Last week, Reserve Bank Governor Alan Bollard forecast that the government would not make its target of a surplus by 2014/15. Now the government seems to be doing the groundwork for a formal abandonment of the target:
Prime Minister John Key says the European debt crisis is the biggest threat to the New Zealand economy.Key's words were repeated by Bill English in Parliament today, so this isn't just one of his blurts. The government is preparing to back off. So what do they have left? Returning to surplus was the core of their 2011 election strategy. What do they stand for now? Ministerial salaries and perks for Bill English rather than David Shearer?
He said he was less confident now than at the time of the May 24 Budget that New Zealand would get back into surplus by 2014-15 but insisted: "We won't let that target slip lightly."