The Treasury's pre-election fiscal update turned into a
slanging match between politicians yesterday as Finance
Minister Bill English defended his economic strategy.
After the Treasury released its update, Mr English said New
Zealand was on track to a budget surplus this year, backed by
good growth, more jobs and higher incomes under the
Government's economic programme.
• Credentials intact -
''The pre-election update confirms New Zealanders have the
opportunity to build on their hard-won gains of recent years
- provided we stick with the Government's successful
''Now is certainly not the time to put New Zealand's good
progress at risk with more taxes and sharply higher
Mr English's acknowledged his much-prized surplus this
year had reduced to $297 million and the forecast surpluses in
subsequent years were not large.
But, he said, political parties were already making expensive
promises and commitments.
The approach was unsustainable under the previous Labour
government, he said.
Labour finance spokesman David Parker did not mention the
Instead he focused on the forecast drop in exports and
predicted halving of growth which showed it was all downhill
''Growth under this Government peaked in June and halves to
2% in coming years.
"At the same time, wages will stagnate and interest rates
will rise relentlessly.''
New Zealand had become ever more reliant on raw commodities
such as milk and logs while non-primary manufacturing exports
and other industries struggled.
It was clear the narrow focus was hurting the economy and
showed New Zealand needed an economic upgrade only Labour
could deliver, he said.
New Zealand First leader Winston Peters said no-one took the
so-called fiscal surplus of $297 million seriously.
''It is purely for presentational purposes so the Government
can claim it is in surplus.
''This so-called surplus is achieved by all sorts of
manipulation and creative accounting - for example,
understating the costs of the Christchurch rebuild, freezing
departmental budgets and pushing expenditure out years.''
No improvement was forecast on employment with the growth
forecast also down from the Budget figure.
The Government's failure to rebalance the economy over the
past six years was stark, he said.
Green Party finance spokesman Russel Norman said the update
showed net government debt would be substantially higher than
forecast only three months ago.
''National likes to paint themselves as a safe pair of hands
on economic management but Treasury figures show net debt is
projected to be $3 billion higher in 2018 than projected in
the May Budget."
That equated to $663 per New Zealander in the past three
The Treasury identified the main factors supporting economic
growth as house building in Christchurch and Auckland and
faster population growth based on high immigration.
''This is a dependent economy, not a rock-star economy,'' Dr