What recent reports has the Minister of Finance received on the Government’s accounts?

Speeches
Wednesday, July 6, 2016

STUART SMITH to the Minister of Finance: What recent reports has he received on the Government’s accounts?

Hon STEVEN JOYCE (Acting Minister of Finance): Yesterday the Government released its financial statements for the 11 months to May. These results show a $2.3 billion surplus in the operating balance before gains and losses, or OBEGAL, $321 million better than forecast. This is the largest full or part-year surplus since before the global financial crisis.

Core Crown revenue was $364 million higher than forecast, largely due to core Crown tax revenue being $396 million higher than forecast by Treasury in May. Financial statements for the full 2015-16 year will be published in October.

Stuart Smith: What do the latest monthly accounts mean for the financial results for the full 2015-16 year?

Hon STEVEN JOYCE: The Government has been successful in turning an $18.4 billion deficit in 2011 into a surplus last year. Treasury’s latest forecast for the full financial year 2015-16 is for another modest surplus of $668 million.

Treasury considers that the current strength in tax revenue is likely to persist, providing an upside risk to the final 2015-16 year-end out-turn. This trend is encouraging.

However, as in previous years, we expect growth in expenditure to outpace tax revenue in June, although year-end valuations will also affect the June result.

As I said, we will know the final surplus figure for 2015-16 when the Government’s annual accounts are issued later this year.

Stuart Smith: What are the Government’s fiscal priorities now that it has delivered on its election promise and made a surplus in the 2014-15 year?

Hon STEVEN JOYCE: With the books in surplus, the Government has choices. The Government’s focus is on paying down debt that was built up through the global financial crisis and Canterbury earthquakes. That will give the Government more room to support New Zealanders and the economy, should we face another economic shock or natural disaster.

The Government is on track to achieve its fiscal priorities over the next few years, which are: maintaining rising operating surpluses; reducing net debt to around 20 percent of GDP by 2020; beginning to reduce income taxes, if economic and fiscal conditions allow; and using any further fiscal headroom to reduce debt faster.

Stuart Smith: How has the Government’s focus on targets helped deliver better public services to New Zealanders?

Hon STEVEN JOYCE: The Prime Minister set 10 challenging targets for public services in 2012. That is because we want results from spending, rather than just simply throwing money at problems.

Benefit dependency continues to fall; we have made significant progress on crime; we currently have the lowest crime rate since 1978; we have reduced the number of children and young people experiencing physical abuse; and immunisation rates continue to grow, with almost 94 percent of 8-month-olds fully vaccinated.

This is a Government that measures success by the results it achieves, not by the amount of money we spend, or by how much Opposition MPs yell.