent reporting, and strong accountability mechanisms. However, the framework has been weakened in recent years by the introduction of subjective measures and the dilution of Treasury’s core focus on economic and fiscal analysis. Meanwhile, as discussed in paragraph 7.4 below, most developed economies now have independent fiscal institutions, whereas New Zealand does not.

1.6 This Bill represents a necessary course correction, returning New Zealand’s fiscal management to evidence-based principles while enhancing transparency in areas where it has been lacking.