Dr Oliver Hartwich: Treasury returns to economic rigour

“First and foremost, there is the need to maintain fiscal space for fiscal policy to play a shock-absorber role. That means paying our debt down during normal economic times.”

With these words, Treasury Secretary Iain Rennie signalled a welcome return to sound economic principles in his speech launching the draft Te Ara Mokopuna 2025, the Treasury’s Long-term Insights Briefing on how to manage government finances sustainably.