$2b stripped out of Govt surplus
The Treasury is expecting the Government’s 2019 surplus to be $2 billion less than it had previously forecast due to “timing issues”.
It yesterday released its Half Yearly Economic and Fiscal Update (Hyefu), which showed the surplus was expected to be $1.7b in 2019.
At the May budget, the Treasury was expecting next year’s surplus to be $3.7b.
But the less-than-expected surplus is not a surprise, given Finance Minister Grant Robertson had said he expected “timing issues” to affect its size.
The timing issues were because some government departments, such as the Ministry of Transport, had deferred some spending, which made this year’s surplus higher than expected, but next year’s lower.
Robertson said just over $1b of expenditure was carried forward.
Although less than had been expected next year, the Treasury is forecasting the surplus to shoot up in the coming years, rising to $8.4b by 2023.
“Our careful management of the government books gives us the ability to make important investments in public services for all New Zealanders,” Robertson said.
The Hyefu numbers also show the Government is well on track to deliver on its Budget Responsibility Rules, especially in terms of getting its debt to 20 per cent of GDP by 2021/22.
The Treasury is now expecting net core Crown debt to fall to 19 per cent by that time.
But National Finance Spokeswoman Amy Adams said yesterday’s numbers show that $17.7b more in tax would be paid by 2022 than would have been under a National Government.
That figure is made up of adding all extra taxes the Government
had implemented – for example the Amazon Tax, the extension of the bright line test and petrol taxes – as well as factoring in the cancellation of National’s planned tax cuts, and comparing that with the books when National was in Government, she said.
Adams said this is not fair on New Zealanders, given Treasury had revised down its GDP expectations when compared with this year’s budget.
The Treasury is expecting net debt to fall even further in the following year to 17.4 per cent.
However, Robertson said
this figure was likely to change closer to the time.
Robertson said Hyefu showed the economy was in healthy shape and the Government was “managing the books carefully”.
“This is important given the warnings of growing risks around the volatility of the international growth outlook, which could feed through to the New Zealand economy.”
One particular risk, outlined by Treasury Secretary Gabriel Makhlouf, was the potential fall out of a bad Brexit.
No one can begrudge Ben Smith signing off his service to New Zealand after the World Cup.
Come next year he will be 33, and nearing a player’s twilight years when the time to cash in grows more apparent, more understandable, having dedicated so much of his life to Otago, the Highlanders and All Blacks.
Confirmation of Smith’s move to Pau, on what is thought to be a sevenmonth deal with another Japanese contract possibly to come, is expected to see the French club miss out on Ardie Savea who has been offered an improved deal by NZ Rugby.
Had the All Blacks and Hurricanes flanker, just 25, opted to leave it would have been a significant blow.
“Ardie is a little bit different. He’s younger,” NZ Rugby head of professional rugby Chris Lendrum told the Herald previously. “As we understand it that club has significant interest in him and we’re just working through that with him. Clearly we want him to stay.”
Contrastingly, Smith’s imminent move will be greeted with a shrug of the shoulders by many. He is approaching his second World Cup and turned down offshore riches at his last career juncture two years ago.
Having more than done his time, Smith deserves the chance to set up his family.
While Smith’s importance to the Highlanders, as co-captain, and the All Blacks’ youthful back three next year cannot be understated, his announcement should also provide pause to reflect on just how classy he has been.
Shifting seamlessly between fullback and wing for the All Blacks he has already defied age which claimed many a victim in the outside back division.
He refused to succumb to careerthreatening concussions, returning from a summer sabbatical in sparking form.
Aware of his future plans, Smith told the Herald on the recent northern tour he was learning to savour every last moment in the All Blacks and New Zealand rugby.
“You talk to a lot of the guys that are a bit older and they realise this doesn’t last forever,” Smith said on the eve of his third and last test in Ireland. “You’ve got to make the most of it and enjoy the ride a bit, too, because once it’s all done, you’ll look back and probably wish you could go back in a time machine
“I even probably took a minute against England at Twickenham to stop and think ‘how cool is this’? Whereas, early on, I probably didn’t appreciate it as much as I could have. It does fly by. It feels like the other day I was playing my first test. “I suppose you’re always looking at next week. As soon as the game finishes you’re straight into that preparation and process of making sure you can nail what you need to nail.
“Now you just appreciate being in the changing room, sitting down and talking to your mates over a beer or water. It’s about appreciating that time and what you’ve achieved. It’s important to take that time to reflect. You’ve always got Sunday to think about the following week.”
News of Smith’s departure next year comes with All Blacks captain Kieran Read in the sights of Parisbased Racing 92 and with Toulon to announce they have signed Nehe Milner-Skudder on a three-year deal from September next year.
A host of other All Blacks are also set to depart post-World Cup.
“We’ll be expecting some departures naturally at the end of the World Cup cycle,” Lendrum said. “The number of players you’re likely to see leave beyond that out of the All Blacks group doesn’t appear to be a significant number.”