Source: Radio New Zealand
Finance Minister Nicola Willis speaking at the Half Year Economic and Fiscal Update RNZ
Finance Minister Nicola Willis is doubling down on her “disciplined” plan for returning the books to surplus – despite new forecasts delaying it by yet another year.
And she took aim at those advocating for sharper spending cuts, such as the Taxpayers’ Union, warning that that prescription would deliver “human misery”.
“We are sticking to our strategy,” Willis said. “Not over-reacting to movements in the forecasts.”
Treasury’s half-year update, published on Tuesday, predicted a return to surplus in 2029/30 – a year later than its forecasts in May. That’s using the coalition’s new OBEGALx calculation which excludes ACC.
“I wouldn’t get too wound up about small changes,” Willis told reporters. She said she would continue to aim for a surplus by 2028/29.
“We are on target to return the books to surplus faster than Australia, the United Kingdom, Canada and many other advanced economies, while maintaining a prudent debt position.”
In her budget policy statement, released alongside Treasury’s update, Willis confirmed she would stick to her previously signalled operating allowance of $2.4 billion.
Treasury Secretary Iain Rennie RNZ
Existing pre-commitments meant that left just $1b a year on average for spending on new initiatives in next year’s Budget.
“Most agencies and ministers will need to plan to manage service pressures and other commitments with little or no additional funding,” Willis said.
Willis noted the downward revisions to forecasts were “relatively modest” but acknowledged they followed a similar trend over the past two years due to factors “outside the government’s direct control”.
The Taxpayers’ Union last week launched a campaign calling for Willis to cut public spending and debt more aggressively, accusing her of simply continuing the previous Labour government’s “sugar-rush economics”.
It prompted Willis to throw down the gauntlet, challenging its chair Ruth Richardson – a former finance minister – to debate her “anytime, anywhere” on the government’s finances.
The two have since been locked in negotiations over the conditions for the debate, including [
https://www.rnz.co.nz/news/political/581707/ruth-richardson-still-willing-to-debate-nicola-willis-after-dispute-over-venue time, location and moderator.]
Speaking on Tuesday, Willis said she had no update on that showdown but was still up for the debate.
“The offer is there. Thursday afternoon, I’m available. Friday morning, I’m available. I don’t really care who the moderator is. If they want to turn up, I’m ready.”
Willis explicitly nodded to the “shorter, sharper fiscal consolidation” being advocated by the Taxpayers’ Union.
She said while that would speed up the return to surplus, it could also hurt frontline public services and depress already-weak demand in a recovering economy.
Willis pointed out that the Taxpayers’ Union proposed scrapping all Working for Families tax credits, reducing recipients’ average weekly incomes by about $180.
She said beneficiaries and low-income families would bear the brunt of that change, delivering “a level of human misery” that she was not prepared to tolerate.
Willis said, on the other hand, Labour’s approach to spending was “reckless” and would further delay a return to surplus.
She said the government had delivered about $11b a year in savings during its term.
“Without this disciplined approach, this year’s deficit would be $25 billion and debt would be on track to blow out to 59 percent of GDP,” she said.
Willis promised to release more details to prove that: “We have the receipts.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
