15 FEBRUARY 2024
Speech: Address to the NZ Economics Forum
Glossary
1. Coalition Government 연립정부
6minutes (578words)
A year has passed since I was last before you, and the challenges the New Zealand economy faced then still loom large today. The good news is these days I don’t just get to talk about those challenges, today, I’m part of a new government with a massive opportunity to do something about them.
Since being sworn in two and a half months ago the coalition Government has been working hard to rebuild confidence in the economy and to restore fiscal discipline.
This work is essential and urgent.
We have inherited an unhappy mix of high inflation, high interest rates, a contracting economy, and rising unemployment.
The government books have deteriorated, with deficits since 2019/20 and a return to a wafer-thin surplus not forecast until 2026/27.
That’s before we consider the litany of fiscal risks, cliffs and unfunded commitments our Government has inherited from the outgoing administration.
Since the Half Year Update before Christmas, data revisions and outturns have thrown yet more doubt on both the growth trajectory for the New Zealand economy and the fiscal situation. That will be of concern to workers, families and businesses alike.
We are conscious that any worsening forecasts could well lead to a further decline in government revenue projections and a correspondingly weaker set of government books for us to work with.
Monthly updates may well bounce around a bit, but our cautious view is that the emerging data suggests it is highly unlikely that the full set of forecasts in May will deliver any upside surprises when compared to the Half Year Update.
But as Finance Minister, I am embracing the adage that every challenge contains opportunity.
Opportunity for our Government to better protect taxpayers’ money and purchasing power, opportunity to deliver better results from public services and opportunity to create the conditions needed to unlock New Zealand’s untapped growth potential.
I will be releasing a Budget Policy Statement on the 27th of March – you can expect these priorities to be reflected there. We will also take that opportunity to set out in more detail our short-term fiscal intentions and longer-term fiscal objectives before delivering our first Budget on the 30th of May.
The work of better economic management is already very much underway.
In our first 100 days the coalition Government is acting decisively to deliver a stronger foundation for New Zealand’s future economic performance.
We are acutely conscious that it is the strength of our economy that will determine the standard of living available to New Zealanders, their job and business opportunities, their purchasing power and the quality of public services they can rely on.
New Zealand can’t become richer by simply taxing, spending, borrowing and regulating more, instead we must grow the productive capacity of our economy.
In recent years, careless economic management by government has had a profoundly negative impact on New Zealanders’ living standards. Kiwis have endured a prolonged cost of living crisis as high inflation, high housing costs and rising interest rates have eaten away at their purchasing power.
That’s why you’ve seen us move swiftly to refocus the Reserve Bank on a single inflation-busting mandate. Getting inflation back to target is the essential foundation for sustainable economy recovery.
Kiwi workers have also experienced a period during which government has been spending at historically elevated levels without delivering any corresponding improvement in the public services it delivers. New Zealanders are paying higher average rates of personal tax and have little to show for it.