Political & Economic week that was: Budget date announced
Rob Hosking breaks down the Budget date in the Political and Economic Week That Was. With special audio feature.
Finance Minister Bill English announced the date for his eighth budget this week while carrying the latest attack from his opposite number in the Labour Party.
Labour finance spokesman Grant Robertson has been running the attack line for some months that, while real GDP growth is showing considerable health, GDP growth per capita is flat.
Mr English’s response is that, whenever real GDP is doing well, Labour Party tends to argue that the parts that are doing well should be taken out of the equation.
That formed the thrust of much of their interactions at Parliament's finance and expenditure committee this week.
But really, that spat about different measures of GDP is not something that is bothering the finance minister.
If anything, it allowed him to drop some pretty broad hints that he is going to let loose in the fiscal purse-strings over the next year or two.
The government has already indicated it has $1 billion set aside for new initiatives this year and $2.5 billion for next year.
Mr English says there could be some "phasing" changes around this, partly due to extra demands on the government from that strong net immigration.
By phasing changes, the finance minister can only mean bringing some spending forward: It is hardly likely to mean deferring spending.
That raises two issues: One is whether the extra new spending this year will be matched by less new spending in 2017, which has to be an election year.
The second issue is what effect any changes to the timing, let alone the amount, of new spending by the government will have on the Reserve Bank’s interest rate track.
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Fri, 19 Feb 2016
Fri, 19 Feb 2016
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Political & Economic week that was: Budget date announced
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