‘They’ve worked really hard over the past five years to turn deficits into surpluses and when you’ve got money in the bank it gives you options.’ – Cameron Bagrie, ANZ
The government of New Zealand stated it would run a bigger-than-initially-expected budget surplus this year amid additional investments in infrastructure. The government estimated a NZ1.62M surplus in the year to June, compared to its prior projection of a NZ$473M surplus. The Finance Minister Steven Joyce reported that the government would spend extra NZ$11B on infrastructure, including housing, roads, railways and prisons over the next four years. Apart from that, the government said it would spend NZ6.5B to support families through increasing grants and reforming some taxes. The following move is expected to provide support to the current government ahead of the 2018 National Election. New Zealand is also expected to run a trade surplus of NZ$2.85B in the year to June 2018. Meanwhile, the Treasury revised up its economic growth forecast from 3.4% to 3.7% amid the recent rebound in dairy product prices and improving tourism. The Finance Minister also said that the government would invest additional money in the nation’s disaster fund, following massive earthquakes Christchurch and Kaikoura.
