Another ‘Steady as She Goes’ economic update for the Crown

The Government’s Half Yearly Budget Policy Statement paints a rosy picture of the economy:  with strong growth, coupled with low inflation and weak wage pressures.

But Bill English is keeping his powder dry with another steady-as-she-goes outlook for the Crown. 

“This is the same formula we’ve seen from Bill English for the last few years,” said PwC Partner Richard Forgan. “The Government is funding capital, but keeping a lid on its operating spend; it’s paying down debt and rebuilding the buffers against another downturn or major natural disaster.”

But with pressures from superannuation and the public service readily absorbed by a tax take growing by $4 billion a year, surpluses are forecast to increase dramatically.

“After years of large deficits and razor-thin surpluses, at last the Government has choices as surpluses accelerate towards $8 billion per year,” said PwC Partner Richard Forgan.

“But whether these manifest as new money for social services, lower debt or tax cuts has been left for the next Prime Minister.  Let’s hope s/he doesn’t blow it!”

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