New Zealand’s fiscal and economic settings need to be fine-tuned and debated sooner rather than later to avoid leaving future generations of New Zealanders with unsustainable challenges.
Treasury’s Long-term Fiscal Position and Long-term Insights Briefing, He Tirohanga Mokopuna 2021, highlights a need for New Zealand to make changes soon to our fiscal and economic settings to support the next generation of Kiwis, says Infometrics Principal Economist Brad Olsen. “New Zealand faces several challenging conversations about which services we fund for society and how they are funded. As Treasury’s analysis shows, the longer we bury our heads in the sand, the harder the decisions will be that we eventually have to make.”
“Without making any changes to our current settings, New Zealand is just kicking the can down the road on everything from healthcare to social support, climate change, and economic resilience. As a young person, it’s important that young New Zealanders inherit a sustainable and effective system, rather than being burdened with a variety of challenges that have been left as-is for too long.”
COVID-19 has shown the importance of building resilience into our economic system, and this focus will be important going forward. New options and debate around how to respond to shocks will provide New Zealand with a better ability to cope with, and react to, substantial changes in the future.
“Ideas like the wage subsidy show our evolution from reactive policy to more proactive policy, and we need to consider similar approaches to healthcare and other issues like housing. Focusing on the cause of challenges, not just the symptoms, will also be important for how we respond and design our approaches to major problems into the future,” says Mr Olsen.
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