Any speculation that the government is using an economic slow down to back away from meaningful investment needs to wait until after the Budget is released, Prime Minister Jacinda Ardern says.
Ardern was asked on Morning Report today if her government could be transformational with the slowing economy.
“We have always said that we cannot turn around underinvestment in one Budget. We cannot fix every underspend that we have had in one Budget. But we do believe we can start doing things differently, that it’s not enough to say that growth rates for our economy are a measure of success.
“We have to think about the health and wellbeing of our people and our environment. And so that’s the difference with this Budget compared to others. We have tried to take a long term view going beyond a three-year cycle, we’ve tried to break cycles of issues.
“But at the same time, we have also set ourselves some rules on debt, on running surpluses, we are meeting those this year as we did last, and that does mean we have to create that balance in what we do.”
Asked if she was concerned about a slowing economy and if the government had enough money to address the country’s issues, she said: “No, but that is a reason why of course we need to be focused on the kinds of investment that will assist with continuing growth at a good pace. You will have seen the IMF forecast around New Zealand relative to other countries we tend to compare ourselves too and … New Zealand actually sits favourably with all of those.”
She conceded that the country’s growth was slowing “in line with” those other countries.
“You can’t open a newspaper and not see the impacts of the trade tensions between the US and China, the impact of Brexit. There is uncertainty at the moment and it’s having an impact on everyone and that includes us.”
Ardern said that the government’s self-imposed budget responsibility rules until 2022 would “demonstrate that we can both balance the books and make the investment in New Zealand that we need to make”.
Ardern spoke of Minister of Finance, Grant Robertson, being asked about if there would be revision of core Crown spending relative to GDP beyond 2022 when the Budget responsibility rules expired.
“We simply are saying we haven’t given that consideration yet.”
When challenged that the government needed to signal in the upcoming Budget about money that would be spend in four years’ time, Ms Ardern said: “Certainly for the … debt track which is why you have now heard the minister of finance talking about what we would do beyond 2022. Which is then moving to that debt range of between 15 and 25 percent with a mid point of 20 which is where we are sitting at the moment.”
The Budget will be delivered on Thursday.