Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


Economic momentum building as plan on track

Hon Bill English
Minister of Finance

17 December 2013

Economic momentum building as plan on track

The Government’s programme to build a faster-growing economy with more jobs and rising incomes is delivering positive results, Finance Minister Bill English says.

The Half-Year Economic and Fiscal Update, issued today, forecasts a relatively strong upturn, with economic growth reaching 3.6 per cent in 2015 and the unemployment rate falling.

“While the recovery gathers momentum, the global environment still remains uncertain,” Mr English says. “In this environment, it is important to maintain clear and credible economic and fiscal settings, as this is the best way to create new jobs, raise incomes and help families to get ahead.”

The latest forecasts show the Government posting a modest operating surplus before gains and losses of $86 million in 2014/15 – similar to the $75 million surplus forecast in Budget 2013.

Surpluses are then forecast to increase to $1.7 billion and $3.1 billion respectively in the following two years. Debt is forecast to fall, with net core Crown debt expected to peak at 26.5 per cent of GDP in 2014/15, before falling to 16.9 per cent of GDP in 2019/20.

“The Government remains committed to responsible long-term fiscal management,” Mr English says. “Improving public sector performance will assist in ongoing spending restraint beyond 2014/15, so we can pay down debt in dollar terms from 2016/17 and build a buffer against future shocks.

“We have a lot of work ahead to make the forecasts and projections a reality. The Government is this year borrowing a net $78 million on average every week and, in dollar terms, net debt will peak at $64.5 billion in 2015/16.

“It is also important to avoid the mistakes of the mid-2000s, when large increases in government spending and a booming housing market drove up interest rates and the exchange rate and eroded productivity.”

At the same time as getting its own finances in order, the Government is continuing to address New Zealand’s significant economic challenges, including a sustained rebalancing towards those sectors of the economy that compete internationally.

“A broad range of targeted microeconomic reforms currently underway, through the Business Growth Agenda, will help lift New Zealand’s productivity and competitiveness.

“Since mid-2009, the tradeables sector has grown by 11.1 per cent, after going into recession in 2005. In the same period, the non-tradeables sector has grown by 6.6 per cent.

“This is a good start, but successful rebalancing will require consistent and positive change over several years,” Mr English says.

The New Zealand economy continued to expand through 2013, growing at 2.5 per cent in the year to June – despite the severe drought which significantly restricted growth in the first half of 2013. This was among the higher annual growth rates among developed countries.

“Signs are that the pace of growth has picked up appreciably in the second half of 2013, and the Half-Year Update shows the economy expanding at 3.6 per cent over the year to March 2015, and then at an average of 2.3 per cent over the following three years.”

Mr English says New Zealand is well placed compared to most countries.

“On average, wages are increasing faster than inflation, business confidence is at its highest level since 1999 and the terms of trade remain high. There are over 53,000 more people employed now than a year ago, and the unemployment rate is dropping as the economy gathers strength.”

Budget 2014 will continue the Government’s priorities for this term: responsibly managing its own finances and returning to surplus; pushing ahead with wide-ranging microeconomic reforms to create a more productive and competitive economy; driving better results and better value for money from public services; and supporting the rebuilding of Christchurch.

“The Half-Year Update confirms the Government’s economic programme is working by laying the foundations for a stronger economy, sustainable jobs and higher incomes,” Mr English says. “New Zealand is well-placed to take advantage of the many opportunities available over the next few years and to withstand global shocks when they come our way.”

The Half-Year Economic and Fiscal Update and Budget Policy Statement are available at:



2013 Actual2014 Forecast2015 Forecast2016 Forecast2017 Forecast2018 Forecast
Economic (March years, %)
Economic growth2.
Unemployment rate6.
CPI inflation0.
Current account balance-4.5-4.2-5.5-6.3-6.5-6.4
Fiscal (June years)
Total Crown OBEGAL ($millions)-4,414-2,320861,6743,1045,623
Net debt (% of GDP)26.226.326.525.824.422.3


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines



Wellington.Scoop: Serco – First The Prisons, And Now It Wants To Run The Trains

As the government continues its inquiry into Serco’s discredited administration of Mt Eden prison in Auckland, here in Wellington there’s further scrutiny of the British outsourcing company – because it’s competing to take over the running of our commuter trains. More>>


Gordon Campbell: On The TPP Countdown, And Mary Margaret O’Hara

To date, the Key government has been unwilling to share any information about this TPP deal until it is too late for outraged public opinion to affect the outcome... the disclosure process is likely to consist of a similarly skewed and careful exercise in spin. More>>


Australia Deportations: English Relaxed On Immigration Centre Conditions

Labour's Annette King: “There have been numerous reports from inside these detention centres on just how bad conditions are... If they were being held in any other foreign jail, I imagine Mr English would be somewhat concerned. More>>


Schools: Achievement-Based Funding Would Be A Disaster

The Education Minister’s speech to the PPTA Conference raising the spectre of achievement data driving a new funding system would be disastrous, says NZEI Te Riu Roa. More>>

  • Video Out-Link - PPTA Annual Conference 2015 on Livestream (Q+A dicussion suggests funding would be directed to less successful schools.)

  • ALSO:

    ECE Report:

    Key In NY: Prime Minister Addresses United Nations

    Prime Minister John Key has addressed the United Nations General Assembly in New York, focusing on a call for action in Syria and on other conflicts, reform of the veto process and on the UN’s Sustainable Development Goals. More>>.


    Gordon Campbell: On The Lack Of Accountability Over Philip Smith

    In New Zealand, accountability is an exotic creature rarely glimpsed at ministerial level, or among senior management. The flight to Rio by the paedophile /murderer Philip John Smith/Traynor is no exception. More>>


    More On Corrections

    Get More From Scoop



    Search Scoop  
    Powered by Vodafone
    NZ independent news