Bill and John aren’t happy with the economy

Photo: RNZ / Diego Opatowski

Photo: RNZ / Diego Opatowski

Like an All Blacks coach, they managed to get the economy to peak just at the electoral Word Cup.  But post election, the economic injuries are starting to show.   The already optimistic and minuscule predicted surplus is no more.

The Government’s flagship economic promise has been holed and is in danger of sinking after Treasury forecast a deficit this year – and with doubts over a return to surplus even in 2016.

It must have been a bitter pill for John Key and Bill English to swallow, after running the promise since 2011 and even claiming on the election stump the books were back in surplus.

The temptation must have been strong to tweak the numbers – as they had through ACC payments and excise duty in recent updates -but at a $572 million deficit the numbers were getting too big to rejig at the margins.

There was no “plausible” change that could be made to get a surplus forecast over the line, as English concedes.

Things have gone backwards quickly enough that no amount of papering over the cracks is going to disguise the disappointment.

And with the surplus in 2016-17 now hacked back to just $565m – roughly a mirror image of this year’s forecast deficit – there must be doubts about that too.

It’s worth noting that to build a war chest of $1.5 billion in 2017 for election year tax cuts, the Government has trimmed $500m off the 2015-16 and 2016-17 provisions for new spending.

Without those changes, the surplus forecast next year would be marginal to nil around $35m.

Having said that, the economic outlook remains robust.

The problem for National is that they need the surplus to buy the next election.  There will be such a lust for a fourth term, National’s plan is to “finally” give us all the stuff we’ve been holding out for.

But that can only be justified on the back of a strong economy.  The voters aren’t going to accept a bribe when they know it’s come from further borrowing.


– Stuff

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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.