ACT leader John Banks says the Government's move to introduce a spending cap into the Public Finance Act is a victory for his party.
ACT's policy forms part of its supply and confidence agreement with the National Party.
On Wednesday, Finance Minister Bill English confirmed it will be included in this year's Budget.
The policy limits spending growth to no faster than the annual increase in the rate of population growth, multiplied by the rate of inflation.
It also requires a minister to explain to Parliament when unplanned breaches of the cap occur and what will be done to bring spending into line again.
Mr Banks says the cap is urgently needed as New Zealand is borrowing $265 million a week from the savings of other countries to pay for Crown account commitments.