Focus on reducing debt

The Canterbury earthquakes are likely to slightly delay the return to budget surplus, but it is important the Government gets debt back to pre-earthquake levels to absorb future economic shocks.

In tackling government debt, we had intended to get back to surplus in 2014/15. It now seems more likely that we will return to surplus in 2015/16. Meeting the Government’s share of the immediate earthquake costs will require a bit more debt in the short term, as well as taking a close look at our existing spending priorities.

In preparing for the Budget on 19 May we will make careful decisions about where we prioritise spending. Any changes will ensure that the Government’s commitment to protecting the most vulnerable and maintaining public services continues.

We need to press on with our broader economic programme to reduce New Zealand’s vulnerability to foreign lenders, get the Government’s finances in order, and build faster growth based on higher national savings and exports.

Only a strong economy can provide financial security for families, real opportunity for young people, safer communities, and the high-quality education and health services that all New Zealanders need. That is the best way we can help the people of Christchurch.

More information: http://www.beehive.govt.nz/release/surplus-remains-sight-focus-reducing-debt