New Zealand’s Robertson: Prudent to run surpluses, pay down debt

The International Monetary Fund’s (IMF) latest global economic forecasts highlight the importance of running budget surpluses and pay down debt, New Zealand’s Finance Minister Robertson said on Wednesday.

Key quotes (scoop.co.nz)

The International Monetary Fund’s (IMF) latest global economic forecasts are a timely reminder of why the Coalition Government is running surpluses, sensibly managing debt and focussing on policies to support growth.

The global growth downgrade by the IMF is a reminder of why the Government is ensuring the books are in order and strong enough to protect the economy and New Zealanders from any rainy day such as changes in the international economy.

The IMF’s Fiscal Monitor used New Zealand as an example of good practice for fiscal management. The IMF expects the New Zealand Government’s financial position to remain better than peers, including Australia, Canada, the UK, the US, and the Euro area, while our debt will remain lower than these other advanced economies.

It’s important to remember that the Government accounts are for the year ended 30 June 2018, and the better-than-expected surplus is in part due to one-off factors. Calls for ongoing increases in spending need to keep in mind that there first needs to be confidence that the better-than-expected results will continue year after year, as opposed to just being a one-off.

Due to the IMF’s comments today on the rising risks to the global economy, it’s prudent that we wait until the Treasury releases its next set of forecasts in mid-December.