Friday, May 20, 2011
In a budget remarkably similar to that presented last week by the Gillard government, NZ Finance Minister Bill English pledged yesterday to spend $NZ5.5 billion ($A4.1 billion) to rebuild Christchurch from the devastation of its two earthquakes.
Yet he also brought forward his pledge to end the budget deficit to 2014-15, two years later than Australia plans to get there.
Mr English said NZ's deficit in 2010-11 would blow out to $NZ16.7 billion or 8.4 per cent of its GDP, partly due to the earthquakes, but halve in 2011-12, and the budget would be in surplus by 2015.
But that goal rests on optimistic forecasts of three years of strong growth, and big spending cuts in five areas:
Better-off families will lose family benefits or have them cut, while families with older teenagers will get higher benefits reforms almost identical to those planned by Labor here.
The huge subsidy to NZ's superannuation scheme, KiwiSaver, will be halved, with employers and workers each required to lift their contributions from 2 per cent of wages to 3 per cent.
New Zealanders living overseas will have to start repaying their HECS-style student loans after a year away (instead of three years).
Minority stakes will be sold off in electricity generators Mighty River Power, Genesis Energy, Meridian Energy and Solid Energy, as well as Air New Zealand.
As in Australia (and Victoria), the government has chosen invisible spending cuts by giving departments less money to do their jobs and leaving them to decide what to cut.
And as in Australia, Mr English said NZ would use most of the money for new spending in health, education and rolling out broadband and transport infrastructure.