Cullen welcomes IMF report on NZ

Finance Minister Michael Cullen today welcomed the latest IMF report on New Zealand, saying it represented a substantial endorsement of the government’s fiscal strategy.

“The IMF notes that the New Zealand economy, after performing strongly for the last three years, will slow this year in response to weaker world growth but that our medium term economic prospects remain favourable and that we are well-placed to absorb any external shocks.

“It commends the recent changes to the Reserve Bank PTA, supports the objectives of the Growth and Innovation Framework and applauds the government’s cautious fiscal approach - particularly the decision to defer any significant increases in spending until we are clearer about what proportion of the surpluses are structural and how much fiscal headroom we have,” Dr Cullen said.

“The IMF emphasises the importance of anticipating the cost pressures created by an aging population. I agree. That is, after all, the rationale behind the New Zealand Superannuation Fund.

“But although there is significant agreement across many issues, our differences remain as is evident in the IMF’s continued advocacy of time-limited benefits, income tested pensions and radical labour market deregulation,” Dr Cullen said.

The IMF report can be accessed at http://www.imf.org

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