Burning the buffer: New Zealand's budgetary response to COVID-19

Ian Ball

Journal of Public Budgeting, Accounting & Financial Management, 2020, vol. 33, issue 1, 95-105

Abstract: Purpose - The New Zealand Government has progressively strengthened its balance sheet position since the mid-1990s, other than for the four years immediately following the global financial crisis and the Canterbury earthquakes. This paper describes the nature and the forecast and actual fiscal impacts of the COVID-19 response, and identifies the transparency mechanisms which reveal these impacts. It also expresses a viewpoint on the implications of the COVID-19 response for the future resilience of the Government's fiscal position. Design/methodology/approach - The paper draws on the suite of official budgetary documents to demonstrate both the transparency of the disclosures on the COVID-19 impact and the substance of the forecast and actual fiscal impacts. Findings - The paper reveals the change in the long-term fiscal aspirations of the New Zealand Government from one of achieving and maintaining a significant net worth buffer, to one which accommodates in the long-term a markedly smaller buffer and lower level of net worth. Originality/value - The public financial management system in New Zealand is notable for its transparency. The Government's response to the pandemic is used to illustrate the nature and extent of that transparency.

Keywords: New Zealand; Net worth; Buffer; Public financial management; Fiscal position; Public finance act; COVID-19 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jpbafm:jpbafm-09-2020-0162

DOI: 10.1108/JPBAFM-09-2020-0162

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