The key budgetary points are:
•Economy in good shape, outlook positive; annual budget responsible and supportive
•Fiscal path unchanged, reaching surplus taking longer, no fears of double dip deficit
•Will not cut services and programmes to chase budget surplus
•Govt surplus of NZD$176m in year to June 2016 vs prior forecast NZD$565m
•Annual economic growth to average 2.8 percent over next four years
•GDP growth seen at 3.1% in year to March 2016 vs prior view of 3.4%
•Current account deficit peaking at 5.6% of GDP in year to March 2016
•Low dairy prices headwind for economy, global uncertainties remain
•NZD TWI expected to rise to 77.90 in Q1 2016 vs 75.82 currently
•Dairy prices are forecast to recover in 2H 2015
•Low inflation reducing tax take, but keeping down interest rates for longer
•Expects up to NZD$2.5 bln available for modest tax cuts in 2017 if conditions allow
•Annual budget commits NZD$790 mln to support low income families
•Cuts retirement savings incentive, imposes new border security levy on travellers
•No budget surplus until 2018 if export prices have major fall
•Higher budget surpluses if domestic demand stronger than expected
•Recent developments raise prospect of interest rate reductions in coming year
•Net migration expected to peak at 57,000, before returning to 12,000 in 2017
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The NZD is a little higher in immediate response.
For more information, please refer to this
Current indicative levels are:
NZDUSD 0.7315 / 0.7340
NZDAUD 0.9260 / 0.9285
NZDEUR 0.6575 / 0.6600
NZDGBP 0.5065 / 0.5090
NZDJPY 88.60 / 88.85
ENDS