Reference: 20250020
24 February 2025
Adam Irish
[FYI request #29762 email]
Dear Adam
Thank you for your Official Information Act request, received on 16 January 2025. You
requested the following:
any advice provided by the Treasury to the Minister of Finance regarding the
economic implications of recent or planned budget cuts, with particular focus on
the following:
1. Impact on Aggregate Demand: How budget cuts may influence overall demand
within the economy.
2. Potential Downward Spirals in GDP: Any analysis or projections related to the
risk of negative GDP growth due to such cuts.
3. Shocks to Consumer and Business Confidence: The expected effects of these
cuts on consumer spending and business investment.
4. Historical and Current Macroeconomic Data: Relevant data and trends from
the past and present to support these analyses.
5. International Studies on Austerity: Any international studies or evidence that
the Treasury has used to assess the economic impacts of austerity measures,
including relevant comparisons with New Zealand's situation.
6. Advice on Spending Cuts During a Private Sector Recession: Whether the
Treasury has provided advice on the impacts of implementing spending cuts
while the private sector is in recession, particularly regarding potential effects on
unemployment levels.
Additionally, I would like to know whether the Treasury continues to provide free
and frank advice to the Minister of Finance, as required by its role, or if such
advice has been influenced or constrained by ministerial preferences or other
political considerations.
On 30 January 2025, you refined the date range of the request to between November
2023 (formation of the current government) and May 2024 (release of Budget 2024).
1 The Terrace
PO Box 3724
Wellington 6140
New Zealand
tel. +64-4-472-2733
https://treasury.govt.nz
Information publicly available
The information you have requested is all covered by the Budget 2024 proactive
release. Several documents relevant to your request are detailed below (please note
that this is not an exhaustive list):
Item
Date
Document description
Treasury Report T2024/475: Fiscal
4 March
Discusses the macroeconomic impacts of
strategy for Budget 2024 – Surplus
2024
tightening fiscal policy in an economic
target and operating allowances - 4
downturn.
March 2024
Aide Memoire T2024/1152:
26 April
Provides information on the Government’s
Information on the fiscal impulse in
2024
expected impact on aggregate demand, based
2024/25 - 26 April 2024
on the preliminary Budget 2024 fiscal
forecasts.
Aide Memoire T2024/1149: Further
6 May
Provides information on the expected
information on the macroeconomic
2024
economic impacts of a reduction in
impacts of the personal income tax
government consumption alongside a
package - 6 May 2024
reduction in personal income taxes.
Aide Memoire T2024/1289:
13 May
Provides information on the Government’s
Information on the final Budget
2024
expected impact on aggregate demand, based
Economic and Fiscal Update 2024
on the final Budget 2024 fiscal forecasts.
fiscal impulse
Other documents relevant to your request can be found here:
Budget 2024 Information
Release - 12 September 2024.
Accordingly, I have refused your request under section 18(d) of the OIA as the
information requested is or will soon be publicly available.
In addition to the Minister of Finance, Treasury also provides advice to several other
ministers. Treasury continues to provide free and frank advice that focuses on
ministers’ objectives, while also being honest, politically neutral, constructive, and free
from undue influence.
Please note that this letter (with your personal details removed) may be published on
the Treasury website.
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This reply addresses the information you requested. Under section 28(3) of the Act,
you have the right to ask the Ombudsman to review any decisions made under this
request.
The
Ombudsman
may
be
contacted
by
email
at:
[email address] or by calling 0800 802 602.
Yours sincerely
Phoebe Sparrow
Team Leader, Macroeconomic and Fiscal Policy
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