Hon Bill English
Minister of Finance

15 October 2015

English commits to ongoing fiscal restraint

Slowing growth in the global economy highlights the need for ongoing fiscal restraint, Finance Minister Bill English said in a speech to the Trans-Tasman Business Circle in Wellington today.

“Reaching surplus was a significant milestone, and one the public service can be proud of. But the job is far from done – we now need to focus on getting debt down,” Mr English says.

“A weaker global economy and lower inflation outlook means Crown revenue is likely to grow slower than previously expected. So the Government will focus on what it can control - responsible and prudent management of expenditure.

“As we’ve demonstrated in our path back to surplus, this isn’t about slashing spending or services.

“It is about understanding and addressing the underlying drivers of demand for social services – so that we can support people to lead better lives, and save taxpayers money in the long run.

“It is also about better managing our balance sheet – good asset management now means less debt later.”

Mr English also indicated that with the 2014/15 surplus target now behind us, the Treasury is investigating whether a refreshed set of fiscal targets would better support ongoing responsible fiscal management.

“The surplus target has been highly effective when the books needed a sharp improvement from an $18.4 billion deficit,” Mr English says. “Now the books are back in balance, we need to consider whether a point target in a particular year is still the best option.

“But while the Government is open to refreshing the fiscal targets, we are not looking at changing direction. We have worked hard to establish a track record of fiscal responsibility against a challenging backdrop following the Global Financial Crisis and Canterbury earthquakes. Now we have to maintain that reputation,” Mr English said.

ENDS

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