Harman reads between the lines; thinks he’s got the Big Budget Reveal

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One big number is likely to stand out of this Thursday’s Budget.

That will be a huge forecast Government surplus for sometime in the next Parliamentary term.

Mr English has been recently addressing each of National’s regional conferences and in those speeches he has talked about “better than expected” macro numbers featuring in the Budget.

Ten days ago he told his party’s southern regional conference in Wanaka o that in “two or three years” the Government would be recording a five billion dollar surplus.

“New Zealand has done a pretty good job of getting us back to surplus,” he said.

“And now the surpluses kind of look like they are locked in.

“So now the political landscape is rising surpluses.

“So we can’t run the argument that there is no money because I will be showing numbers in the Budget, which show two or three years out, five billion dollar surpluses.

“So we are not going to be able to say there is no money.”

Just what he means by “two or three years” was not defined any more tightly but what it is likely that he is referring to either the 2018 or 2019 Budget.

The half-yearly fiscal update published last December forecast a $3.1 billion surplus for the 2018/19 fiscal year.

That would suggest the $5 billion figure would be more likely to fall in the 2019/20 year and one source familiar with Budget preparations told POLITIK that this might be the case.

If that is so, then the Government could confidently promise the $3 billion in tax cuts the Prime Minister has been talking about.

In Parliament yesterday, answering questions from Labour’s Grant Robertson, he appeared to be offering similar hints.

“Due to the hard work of the Public Service, the members of the various coalition Governments, and the New Zealand public, this Budget will indicate that New Zealand has choices out ahead of us that very few other developed countries have,” he said.

“They simply will not have choices because their public finances are not yet in a sustainable position—ours are.”

Historically, just as a National government has dug the country out of a big hole, and things go better, the electorate tires of seeing the same old faces and gives the money all to Labour to give away and dig a new hole for the next National government.

Tax cuts will strategically be a great move, but National also must keep in mind that the point comes when nurses, teachers and police want to be rewarded for dutifully working with tighter belts.

 

Richard Harman, Politik


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