Treasury figures' meaning disputed

Bill English.
Bill English.
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 - just

''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 programme.

''Now is certainly not the time to put New Zealand's good progress at risk with more taxes and sharply higher government spending.''

David Parker.
David Parker.
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 modest surplus.

Instead he focused on the forecast drop in exports and predicted halving of growth which showed it was all downhill from here.

''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 months.

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 Norman said.

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