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\nFinance Minister Nicola Willis speaking at the Half Year Economic and Fiscal Update.
\nPhoto: RNZ\n<\/p>\n
Finance Minister Nicola Willis is doubling down on her “disciplined” plan for returning the books to surplus – despite new forecasts delaying it by yet another year<\/a>.<\/p>\n And she took aim at those advocating for sharper spending cuts, such as the Taxpayers’ Union, warning that that prescription would deliver “human misery”.<\/p>\n “We are sticking to our strategy,” Willis said. “Not over-reacting to movements in the forecasts.”<\/p>\n Treasury’s half-year update, published on Tuesday, predicted a return to surplus in 2029\/30 – a year later than its forecasts<\/a> in May. That’s using the coalition’s new OBEGALx calculation which excludes ACC.<\/p>\n “I wouldn’t get too wound up about small changes,” Willis told reporters. She said she would continue to aim for a surplus by 2028\/29.<\/p>\n “We are on target to return the books to surplus faster than Australia, the United Kingdom, Canada and many other advanced economies, while maintaining a prudent debt position.”<\/p>\n In her budget policy statement, released alongside Treasury’s update, Willis confirmed she would stick to her previously signalled operating allowance of $2.4 billion.<\/p>\n \nTreasury Secretary Iain Rennie Existing pre-commitments meant that left just $1b a year on average for spending on new initiatives in next year’s Budget.<\/p>\n “Most agencies and ministers will need to plan to manage service pressures and other commitments with little or no additional funding,” Willis said.<\/p>\n Willis noted the downward revisions to forecasts were “relatively modest” but acknowledged they followed a similar trend over the past two years due to factors “outside the government’s direct control”.<\/p>\n The Taxpayers’ Union last week launched a campaign calling for Willis to cut public spending<\/a> and debt more aggressively, accusing her of simply continuing the previous Labour government’s “sugar-rush economics”.<\/p>\n It prompted Willis to throw down the gauntlet, challenging its chair Ruth Richardson – a former finance minister – to debate her “anytime, anywhere”<\/a> on the government’s finances.<\/p>\n The two have since been locked in negotiations over the conditions for the debate<\/a>, including time, location and moderator.<\/a><\/p>\n Speaking on Tuesday, Willis said she had no update on that showdown but was still up for the debate.<\/p>\n “The offer is there. Thursday afternoon, I’m available. Friday morning, I’m available. I don’t really care who the moderator is. If they want to turn up, I’m ready.”<\/p>\n Willis explicitly nodded to the “shorter, sharper fiscal consolidation” being advocated by the Taxpayers’ Union.<\/p>\n She said while that would speed up the return to surplus, it could also hurt frontline public services and depress already-weak demand in a recovering economy.<\/p>\n Willis pointed out that the Taxpayers’ Union proposed scrapping all Working for Families tax credits, reducing recipients’ average weekly incomes by about $180.<\/p>\n She said beneficiaries and low-income families would bear the brunt of that change, delivering “a level of human misery” that she was not prepared to tolerate.<\/p>\n Willis said, on the other hand, Labour’s approach to spending was “reckless” and would further delay a return to surplus.<\/p>\n She said the government had delivered about $11b a year in savings during its term.<\/p>\n “Without this disciplined approach, this year’s deficit would be $25 billion and debt would be on track to blow out to 59 percent of GDP,” she said.<\/p>\n Willis promised to release more details to prove that: “We have the receipts.”<\/p>\n<\/p>\n
\nPhoto: RNZ\n<\/p>\n