Tuesday, October 19, 2021

Economy has performed better than forecast says Finance Minister

The end of year audited Crown accounts released today show the Government’s health led approach to the COVID-19 pandemic has protected New Zealand’s economy, says Finance Minister, Grant Robertson.

“On almost every indicator the accounts show that the New Zealand economy has performed better than forecast, even as recently as the Budget in May,” the Minister said.

“It shows a strong rebound from the first lockdown in 2020, and bodes well for emerging from the current outbreak.”

As expected, the Crown accounts for the year to June 2021 show the operating balance before gains and losses, or OBEGAL, was in deficit, to the tune of $4.6 billion. Mr Robertson said the result was $10.6 billion better than the Treasury forecast in Budget 2021, largely owing to the economy’s growth continuing to exceed Treasury forecasts.

Core Crown tax revenue was $12.9 billion higher than last year and $6.4 billion higher than forecast in the Budget coming in at $98 billion. With the country being in lower Alert Levels for most of the year, economic conditions were better than forecast, the Minister said.

A strong labour market and consumer confidence have driven the increase in tax revenue. This included increases in company tax, GST and source deductions (PAYE), he said.

Net core Crown debt was 30% of GDP at the end of June, below the 34% forecast in the May Budget.

“The decisions we made during last year’s COVID outbreak with economic support and health measures meant the economy bounced back better than almost anyone predicted. That strength has given us the fiscal headroom to support businesses and households when the Delta outbreak struck,” said Mr Robertson.

“As all countries around the world have done, we have had to take on some debt to support businesses and workers through this COVID-19 pandemic – any responsible Government would have done the same thing.

“However the level of debt remains lower than expected and far lower than most of our international counterparts. The average for advanced economies is above 90 percent net debt. In addition the cost of servicing that debt also remains very low by historical standards.

“We will continue to take a balanced approach, investing heavily to support wellbeing, our transition to being a low carbon economy and to improve productivity, while carefully managing our resources with an eye to the long term sustainability of the economy,” he said.

The Budget Policy Statement and Half-Year Economic and Fiscal Update will be released on Wednesday 15 December.

Latest Articles

Tokoroa Pine Man back from the brink

Tokoroa's iconic Pine Man is set to be reinstalled in coming weeks following a three-month restoration. “We’re thrilled that...

Queenstown community initiative targets emissions

Queenstown Lakes District Council (QLDC) has partnered with a not-for-profit climate action group to give local businesses and schools the knowledge and...

Waipā council flushes water misinformation

Waipā District Council has moved to set the record straight following what it claims is community misinformation about its wastewater treatment processes.

Navy ship headed to Kermadec Islands

Royal New Zealand Navy ship HMNZS Wellington has set sail for Raoul Island in the Kermadec Islands with GNS Science and MetService...

Boating accidents report ‘sombre’ reading

The importance of wearing a lifejacket on a boat and planning for the unexpected has been highlighted in a Maritime NZ report...
X