Key stands by 2014-15 surplus plan

VERNON SMALL
Last updated 07:41 04/12/2012

Relevant offers

Politics

Paula Bennett has won the battle for deputy Prime Minister and will team up with Bill English Duncan Garner: Bitter Bill and the day our next prime minister lost the plot John Key's most enduring legacy is make the right like Madonna Tracy Watkins: Prime Minister Bill English - the big political reset Guess who will lead the country on Monday? Will English and Joyce ring the changes? Smiles, selfies and fitting Christchurch farewell for John Key National party heavy hitters throw their weight behind Paula Bennett for deputy Prime Minister Best of the west: Bridges or Bennett? Gibbston Valley Concert liquor licence approved

The Government's plan to return to surplus by 2014-15 appears to be on a knife-edge as the Treasury prepares its final forecasts for the year.

Prime Minister John Key yesterday said it was important the numbers showed a return to surplus "within cooee" of the date the Government had set, to avoid a backlash from credit rating agencies.

"They are not unrealistic, but anyone that thinks we can just abandon getting back into surplus within cooee of the date that we have said . . . with no ramifications is misleading themselves," he said.

"We have high levels of private sector debt, they are conscious of our current account deficit and have a certain amount of patience."

He said he was "not uncomfortable" with the numbers he had seen ahead of Treasury's update on December 18.

However, he cautioned not to put too much weight on the final forecast.

"Whatever number they tell you at the end of this year, that will not be the number" that is finally achieved.

In the May Budget, Treasury forecast a slim surplus of just $197m in 2014-15.

But Mr Key said the numbers were on the right track, with deficits falling sharply in the last few years.

New Treasury advice to ministers, released yesterday, indicated the economy had slowed in the second half of the year but would rebound in the final three months of 2012 and into 2013.

September quarter retail sales and labour market data had been weaker than expected with unemployment rising from 6.8 per cent to 7.3 per cent. But Treasury said the underlying picture was not quite as weak as the headline results suggested. "The slowdown should be temporary, with the December quarter likely to rebound slightly and indicators pointing to a further pickup in 2013."

Ad Feedback

- The Dominion Post

Comments

Special offers
Opinion poll

Where do you stand on political coat-tail riding?

If it gets marginalised voices into Parliament, I'm for it.

I'm against it - if you don't get the votes, you shouldn't be there.

It's just part of the political game.

Vote Result

Related story: Voters reject riding on the coat-tails

Featured Promotions

Sponsored Content