PM Pre-Budget Press Conference - Volatility is Nothing New

Monday, 21 May 2012, 6:26 pm
Article: Mark P. Williams

At today’s post-cabinet press conference, the Prime Minister said that Thursday’s Budget would show that the Government is on track to post a small surplus in 2014-15. He commented briefly on current political and economic upheavals in Greece and the wider Eurozone economy, particularly Spain whose banks were downgraded last week. He also said that economic volatility was nothing new and it was important to differentiate whether these downs were expected or whether they were a sign of something more fundamental. He added that by investing in a commitment to reach surplus by 2015 the Government had taken a responsible fiscal policy.

He then addressed the announcements made today by Corrections Minister Anne Tolley and Associate Corrections Minister Pita Sharples at Rimutaka Prison to reprioritise funding for increasing education, skills and employment programmes, and drug and alcohol treatment for offenders. He added that around two thirds of offenders have drug or alcohol dependency and this is a significant driver of crime. He reiterated that these policies were part of the National led government’s target to reduce reoffending by 25% by 2017.

He then outlined House activities for the week and took questions.

Questions

The PM was asked how he thought this years’ Budget, as a second consecutive zero Budget, would be remembered by New Zealanders; he responded that he felt it would be remembered as sensible and considered, correctly addressing spending Health, Education, Science and Innovation.
He added, ‘If you spend more than you earn it’s called “Greece”, and I don’t think we want to end up in that position.’

The PM was asked about making changes to the superannuation age and flexible retirement policies.

The PM was then asked whether his Government’s fiscal policies would alter significantly if economic circumstances got significantly worse. In terms of capital gains tax and raising the age of superannuation, he said that his Government did not see any benefit in altering their policies; in terms of interest free student loans, Working for Families and Kiwisaver. He indicated that he would be reluctant to go after those areas. He was then asked if he would ‘trade off’ the surplus target if economic conditions worsened significantly—the PM responded that he did not wish to speculate on that at this time.

The PM was asked his responses to the Green Party’s analysis of current Government fiscal policy; he made clear that based on the advice he had received from the Treasury he disagreed with their analysis.

The PM was also asked to respond to Len Brown’s recent call for Government to pay its share of the Auckland rail link.

Asked whether he was personally optimistic about New Zealand's financial future he said he was as optimistic as anyone could be.

Click for big version.

© Scoop Media