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
•
The NZD is a little higher in immediate response.

For more information, please refer to this
link: http://www.treasury.govt.nz/budget/2015.

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

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