New Public Finance Amendment Act Enhances Fiscal Transparency in NZ

Legislation preventing future governments from concealing the extent of fiscal risks in government accounts passed through its final stages in Parliament today.

Finance Minister Nicola Willis says the Public Finance Amendment Act requires economic and fiscal updates prepared by the Treasury to include a statement of specific fiscal risks.

When I became Finance Minister, I discovered several risks were not clear in those statements. An example was the time-limited funding for Pharmac medicines on which thousands of New Zealanders rely.

While the Treasury has now categorised and described those fiscal risks – which includes identifying time-limited funding and capital cost escalations – this law change makes that categorisation a requirement.

The Act also removes the need for Treasury to report on ‘wellbeing’.

Building a strong economy and delivering better public services advances the country’s wellbeing. Therefore, the Treasury needs to focus on its core purpose – economic and fiscal advice – not hazy feel-good ideas that sound nice, but don’t deliver better outcomes for New Zealanders.

The Act also brings the date for the delivery of the Pre-Election Economic and Fiscal Update (PREFU) forward by five working days.

The PREFU helps to ensure voters can make informed choices at the election. Bringing the date forward gives them more time to weigh up the choices available to them, Nicola Willis says.

The PREFU forecasts the economic outlook for New Zealand, and the government’s fiscal outlook.

The Act will be in force by July 1 2026.