From Dow:
New Zealand’s government said it would post a modest surplus in the year ending June as it gave details of its latest budget Thursday.
The center-right National-led government is forecasting a NZ$668 million surplus for the year ending June 2016, compared with a surplus of NZ$414 million the previous year. The government said its books will remain broadly in balance the following year, forecasting a surplus of NZ$719 million.
Finance Minister Bill English said the outlook for New Zealand’s economy is positive. “Businesses are investing
, job growth is solid and wages are rising faster than inflation.”
While the government’s books are in the black, Mr. English said a tight rein on spending is still needed as the focus shifts to repaying debt. The Treasury is forecasting net core Crown debt of NZ$62.3 billion for the year ending June 2016, saying it will peak at NZ$68.3 billion in the year ending June 2018.
“Reducing debt to prudent levels will give the government more room to support New Zealanders, and the economy, should we face another economic shock or natural disaster,” Mr. English said. He said the government is committed to reducing debt to around 20% of GDP by 2020.
As a percentage of GDP, the Treasury is forecasting that net core Crown debt will peak at 25.6% of GDP in 2016/2017 and fall to 20.8% of GDP by 2019/2020.
The Treasury is also forecasting real GDP growth of around 2.9% over the coming year and 2.8% growth on average over the five years to June 2020. Mr. English said New Zealand’s unemployment rate is expected to drop to 4.6% over that period.
And from Bloomie:
New Zealand’s government has left the door open to dangling tax cuts at next year’s election after projecting larger and growing surpluses in its latest budget.
…“Rising surpluses show that there are more choices,” English said as he briefed reporters ahead of his eighth budget. “We made the decision in this budget there wasn’t room for tax cuts. Those are decisions for the future.”
Advanced macroprudential, a tumbling currency, a budget surplus and tax cuts, solid and consistent government, bipartisan support in tackling housing affordability, all amid a terms of trade crash.
We need a reverse takeover of our entire political economy.
