Budget will map credible path back to surplus

The Government agrees with the OECD that New Zealand should return to budget surplus as soon as possible and the Budget next month will take steps in that direction, Finance Minister Bill English says.

“In its economic survey of New Zealand out today, the OECD points out that achieving faster economic growth requires progress across a broad policy front,” Mr English says.

“In particular, it recommends a faster improvement in our fiscal position, which would take the pressure off monetary policy. The OECD points out this would allow interest rates to remain low for longer and create room for the exchange rate to ease.

“All of this would support the economic adjustment - which is already underway - to build faster growth from savings, exports and productive investment, rather than excessive borrowing and increases in government spending.”

Mr English says the Budget next month will set out several measures that will help the Government return to budget surplus.

“Budget 2011 will take further steps to get the Government’s finances in order, setting a path back to surplus so we can start repaying debt on behalf of taxpayers and help increase national savings.

“We will do that while continuing to support the most vulnerable and maintaining public services.”

The OECD report is available at:

http://www.oecd.org/document/34/0,3746,en_2649_33733_47611554_1_1_1_1,00.html