Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 


Research NZ Budget Observer - Still On Track For Surplus

Research NZ Budget Observer - Still On Track For Surplus as Election Looms

New Zealand's Treasury today released their pre-election budget update, ahead of the 20 September vote. The government still expects to get back to surplus in 2014/15, albeit a slightly smaller surplus than expected in May. The growth forecasts were revised down modestly for 2014/15, reflecting the recent decline in dairy prices. GDP growth is now forecast to be +3.6% in 2014/15 (previously +4.0%) and +2.6% in 2015/16 (previously +2.4%): this would still be above or around trend in both years. Lowered nominal growth forecasts also saw lower expectations for future budget surpluses. Current polling sees the incumbent centre-right National party ahead in the lead up to the election.

Facts
- The fiscal forecasts are only marginally weaker than those published in the May budget. The operating balance (excluding gains and losses) is still expected to return to surplus in the current 2014/15 fiscal year. The forecast surplus has been revised down marginally from NZD372m to NZD297m (0.1% of GDP). In 2015/16 the budget surplus was revised down from NZD1262m to NZD818m (0.3% of GDP).

- Net debt is expected to peak at 26.8% of GDP, up from 26.4% in the May budget forecasts.

- The Treasury forecasts for GDP growth over the year to March 2015 (FY2014/15) were revised down from +4.0% to +3.6%, mostly due to a sooner than expected fall in the terms of trade, driven by lower dairy and forestry prices. Forecasts for GDP growth in 2015/16 were revised up slightly to +2.6%, from +2.4%.

Implications
Today's budget update from the New Zealand Treasury reminds us that even though dairy prices have fallen sharply over the past few months, growth is still expected to remain strong. Put simply, New Zealand's current growth story is more than just milk.

Indeed, despite the recent fall in dairy prices, the Treasury's forecasts have been revised down by only -0.4ppts to +3.6% for 2014/15, leaving growth still well above trend (which we see at around +2.5%) and still suggesting that New Zealand is likely to be fastest growing OECD economy this year. Growth is expected to be supported by the Canterbury rebuild, a broader construction ramp up and strong inward migration. The Treasury's growth forecasts were nudged slightly higher for 2015/16, up to +2.6%.

Nonetheless, the -40% fall in the price of New Zealand's major export has knocked a little off the Treasury's nominal growth numbers and off their budget surplus forecasts. They expect a very small budget surplus in 2014/15 of 0.1% of GDP and have also revised down surpluses in the out-years.

At this stage, no additional tax cuts have been announced in the lead-up to the election, with the Minister of Finance, Bill English, today stating that there was 'no room for significant loosening of the purse strings'.

Current polling sees the incumbent centre-right National party, led by John Key, ahead in the lead up to the 20 September election. Three polls were conducted recently. The Fairfax Media Ipsos survey (9-13 August) has 55.1% of the vote going to the National party for an outright majority. Other polls show closer results, but would still suggest a National party win. The One News Colmar Brunton survey (9-13 August) showed the Nationals taking 50% of the vote, while the 3 News Reid Research survey (5-13 August) showed only 47.5% to Nationals, but would still suggest the Nationals are likely to scrape through once smaller parties form coalitions.


ends

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Digital Evolution: Scoop Independent News Launches "Operation Chrysalis"

From today Scoop is beginning a process of public consultation with the political, business and civil society groups it has served for the past 15 and a half years.

"It is hoped that in time - with new leadership and increased community engagement - the chrysalis will incubate a new kind of Scoop, one which can sustainably continue Scoop's Mission 'to be an agent of positive change'", says Scoop Founder, Editor and Publisher Alastair Thompson.

"As big publishing shrivels, public participation in contributing and spreading news has grown. Scoop has evolved with this wave by providing an independent platform, committed to upholding democracy, providing a voice to all, and providing the public easy access to information about decisions which affect them." More>>

 

Parliament Adjourns:

Greens: CAA Airport Door Report Conflicts With Brownlee’s Claims

The heavily redacted report into the incident shows conflicting versions of events as told by Gerry Brownlee and the Christchurch airport security staff. The report disputes Brownlee’s claim that he was allowed through, and states that he instead pushed his way through. More>>

ALSO:

TAIC: Final Report On Grounding Of MV Rena

Factors that directly contributed to the grounding included the crew:
- not following standard good practice for planning and executing the voyage
- not following standard good practice for navigation watchkeeping
- not following standard good practice when taking over control of the ship. More>>

ALSO:

Gordon Campbell:
On The Pakistan Schoolchildren Killings

The slaughter of the children in Pakistan is incomprehensibly awful. On the side, it has thrown a spotlight onto something that’s become a pop cultural meme. Fans of the Homeland TV series will be well aware of the collusion between sections of the Pakistan military/security establishment on one hand and sections of the Taliban of the other… More>>

ALSO:

Werewolf Satire:
The Politician’s Song

am a perfect picture of the modern politic-i-an:
I don’t precisely have a plan so much as an ambition;
‘Say what will sound most pleasant to the public’ is my main dictum:
And when in doubt attack someone who already is a victim More>>

ALSO:

Flight: Review Into Phillip Smith’s Escape Submitted To Government

The review follows an earlier operational review by the Department of Corrections and interim measures put in place by the Department shortly after prisoner Smith’s escape, and will inform the Government Inquiry currently underway. More>>

ALSO:

Intelligence: Inspector-General Accepts Apology For Leak Of Report

The Inspector-General of Intelligence and Security, Cheryl Gwyn, has accepted an unreserved apology from Hon Phil Goff MP for disclosing some of the contents of her recent Report into the Release of Information by the NZSIS in July and August 2011 to media prior to its publication. The Inspector-General will not take the matter any further. More>>

ALSO:

Drink: Alcohol Advertising Report Released

The report of the Ministerial Forum on Alcohol Advertising and Sponsorship has been released today, with Ministers noting that further work will be required on the feasibility and impact of the proposals. More>>

ALSO:

Other Report:

Leaked Cabinet Papers: Treasury Calls For Health Cuts

Leaked Cabinet papers that show that Government has been advised to cut the health budget by around $200 million is ringing alarm bells throughout the nursing and midwifery community. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news