The Organisation for Economic Co-operation and Development (OECD) has released a report on New Zealand, urging the government to tighten its belt on spending.

Finance Minister Nicola Willis welcomed the report, saying it aligns with the government's ongoing fiscal sustainability program.

The OECD, a group of developed nations, conducts regular reviews of its members' economic policies. 

Their latest report on New Zealand highlights "spending overruns" following the pandemic, which they say have led to a permanent increase in government spending relative to the nation's economic output. 

The report also suggests the government's stimulus measures may have contributed more to inflation than those of other countries.

In response, the OECD recommends that the government establish spending limits and tax policies that will gradually reduce the budget deficit and achieve a balanced budget.

"This affirms the Government's decision to steadily bring government spending under control," said Minister Willis. 

She emphasised the government's commitment to its fiscal sustainability program, which aims to achieve responsible spending levels.

While the report focuses primarily on spending control, the OECD also identified other areas for improvement. 

These include stricter enforcement of competition policies, easing restrictions on overseas investment, and boosting educational achievement through a more detailed national curriculum. 

The report additionally calls for further reform of the resource management planning system.

"The Government is already acting on many of the initiatives proposed by the OECD and we will give consideration to its other recommendations," stated Minister Willis. 

She acknowledged that while the government may not agree with every aspect of the report, they value the OECD's expertise and appreciate the opportunity to have their economic policies evaluated.

Looking ahead, Minister Willis emphasized the urgency of rebuilding the New Zealand economy after a period of high spending, inflation, and interest rates. She expressed confidence in the government's plan to deliver better value for public spending, improve educational outcomes, and create a more favourable environment for business investment and growth. Minister Willis concluded by stating that the government's economic policies aim to provide New Zealanders with the cost-of-living relief, higher incomes, and improved public services they deserve.