26G Principles of responsible fiscal management

(1)

The Government must pursue its policy objectives in accordance with the following principles (the principles of responsible fiscal management):

(a)

reducing total debt to prudent levels so as to provide a buffer against factors that may impact adversely on the level of total debt in the future by ensuring that, until those levels have been achieved, total operating expenses in each financial year are less than total operating revenues in the same financial year; and

(b)

once prudent levels of total debt have been achieved, maintaining those levels by ensuring that, on average, over a reasonable period of time, total operating expenses do not exceed total operating revenues; and

(c)

achieving and maintaining levels of total net worth that provide a buffer against factors that may impact adversely on total net worth in the future; and

(d)

managing prudently the fiscal risks facing the Government; and

(e)

when formulating revenue strategy, having regard to efficiency and fairness, including the predictability and stability of tax rates; and

(f)

when formulating fiscal strategy, having regard to the interaction between fiscal policy and monetary policy; and

(g)

when formulating fiscal strategy, having regard to its likely impact on present and future generations; and

(h)

ensuring that the Crown’s resources are managed effectively and efficiently.

(2)

However, the Government may depart from the principles of responsible fiscal management if—

(a)

the departure from those principles is temporary; and

(b)

the Minister, in accordance with this Act, states—

(i)

the reasons for the departure from those principles; and

(ii)

the approach the Government intends to take to return to those principles; and

(iii)

the period of time that the Government expects to take to return to those principles.

Section 26G: inserted, on 25 January 2005, by section 7 of the Public Finance Amendment Act 2004 (2004 No 113).

Section 26G(1)(e): replaced, on 4 September 2013, by section 4 of the Public Finance (Fiscal Responsibility) Amendment Act 2013 (2013 No 67).

Section 26G(1)(f): inserted, on 4 September 2013, by section 4 of the Public Finance (Fiscal Responsibility) Amendment Act 2013 (2013 No 67).

Section 26G(1)(g): inserted, on 4 September 2013, by section 4 of the Public Finance (Fiscal Responsibility) Amendment Act 2013 (2013 No 67).

Section 26G(1)(h): inserted, on 4 September 2013, by section 4 of the Public Finance (Fiscal Responsibility) Amendment Act 2013 (2013 No 67).