Politics live blog: March 18

The International Monetary Fund is pressing the Government to get its book backs into balance and has reiterated its previous calls for major tax reforms, while appearing to voice caution over tax relief planned in the Budget.

The Washington-based UN agency said in a report released on Wednesday that at about 20% of GDP, New Zealand’s net government debt was sustainable, but noted that it had risen “more rapidly than in many advanced economies”, Tom Pullar-Strecker writes in The Post.

The Government’s goal should be to return to surplus “in the four-year forecast period”, it said.

The IMF said the Government should keep this year’s Budget tight.

It made clear it believed it was important to make sure tax relief expected in the Budget was fully offset by spending cuts, to avoid any upside pressure on inflation.

The IMF again called for New Zealand to introduce a comprehensive tax on capital gains, as well as a land tax and said it should “increase the progressivity of income tax”, which means widening the gap between lower and higher tax rates.

Tax policy reforms were needed to promote investment and productivity growth and bring in additional revenue, it said.

Measures to boost the supply of housing were “urgently needed”, it said, describing housing-affordability issues as “particularly severe”.

Click here for Tom Pullar-Strecker's full report in The Post