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English announces 2013 budget date

Published: 1:43PM Wednesday February 13, 2013 Source: ONE News / BusinessDesk

  • Finance Minister Bill English's pitch to boost exports.  (Source: Breakfast)
    Finance Minister Bill English's pitch to boost exports. - Source: Breakfast

Finance Minister Bill English will present the next Budget on May 16, he announced today.

English said that this will be the National-led Government's fifth Budget, "in what have been extremely challenging global economic times".

"It will continue to implement the Government's programme to deliver a more competitive and faster-growing economy, more jobs and a return to fiscal surplus," he says.

English added that the global economic environment remains uncertain and this makes it even more important to maintain clear fiscal settings.

"As well as getting its own finances in order, the Government is continuing to address New Zealand's significant economic challenges, including a sustained rebalancing towards the internationally competitive sectors of the economy," he English.

Treasury keeps half-year forecasts intact

Earlier, the Treasure said that it believes its December forecasts for economic growth are still intact as New Zealand continues its gradual recovery, though the headwind of a strong kiwi dollar is likely to endure into next year.

Secretary Gabriel Makhlouf told Parliament's finance and expenditure committee its forecast average annual growth of 2.5% in the coming five years is by and large intact, though the risks are still skewed to the downside, if not quite as extreme in the face of the US fiscal cliff debate and heightened uncertainty over Europe's ability to stave off a sovereign debt crisis.

"Since HYEFU (half-year economic and fiscal update), revised GDP data from mid-2012 indicates growth was weaker than we expected, but the run of recent data is pointing to a pick-up in December," Makhlouf told politicians. "Reports relating to Canterbury indicate the rebuild is gaining momentum and businesses seem more upbeat."

Mahklouf did not have any good news for exporters on the currency, saying "the exchange rate is assumed to remain near its current level in the current year and into 2014 impacting on growth in the tradable sector."

While that's acting as a drag on exports, it is keeping inflation low and aiding capital investment, he said.

Both Bill English and Mahklouf today talked down their ability to make any sustainable impact on lowering the exchange, which is effectively a pawn in the currency wars between larger economies.

"There's some discussion about whether you can get some exchange rate effect that will relieve pressures on those exporters, but we haven't seen a viable sustainable proposition to do that," English said. "If you could just make that choice well of course you would if it was costless, but it's not costless."

The currency recently traded at 84.07 US cents and 75.90 on the trade-weighted index.