Wellbeing Budget 2021

Our Recovery

Managing revenues and expenses

The Government is investing in the near term to secure the recovery with the need for fiscal stimulus reducing over time

The fiscal strategy takes a balanced approach to managing core Crown expenses, which are expected to decline as a share of GDP over the forecast period from 33.1 percent in 2020/21 to 29.2 percent of GDP by 2024/25 (Figure 16). The elevated level of Government spending in the economy highlights the role that fiscal policy has played in cushioning the blow of the economic shock associated with COVID-19 and supporting employment. The gradual reduction in core Crown expenses over the forecast period reflects that the majority of COVID-19 fiscal support will be gradually withdrawn.

Figure 16 – Core Crown expenses

Source: The Treasury

The Government is taking a balanced and careful approach to expenses. Future Budget allowances are smaller than during COVID-19. This means a continued focus on value-for-money investments that support the Government's priority areas outlined in the Speech from the Throne, while maintaining essential services, like healthcare and education.

The Wellbeing Approach provides a strong value-for-money framework that is supporting investment decisions by helping the Government target spending to areas it is needed most (see Wellbeing Outlook Chapter).

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