Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Reaction to Budget relaxation shows balance 'about right'

By Pattrick Smellie

May 24 (BusinessDesk) - The government's decision to relax its Budget Responsibility Rules has attracted a balance of positive and negative criticism, suggesting it's pitched about right, said Prime Minister Jacinda Ardern in a speech to an Auckland business audience ahead of Finance Minister Grant Robertson's first "well-being Budget", next Thursday.

"For anyone who needs or wants a reminder, these were a set of self-imposed rules to demonstrate our commitment to sound economic management covering our debt-to-GDP ratio, core Crown spending and Budget surpluses," she said. "The reaction to (Robertson's) news that following the expiry of the Budget Responsibility Rules in 2022 we would be moving from a net debt target (of 20 percent) to a net debt range (of 15-to-25 percent) received positive and negative attention – usually a sign we have the balance right."

While critics on the left have said the rules should be abandoned earlier to allow more spending on both infrastructure and areas of ongoing spending need, those on the right have said it indicates the government is unable to maintain its commitments to fiscal discipline.

However, Ardern made clear the government still regards the rules as important to ensuring New Zealand has a buffer in the event of a global economic downturn or turmoil caused by, for example, the ongoing trade tensions between the US and China.

"Our economy is strong but, as you all know, we will always be impacted by global headwinds, which of course doesn’t mean we can’t prepare ourselves to be resilient and future proof but does tend to mean that we always keep one eye on the rest of the world," she said.

"The tariff war between the US and China has flared up again in the last couple of weeks, the US economy is also showing signs of slowing. And uncertainty in Europe due in large part to Brexit is ongoing adding further to the global economic headwinds we face.

"All of this adds up to a global environment in which New Zealand businesses operate that is both unstable and uncertain."

On progress towards policy-making that puts well-being measures on a par with economic resilience, Ardern urged patience, saying "systemic change does take time".

"My hope is though, that this year, by meeting both the Budget Responsibility Rules and with the new Well-being Budget, you’ll see us doing exactly what is needed – setting a strong foundation for both our country and our people."


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Seeking 'Clarity': Crown To Appeal Southern Response Decision, Offers Costs

“It is our intention that the clarity that will come from the outcome of these proceedings will enable the Crown to work with Southern Response to provide a soundly based proactive solution to those people that are affected.” More>>

Thinking Of The Children: Plan For Classification For Commercial Video On Demand

Classifying on-demand video content will be made mandatory to bring it in line with other media and provide better guidance and protections to families and young people, says Internal Affairs Minister Tracey Martin. More>>

Cheques Out: Inland Revenue And ACC Push For Paperless

Inland Revenue and the Accident Compensation Corporation are calling ‘time’ on cheques. From March next year, IR and ACC will no longer accept payments by cheque from customers who are able to use alternative payment options. More>>

ALSO:

"Vision And Growth": Capital Markets 2029 Report

Broader participation by New Zealanders, greater access to growth capital for New Zealand enterprises, and more choices for investors drive the recommendations in the Capital Markets 2029 report released today. More>>

ALSO:

Forest & Bird: Call For More Funding To Stop Plague Of Wallabies

Wallabies could spread over a third of New Zealand within the next 50 years, unless control is increased dramatically, says Forest & Bird central North Island regional manager Rebecca Stirnemann. More>>

ALSO: