The Government books are on track to deliver the promised
surplus in 2014-15 but at $86 million, still a very small one
despite improvements in the economy.
Finance Minister Bill English, speaking at the half-yearly
update of Budget forecasts today, described it as a
"paper-thin" surplus and said it would still be a challenge.
The May Budget forecast a surplus of $75 million, so the
improvement is only $11m better.
But with growth forecasts set to peak at 3.6 per cent in the
March 2015 year, the surpluses will grow in the following
years to $1.7 billion, $3.1b and then $5.6b.
Mr English said there was still a lot of work to do to make
the forecasts a reality, and the Government was this year
still borrowing a net $78m every week.
In dollar terms, net debt would peak at $64.5b in 2015-16.
Treasury Secretary Gabriel Makhlouf said there were still
risks to the forecasts including the size of the Christchurch
rebuild, net migration, terms of trade, the exchange rate,
household savings behaviour, and potential global market
According to the Household Labour Force Survey, 125,000 more
jobs will be created between the September 2013 quarter and
Mr English told reporters that New Zealand had a habit of
making some progress, being energised by things like
recessions and restructurings "and then as soon as there are
some signs of progress in the past we've just put our feet up
and decided that's good."
"Our approach is to be less drastic in policy change, more
moderate but more persistent.
- Growth stronger in 2013 than expected
- Growth expected to rise to 3.6 per cent in March 2015 year.
- Unemployment forecast to fall from 6.2 per cent to 5.8 in
March 2014 year.
- Net core crown debt to peak at 26.5 per cent of gdp in
- Net debt forecast to fall to 16.9 per cent in 2019-20