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Source: New Zealand Parliament – Hansard

Question No. 2—Finance

2. BARBARA EDMONDS (Labour—Mana) to the Minister of Finance: Fakaalofa lahi atu, Mr Speaker. What recent reports has he seen on the New Zealand economy?

Hon GRANT ROBERTSON (Minister of Finance): Stats New Zealand today reported that the Consumers Price Index was 2.2 percent in the September quarter, taking the annual inflation rate to 7.2 percent, down from 7.3 percent in the previous quarter for an annual rate. This drop is not as much as economists had been predicting. High construction and housing costs and rates drove the annual figure, while quarterly numbers were affected by spikes in food and the cost of international travel. As I’ve said previously in this House, we recognise that this is a tough period for many households and businesses, and that is why we have provided significant targeted support and will continue to provide that to help New Zealanders weather these conditions. Inflation continues to be a global challenge, with the UK’s inflation rate near 10 percent and projected to rise considerably higher, the US at 8.2 percent, and Australia projected to be at 7.75 percent by the end of the year. New Zealand is in fact the tenth lowest in the 38-nation OECD statistics. Supply constraints are easing, including the approval of more than 60,000 positions for overseas recruitment to help address workforce pressures.

Barbara Edmonds: What reports has he seen on the state of the Government’s books?

Hon GRANT ROBERTSON: For the year to the end of June, the operating balance before gains and losses, the OBEGAL deficit, was $9.7 billion—around half of the $19 billion forecast in the Budget in 2022 in May. Net debt ended the year at 17.2 percent of GDP, in line with Budget forecasts, and this is one of the lowest levels in the OECD and well below the Government’s debt ceiling of 30 percent, ensuring we are well positioned to weather future economic shocks. New Zealand is in a strong fiscal position as we face a number of global challenges.

Barbara Edmonds: What else did the report say on the impact of the economy on the Government’s books?

Hon GRANT ROBERTSON: The economy performed well in the year to June 2022 due to the Government’s strong health response to the Delta and Omicron outbreaks. Core Crown revenue was 4.1 percent ahead of forecast at $117.5 billion as the strong economic recovery boosted business results, led to more people in work, which contributed to that higher tax revenue. Core Crown expenses were 2.2 percent below forecast as our successful COVID response meant allocated pandemic-related spending was not required in full. Some of those expenses, like ongoing investment in protections such as therapeutics and vaccines, will shift into the current fiscal year.