Budget 2006 Executive Summary
- The Government's Finances at a Glance
- New Spending in Budget 2006
Budget 2006 builds on the investments the Labour-led Government made in its first two parliamentary terms. Our focus has been on increasing spending in key social areas, restoring funding in core public services while investing in the economy to lift our economic performance and being prudent fiscal managers. Budget 2006 advances these by prioritising new funding on policies to further enhance New Zealand’s economic transformation while strengthening its families and its sense of national identity.
Our economic growth in the past two parliamentary terms has been very strong – above the OECD average. At the same time, the unemployment rate has fallen to be amongst the lowest rate in the OECD. Forecasters have been predicting for some time that the economy will go through a downturn as part of a normal business cycle. New Zealand entered this cycle in the second half of last year and forecasters are predicting an economy that will slow to around 1.0% annual average growth in the 12 months to March 2007 before picking up again.