Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More
Parliament

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

 

Economic Update Shows Faster Recovery

The Government’s decision to act quickly in response to the global COVID-19 pandemic has contributed to a better than expected economic recovery, Grant Robertson says.

The Treasury today released its latest economic and fiscal forecasts in the 2020 Half Year Economic and Fiscal Update.

While New Zealand’s economy contracted in 2020, it is forecast to rebound strongly in 2021 outperforming regions we compare ourselves to, like the Euro Zone, the United Kingdom and Japan.

“Global economic activity is expected to continue to recover over the rest of the forecast period, although the pace of recovery is likely to be uneven as countries contend with renewed virus outbreaks and the resulting containment measures.

“Of course the pandemic is not the only risk to the global outlook. Ongoing trade and geopolitical tensions, in particular tensions between China and the United States, have the capacity to affect growth and lead to higher levels of volatility,” Grant Robertson said.

The employment outlook has also improved, with a much lower forecast peak in unemployment and a faster recovery in labour force participation.

“In line with the stronger domestic recovery, the unemployment rate is forecast to peak at 6.9% by the end of 2021, compared to 7.8% forecast in the Pre-Election Economic and Fiscal Update (PREFU).

“Core Crown tax revenue is forecast to be $16.8 billion higher over the forecast period compared to PREFU.

“PAYE revenue is expected to be higher the forecast period, mainly because of a stronger outlook for employment and wage growth. GST forecasts are up partly due to strengthening consumer confidence,” Grant Robertson said.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

OBEGAL deficits have reduced in all years across the forecast period when compared to the PREFU. The deficit for the 2020/21 fiscal year is expected to be lower by $10.1 billion.

Looking through the fiscal impact of the Reserve Bank’s Funding for Lending Programme (as the Treasury suggests), the total residual cash deficit and net core Crown debt indicators would both improve by $5.8 billion.

As a percentage of GDP, net core Crown debt would peak at 45.6% in 2023/24 (one year later than without the FLP assets) and remain steady dropping to 45.5% in 2024/25.

As announced at the annual Crown accounts lockup last month, the Budget Policy Statement will be released in the New Year.

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines


Gordon Campbell: On The US Opposition To Mortgage Interest Deductibility For Landlords


Should landlords be able to deduct the interest on the loans they take out to bankroll their property speculation? The US Senate Budget Committee and Bloomberg News don't think this is a good idea, for reasons set out below. Regardless, our coalition government has been burning through a ton of political capital by giving landlords a huge $2.9 billion tax break via interest deductibility, while still preaching the need for austerity to the disabled, and to everyone else...
More


 
 

Government: Concerns Conveyed To China Over Cyber Activity
Foreign Minister Winston Peters has confirmed New Zealand’s concerns about cyber activity have been conveyed directly to the Chinese Government. “The Prime Minister and Minister Collins have expressed concerns today about malicious cyber activity... More

ALSO:


Government: GDP Decline Reinforces Government’s Fiscal Plan

Declining GDP for the December quarter reinforces the importance of restoring fiscal discipline to public spending and driving more economic growth, Finance Minister Nicola Willis says... More

ALSO:


Government: Humanitarian Support For Gaza & West Bank

Winston Peters has announced NZ is providing a further $5M to respond to the extreme humanitarian need in Gaza and the West Bank. “The impact of the Israel-Hamas conflict on civilians is absolutely appalling," he said... More


Government: New High Court Judge Appointed

Judith Collins has announced the appointment of Wellington Barrister Jason Scott McHerron as a High Court Judge. Justice McHerron graduated from the University of Otago with a BA in English Literature in 1994 and an LLB in 1996... More

 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels


 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.