Treasury's 2013 long-term fiscal statement: Assumptions and projections

<italic>Affording Our Future</italic>, the New Zealand Treasury's 2013 long-term fiscal statement, tests fiscal sustainability over the next 40 or so years through a series of projections. These projections endeavour to capture the effect of population ageing and other influences on the future government budget balances and public debt. This paper explains the modelling approaches, major assumptions, and sensitivities around the assumptions. It provides results for two scenarios: 'Resume Historic Cost Growth' and 'Spending Path that Maintains 20% Net Debt'. The paper also discusses the costs of delay in addressing the fiscal pressures produced by an ageing population structure.