Finance Minister Bill English says the Government is on track
for a Budget surplus in 2014-2015 despite the drought, but
said it would affect the economy for a couple of years.
Treasury was looking carefully at the forecasts for the May
16 Budget, he said.
"I would expect though, that we will still be able to achieve
Its effect on the economy was yet to be known but its impact
would last at least a couple of years. It would take some
time for farmers who slaughtered stock to rebuild their herds
and to work off tax losses.
He said that recent forecasts, showing better revenue, might
have given him more choices over spending, but that would now
"It probably means that where we were expecting a bit more
room to move because things were running a bit better than
expected, that that is not now going to be the case. The
drought will peg that back but we have yet to see how far."
He did not think it would be a dramatic difference but it
would continue to be a tight Budget. Some of the banks had
estimated that it would affect GDP from $500 million to $1
"If it is that big it would affect our tax take," Mr English
said. The Budget in May last year forecast a $197m surplus in
2014-15 but by the half-yearly update in December that had
been reviewed downward to $66m. In the Crown accounts for the
seven months to January 31, expenses were $282m under
forecast and revenue was $486m above estimates.