Budget 2018: The gift that keeps on giving – our economy
Underlying economic indicators strong as Government pivots to ensuring Kiwi wellbeing
Wellington, 17 May 2018 – Deloitte CEO Thomas Pippos says that the rivers of gold may have started to run in Australia but New Zealand isn’t looking too shabby either.
Treasury predictions announced in Budget 2018 are that in 4 years the Government will have $23b more to spend each year than what it has today. A whopping 31% increase.
Mr Pippos says traditionally this type of detail would be front and centre of a budget and it no doubt would have been had the previous Government remained on the treasury benches.
“But there is no point dwelling on the economy that the Government inherited, but rather on the journey to wellbeing that the new Government has more than visibly pivoted to. Not a surprise and similarly not a criticism, as the economy is projected to be the gift that keeps on giving with growth rates the envy of many of our trading partners,” says Mr Pippos.
“Now the thing with the golden goose that is our economy, and accepting that it could always shine more brightly and from more angles, is that it can’t be taken for granted. Revenue projections don’t factor a shock, not that they can, but some form of economic shock will occur at some stage,” he adds.
Budget 2018 presents the economic outlook as generally pretty healthy. It provides the Government with choices including headroom to deal with a shock. While the Government has kept its powder dry in terms of some of the key destinations, it has signalled a material pivot to how it will measure success (being wellbeing) which includes addressing what it has coined social and infrastructure deficits.
As budgets go, the Minister had a much easier run than many of his global colleagues facing their first budget.
“It’s an enviable and in some respects unprecedented position for a new Government. Having money to spend and popular things to spend it on. The hardest decisions were around who should get what. And the greatest disappointments were generally that those that got, didn’t get enough or what they wanted,” concludes Mr Pippos.
For Deloitte’s full Budget 2018 commentary and analysis go to www.deloitte.com/nz/2018budget.