NZ Budget Deficit Revisions Give Parties More Room for Campaign Spending
New Zealand's pre-election budget is looking rosier than expected, giving parties more room for campaign spending. However, Finance Minister Nicola Willis has promised to keep a tight fiscal leash and return to surplus next term.
The government's pre-election economic and fiscal outlook (PREFU) showed an improved picture compared to the May budget. The budget deficit has been reduced from NZ$11.9 billion to NZ$8.6 billion, and next year's forecast deficit of NZ$11.4 billion has been revised to NZ$6.8 billion.
Willis hailed the fiscal improvement as 'welcome news', saying it frees up more money for essential services and prepares the country for future global events. However, she warned against treating the improved budget as a reason to increase spending, citing the ongoing US-Iran conflict and its impact on New Zealand's economy.
The opposition Labour party has delayed releasing election policy costings until after the PREFU was released, with National accusing them of having NZ$18 billion in unfunded promises. Labour finance spokeswoman Barbara Edmonds promised to publish a fiscal plan that includes a return to surplus since 2018/19.