Thanks to Ruth Richardson we don’t have to wait until after the election to find out the state of the nation’s books.
She is responsible for the requirement to have a pre-election economic and fiscal update (PREFU) so we all know that the fair weather Finance Minsiter has left the cupboard bare.
The executive summary says:
We are now expecting weaker economic growth over the next few years, resulting in slower growth in tax revenue and higher government expenditure. Combined with increases in the costs of some existing policies, these factors lead to sustained operating balance deficits and higher debt-to-GDP ratios.
The economic outlook is weaker …
Imbalances have built up during nearly a decade of sustained growth, including inflation pressures, an overvalued housing market, high household debt and a large current account deficit, with implications for interest rates and the exchange rate. With the economy slowing, these imbalances are starting to unwind – as are imbalances in the global economy – but there is a long way to go.
And who will we trust to take us there? The academics who helped get us into the mess by focussing on redistribution, or the business people with the knowledge and skills to get us out of it with policies which focus on growth.