New Zealand Finance Minister Robertson speaks about the ‘wellbeing’ budget in Wellington
New Zealand is set to deliver what it calls a “no frills” budget
On Thursday as falling tax revenues squeeze coffers and inflation risks cap cyclone reconstruction efforts, constraining stimulus as the Labour government faces an election this year.
Finance minister Grant Robertson has said the budget will focus on fiscal sustainability as they cut NZ$4 billion ($2.54 billion) in spending to fund programmes viewed as core and to rebuild infrastructure damaged in the floods and cyclones earlier this year.
“This budget has seen us make difficult trade-offs to keep to our balanced approach,” Robertson said in a speech to the Wellington Chamber of Commerce last week. “It is focused on providing support for people today, while also building our nation for the future.”
The budget is the first for Prime Minister Chris Hipkins, who was successful Jacinda Ardern as prime minister when she resigned down in January after five years at the leadership.
What is expected to be a tightly regulated election, with no party likely to win an electoral majority. The polls will open in october for the people of New zealand .
The 2023-24 budget is expected to show a worsening bottom line with the country unlikely to hit surplus by 2024-25 as was forecast in December.
There would be a $3.36 billion downfall in the year which will end in June 2023 and a $1.66 billion surplus in the year which will end in June 2025. The administration told in December.
The government’s Thursday estimations are also expected to reflect the weakening domestic situation, with the GDP falling 0.6% in the previous quarter.
Money will be set aside to provide relief for those on social welfare while more than NZ$1 billion has already been earmarked for rebuilding after the cyclone.
The government has also promised NZ$748 million to boost defence staff pay and for equipment upgrades. Money for climate-friendly initiatives is also expected.
Bank of New Zealand economists said that although the budget will include some stimulus measures they are unlikely to be significant.
“Even if the government wanted to go larger with spending, and large on tax relief, the accounting boundaries would ring alarm bells,” they said.
($1 = 1.5763 New Zealand dollars)