Wait – I thought were heading towards surplus?

From stuff.co.nz

Quote: “The Government has posted a Budget deficit of $2.9 billion in the year to June 30, $338m worse than forecast in the pre-election opening of the books.

Finance Minister Bill English said the result was the third consecutive narrowing of the deficit before gains and losses (Obegal) and was further evidence careful fiscal management was producing consistent gains over time.

However it compared with the forecast deficit of $2b in the 2013 Budget.”

So – 2.9 billion dollar deficit and a miss of $338 million from just before the election? See here Bill English stating so on August the 19th. Link to National Party Website.

Also from the 2013 budget a miss of 900 million? That’s nearly out by a third and just short of a billion dollars. If I was employed by a business and continuously blew out the budget, I’d expect to be fired. Hey what’s 900 million dollars in the scheme of things though right?

Back to the article, quote: “English said it was possible revenue would continue to track below forecast in the current year.

Growth was expected to return to more normal levels, from the 3.9 per cent in the year to June, reflecting international economic conditions and lower dairy prices.”

So, immediately after stating that revenue would continue below forecast, a forecast he made just over a month ago, he goes and makes another forecast of 3.9% growth.

Quote: “Net debt was $59.9b or 26.2 per cent of gross domestic product. The value of assets increased $11.7b despite the asset sales programme.”

60 billion in debt – if we take NZ as having a population of 4 million for round figures sake that’s $15,000 per person in debt. Until we actually get a surplus – which I’ll predict right here and now that we never ever achieve – this amount will only increase.

Quote: “English said the economy faced some headwinds, including lower dairy prices, uncertain tax revenue, global risks in China and Europe and the impact of the Auckland housing market.”

I think he’s missed a few risks – namely war in the Middle East/Ukraine, risks in the United States and Japan, the development of BRICS nations making alliances to bypass traditional western nations and institutions. There are plenty of others also. What’s amazing to me though, is these risks have been obvious for a long time, even more so following 2008 – yet there’s no move to insulate our economy from outside shocks even to this day.