Bollard sees delayed surplus

Last updated 13:55 14/06/2012

Relevant offers


Cleaning product company The Green Stuff listed for sale with $1 reserve Rob Stock: Christmas comes but once a year... and it's in mid-October Troubled property developer Augustine Lau taken to court for toilets emptying into stream Budget Buster: Why are we donating millions to the taxman? Beer labels featuring cute cartoons appeal to minors, Alcohol Healthwatch says PM's scholarship for SC honey exporter keen on alternative markets New Plymouth businesses make their collaboration official with the launch of West End Precinct Research shows hope for Maori women's money lives. South Port appoints new director Clare Kearney New York enacts restrictions on Airbnb, with fines of up to $10,000

The Government will not return to surplus until two years after Treasury's 2014-15 estimated timeframe, according to Reserve Bank Governor Alan Bollard.

He was appearing before Parliament's finance and expenditure select committee following this morning's monetary policy statement which saw him hold interest rates steady at a record low 2.5 per cent.

In response to a question from Labour MP David Parker, Bollard agreed the delayed return to surplus would see government debt about $10 billion higher than currently forecast.

Bollard also told the committee that the economic outlook in Europe was so unclear it was not worth putting into a model.

"Instead it is the risk in the room," he said.

Announcing the interest rate decision earlier today, Bollard said the Reserve Bank was on high alert for the economic storm clouds in Europe and a weak picture in New Zealand.

The bank said the outlook for the country's trading partners had worsened and there was a small but growing risk that conditions in Europe will deteriorate more than expected.

"New Zealand's economic outlook has weakened a little since the March Monetary Policy Statement," Bollard said, adding that it "remains appropriate" for monetary policy to remain stimulatory with the official cash rate held at 2.5 per cent.

Ad Feedback

- Fairfax Media

Special offers

Featured Promotions

Sponsored Content