6 Dec 2011

Government to legislate for cap on spending

8:58 am on 6 December 2011

The Government will introduce a legislated cap on its spending in the next parliamentary term.

The National agreed to pass the cap into law within two years in return for the support of the ACT Party.

Radio New Zealand's economics correspondent says it will mean a change in the Public Finance Act.

A formal rule would do more to convince ratings agencies that the Government is committed to keeping debt down and reduce chances of another rating downgrade.