Crown accounts surplus, more pressure on spending booost

From the Beehive (Minister of Finance Grant Robertson): Govt accounts in surplus, debt remains low

The Government’s books are in good shape with the accounts in surplus and expenses close to forecast, Finance Minister Grant Robertson says.

The Treasury today released the Crown accounts for the five months to November.

The operating balance before gains and losses (OBEGAL) was above forecast by $0.7 billion resulting in a surplus of $100 million.

The variance is due to lower than forecast Core Crown expenses and higher than forecast revenue.

“While the month by month results do tend to fluctuate due to tax timing changes, it is pleasing to see this positive result,” Grant Robertson says.

“The surplus and low levels of debt show the fundamentals of the New Zealand economy remain strong.”

Net debt remains low at 20.1% of GDP, while expenses were within 0.6% of forecast.

Net investments gains of $3.6 billion were $1.3 billion above forecast, largely because of favourable changes in market prices.

“Our careful fiscal management has resulted in low government debt, which alongside record low borrowing costs has given us room to invest an extra $12 billion to future-proof New Zealand,” Grant Robertson says.

“This package of infrastructure projects will provide further support to boost the New Zealand economy in the face of slowing international growth and global headwinds.

“It will also give certainty to the construction industry about upcoming infrastructure projects and will create more opportunities for Kiwis.

“We’ll be announcing the specific projects in the near future,” Grant Robertson says.

I think we can expect some election year spending announcements on top of the proposed large spend on more infrastructure.

It will be interesting to see if they adjust the personal tax rates – part of the reason for rising revenue is tax bracket creep.

Grant Robertson has been a relatively low profile and uncontroversial finance minister, with most criticism coming from the left who want a lot more Government spending.

Like: Borrow, build, hold says Green co-leader

Government should hold onto the houses it has pledged to put out on the open market, Greens co-leader Marama Davidson says.

The Government taking on more debt for public housing would open up more opportunities than fully funding existing programmes like the Auckland Housing programme.

Davidson said a reluctance to ditch the Budget Responsibility Rules and take on debt is the reason those houses aren’t being provided to low-income tenants as part of a mixed tenure development scheme.

“We’ve got low borrowing rates, we’ve got expensive land, the Crown can borrow money. It can hold onto more of the houses it is building right now.”

Stuff:  Green Party scrap Budget Responsibility Rules

The Green Party is ditching its commitment to the restrictive Budget Responsibility Rules, which set targets for lowering government debt and spending.

The Greens first signed up to the rules ahead of the 2017 election while teaming up with Labour.

Labour retained a commitment to the rules, while signalling it wanted to somewhat loosen them next term.

So they may not move much on this until after this year’s election, if Labour and Greens get back into government, and NZ First don’t demand most of the extra spending.

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19 Comments

  1. David

     /  18th January 2020

    There are upwards of 20 newly approved drugs that Pharmac want to bring into circulation but there is no funding for them. Apparently we are at least 10 years behind Australia medicine wise so its advised one doesnt get cancer here…or epilepsy.

    Reply
    • Kitty Catkin

       /  18th January 2020

      There are drugs for both cancer and epilepsy here, and they are funded.

      The unfunded cancer drugs tend to have limited effectiveness and not prolong life to any great extent from the sound of it.

      But if people who believe that they are going to work want them, why don’t they buy them themselves if they can afford it ? Who’d let someone die because they didn’t want to sell the house ?

      Reply
    • Duker

       /  18th January 2020

      Around 40 people with epilepsy die suddenly every year …no matter what drugs they are on. Its just they way it is with a serious medical condition.
      And those other drugs, as KK rightly pointed out have limited effectiveness, a portion of those patients during trials ‘might get’ 3 months extra ‘ life …as a statistical thing ie its a slight edge of those living slightly longer over those dieing a bit earlier. Thats the drug makers own trials which you might have to take with a pinch of salt.
      Some doctors are like lawyers who take on weak cases, they pump up the chances of sucess.
      yes the negative side for NZ is always highlighted but the other side doesnt get mentioned

      https://www.pharmac.govt.nz/tools-resources/research/mind-the-gap/

      Reply
      • Kitty Catkin

         /  18th January 2020

        When we first began to hear about the cancer drugs that were not funded, it was made to sound as if the then government and Pharmac didn’t care. Then we heard about the limited effectiveness of them. They seemed to be giving false hope.

        I do know what it’s like to lose someone to cancer, by the way. No doubt the PDTs will chortle and downtick this.

        Reply
      • David

         /  18th January 2020

        35 cancer medicines, that is huge and that is only one disease. We are a decade behind in diabetes drugs despite being one of the fattest folk on earth.
        We have no access to drugs across the board that are prescribed to other similar nations as per normal. Our drug budget is pretty much the smallest in the developed world, under both parties.

        Reply
    • Blazer

       /  19th January 2020

      the surplus is a reflection on just what sound financial managers this Govt is.

      They are a safe pair of hands and have been very pragmatic.
      Hopefully they will prevail in the next and subsequent elections.
      NZ needs a Govt that recognises issues and acts on them.

      After 9 years of kick the can down the road,we can at last look forward to…a brighter future.
      In fact we may well be on…the cusp of something…special.

      Reply
  2. David

     /  18th January 2020

    Brother is a Doctor/consultant so it’s kinda first hand, keep deluding yourself that Pharmac and it’s underfunding is just a myth perpetuated by big Pharma. Still got my British passport and my private medical insurance while NZ prostrates itself at the feet of the omnipotent Pharmac who Ardern failed to fund properly despite her surplus.

    Reply
    • Blazer

       /  19th January 2020

      never heard you squeak when Pharmac was under funded for …9 years.

      Reply
      • Pharmac has always been ‘under funded’ – that is, has had a budget that’s less than they could spend to meet demands for drugs.

        As Pharmac says:

        We work hard to give New Zealanders access to medicines and medical equipment they need to live healthy lives.

        Medicines and medical equipment can cost a lot of money. We have a fixed budget to spend in the most cost-effective way possible. We do this by bargaining with drug companies to keep prices down.

        Experienced doctors and medical staff look at how effective different medicines are across different medical conditions and help us decide what to fund.

        https://www.pharmac.govt.nz/about/

        Economic considerations are also important. We look carefully at whether buying a particular medicine or device is the best
        way to spend part of the fixed budget.

        Our job involves weighing up all these different considerations, and seeking the relevant external advice and feedback, to help us come to a decision.

        https://www.pharmac.govt.nz/about/your-guide-to-pharmac/factsheet-04-making-funding-decisions/

        Reply
        • Kitty Catkin

           /  19th January 2020

          Someone on another blog berated me for buying antihistamines myself from Chemist Warehouse rather than having them prescribed.Why should other people pay for these? They’re paying for all the things that I do have on prescription ! If anyone doesn’t know Chemist Warehouse, they are much cheaper for most things; e.g. $4 for 100 ibupofen.

          Reply
    • Pink David

       /  20th January 2020

      “Still got my British passport and my private medical insurance while NZ prostrates itself at the feet of the omnipotent Pharmac who Ardern failed to fund properly despite her surplus.”

      The UK has a version of Pharmac, called NICE. All publicly funded health services are based on some form of rationing of care.

      Reply
  3. Kitty Catkin

     /  19th January 2020

    I read that the number of people needing houses is well up. No sign of Labour doing anything and no empathy face from the PM.

    Reply
    • Blazer

       /  19th January 2020

      did you read that did you!

      National layed the foundations for this housing crisis and cemented in its pro longued effects.
      The top 10 property owners in Parliament are all National M.P’s.

      Hopefully we will get another Labour or COL Govt next election that can grow some balls and take on the FIRE economy lobby…their venal self interest has compromised the future of young NZ’ers.

      Reply
      • Alan Wilkinson

         /  20th January 2020

        National layed the foundations for this housing crisis and cemented in its pro longued effects.

        Usual b.s. from B. House prices took off under Clark after Labour made councils responsible for quality and durability via the Building Act and strangled land supply via the RMA.

        Reply
        • Blazer

           /  20th January 2020

          keep regurgitating the same rubbish Al…we’ve been over the RMA before…National refused to act…period.

          Reply
          • Alan Wilkinson

             /  20th January 2020

            You really are a hopeless Lefty troll, B. Makes me wonder what your life is like when you have such a pig-headed disregard for obvious facts.

            Reply
            • Blazer

               /  20th January 2020

              we have proven the fact that National had the numbers in 2008 to reform the RMA…and couldn’t be arsed.

              High country lease legislation to enrich their mates had…priority.

            • Alan Wilkinson

               /  21st January 2020

              Fatuous drivel from a continuously spouting fool. Two other major crises had to be managed leaving no time to do a complete revolution of planning and building legislation.

            • Blazer

               /  21st January 2020

              ‘ leaving no time ‘=laughable,wafer thin excuse given 1-they had the previous 9 years to formulate reform-2-had time to rush through legislation to enrich…themselves.

              Own it,eat it,wear it,you perennial lemon sucking right wing shill.

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