Finance Minister, Grant Robertson says the Government’s sound financial management means New Zealand is well placed to support families and businesses dealing with cost of living pressures and extreme weather events.
For the seven months to the end of January, the Operating Balance before Gains and Losses (OBEGAL) recorded a deficit of $2.4 billion, close to forecast at December’s Half Year Economic and Fiscal Update and $5.6 billion lower than for the same period a year ago. Tax revenue, core Crown expenses and net debt were slightly below expectations.
“This result reflects the resilience of the economy despite a challenging global environment and sound management of our finances and shows we are well positioned to respond to cost of living pressures and the impact of Cyclone Gabrielle,” Mr Robertson said.
“We’re taking a range of actions to support New Zealanders doing it tough and help ease the pressure on families. We’ve already extended fuel tax cuts and half price public transport until the end of June. We’re also significantly increasing support for seniors, students, beneficiaries and those on Working for Families from 1 April, along with making it cheaper for more families with our childcare package. We have also indicated that cost of living issues will be a major focus in the Budget in May.
“The recent extreme weather has added further pressure on families and businesses in affected areas, dealing with damaged or lost homes and disruptions to their livelihoods. We are committed to supporting them through the response, recovery and rebuild.
“New Zealand is in a strong financial position to do so thanks to the Government’s careful and prudent management of the books. We know however that the Crown accounts will change significantly in the coming months and years as the impact the cyclone and flooding become clearer and our approach may need to change in response.”
Core Crown tax revenue was $434 million or 0.7% below forecast at $64.7 billion. Core Crown expenses were $164 million, or 0.2%, below forecast at $71.7 billion.
Net debt was 18.9% of GDP, below the forecast of 19.8% of GDP.
“Our debt levels are among the lowest in the OECD and well below the Government’s debt ceiling of 30 percent, ensuring we are well positioned to handle the impacts of Cyclone Gabrielle and future economic shocks,” Minister Robertson said.
“New Zealand is in a strong starting position, with low unemployment, growing exports, a rebound in tourist numbers and an increasing numbers of overseas workers arriving to fill vacancies. The new Recovery Visa will also fast track applications of overseas workers to support cyclone and flood recovery.”
“We are continuing to take a balanced approach on what matters to New Zealanders; cost of living, strong public services, a resilient infrastructure network and addressing climate change while carefully managing our resources to ensure the long term sustainability of the economy,” the Minister said.