Treasury has a useful pdf summarising the Half Year Economic and Fiscal Update. Key data includes:

GDP forecast to grow at 3.7% this year and 3.5% next year

Unemployment rate to drop to 4.2% by 2019

Net migration to slow from 70,000 to 20,000

Inflation to sneak up to 2%

OBEGAL surpluses of: $0.5b in 2017 $3.3b in 2018 $5.4b in 2019 $6.8b in 2020 $8.5n in 2021

NZ Super Fund contributions to resume in 2021

Net debt to reduce from 2018

Cost of NZ Super to go from $12.3b this year to $16.0b in 2021

Core crown expenses to go from 29.4% of GDP to 27.7%

Core crown revenue to go from $76.1b this year to $97.1b in 2021

There is no doubt in my mind that tax cuts are a matter of when and how much, not if. No National led Government can soak up an $8.5 billion surplus by only increasing spending. That is what Cullen did.

We are one of the few countries in the world to have such a great set of books, and such strong economic growth forecast. Surplus give options – you can pay off debt, reduce taxes and increase spending. A sensible government will do all three, not just one or two of them.

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