Reform, a UK think tank, says Britain could learn from New Zealand how to deal with budget deficits.
Almost half a million public servants there could lose their jobs as the Government tries to rein in a huge deficit.
Reform chief economist Patrick Nolan says the situation is similar to New Zealand in the early 1990s.
He says it is important that governments do not overspend when back in surplus.
And Dr Nolan says there is a need for consistency with no ring-fencing of expenditure.