The New Zealand Treasury's latest forecasts and the Government's Budget Policy Statement (BPS) are disquieting. Public debt management looks lax and possibly illegal, government spending entrenches excess rather than tackles it, and productivity growth measures are welcome but piecemeal.

The BPS’s approach to managing public debt appears to fall short of legal requirements. The Public Finance Act sets the rules for how Governments manage public money. One section requires each Government to do two crucial things: determine what a "prudent" level of public debt should be and set out a clear timeline for achieving it.

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