COM 0500.001 1996-1998 - Laserfiche WebLink

Home

J.K. ~lciay Limited: C4anSu'!; yin Economy by Chang~.ng ,ts Public Sector Piggy y r • The Government's budget shows a genuine fiscal surplus which enabled it to announce a programme of tax reductions, debt reduction while also increasing spending on health, education, welfare and family assistance. • Government spending as a percentage of GDP has been reduced; with further reductions projected. • In 1994, Parliament passed the Fiscal Responsibility Act, a unique partner to the earlier Reserve Bank and Public Finance Acts. This requires the Government to manage fiscal policy prudently, to reduce debt and spend wisely. Lest those sound like pious principles incapable of statutory enforcement, the Act imposes strong requirements for disclosure of economic information, twice a year and once more before any general election. There will no longer be any need for a ceremonial (and often disturbing) "opening of the books" after an election! • New Zealand has also introducedll national accounts drawn up on a GAAP principles, the first and only country so to do. Statements of government liabilities and assets are required to be published regularly. The most recent accounts show that, after a decade of reform, the New Zealand Government has achieved a positive net worth. This is a very important milestone. Previously, we simply did not know what assets and -more importantly -what liabilities were held in the taxpayer's name, especially in government corporations. Now, we do know; and have dealt with the long-standing shortfall. Impact of changes The impact of these sweeping changes has been profound. They have transformed the New Zealand economy, its society and its way of life. In many respects, the reforms have given New Zealanders a new confidence about their ability to meet the challenges of the future. Authoritative commentators have spoken of a "transformation" of New Zealand society. The reforms have touched almost every sector of the economy. There have been few sanctuaries. Everyone has been affected. The productivity and competitiveness of new Zealand's industries and services, in the public service in particular, have improved remarkably. International attention The reforms have attracted international attention. A constant stream of visitors from Europe, the Americas and Asia have visited New Zealand to study the changes and to speculate how their countries might do likewisel2. Public Finance Act 1989. Five delegations visited from Japan in the second half of 1995, including one from the Diet.