Government surplus

[Welshgirl]

I'll leave it to MB to find the relevant official story on this one but I just wanted to express my disbelief - I heard it on the news this morning that the Government have announced an annual surplus of 9 billion dollars - yes, that's right, 9 BILLION dollars!! In a country of 4 million odd people, that's a BIG surplus! And guess where apparently some of said surplus is going - not on tax cuts, not on health care, not on education - no, it will be going on Infrastructure

Jeez, what I could do with 9 billion dollars

[MotherBear]

Economy boost delivers $8.7b surplus
By VERNON SMALL - The Dominion Post | Thursday, 11 October 2007

New Zealand's better than expected economic performance delivered the Government a $8.7 billion operating surplus for the 2006/2007 financial year, but Finance Minister Michael Cullen says it is still uncertain when any tax cuts will be announced.

The final figure was more than $2 billion higher than forecast on budget night 2006 and included a cash surplus of $2.6 billion - $900 million higher than was expected as recently as the May Budget.

Finance Minister Michael Cullen said it left the Government in a comfortable position going into election year, but no formal consideration had been given to the size of any tax cuts that might be made. They would be considered as part of next year's budget.

The cash windfall - which Dr Cullen said amounted to about $500 million after taking into account spending that had only been delayed - would be used unspecified capital expenditure or infrastructure.

"I'm sure my colleagues will have many ways to spend that," he told reporters at the release of the financial statements this morning.

Treasury would do more work on the likely size of what looked like a structural increase in the revenue that would create greater "headroom" for more spending or tax cuts.

Treasury officials also outlined concerns that some departments had "overcooked" the amount they needed leading to underspending by year's end - which had helped inflate the final surplus.

The worst offender was health at about $500 million, though Dr Cullen said that had not led to fewer operations because the forecasts had included expected deficits which not come about.

He said the growing surplus was also the result of an economy which was running "stronger for longer" than forecast leading to increased tax revenue and lower spending on benefits.

"Allowing revenue to increase is consistent with our policy of letting the automatic stabilisers operate and looking through the temporary effects of the economic cycle."

The net result was the Government had removed demand from the economy.

"It would be difficult to argue that the Government is contributing to inflationary pressures."

From here .

[nickydwuk]

Wow - can they come over to the UK and give some advice to this government? They don't seem to be able to save their pocket money let alone the countries economy

[selchie]

Geez WG, you exaggerate so much. You were off by 300 mil . Taffy, you might want to confiscate her checkbook!

We could ask Dubya Bush to help solve that surplus problem - he would drive the NZ economy into a 9 billion deficit in no time!