The PREFU isn’t pretty

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.

Other views:

Keeping Stock, No Minister,  Kiwiblog and No Right Turn

2 Responses to The PREFU isn’t pretty

  1. HenryB says:

    Well actually, neither the academics nor the businessmen but someone who has parchuted in from Merrill Lynch, the great bastions of financial probity and prudence.

    Like

  2. Mr Dennis says:

    You’re dead right that we need a National-led government to get us through this mess. But it would be a sad day for NZ if they were able to rule alone, without having their policies improved by some minor parties, based on the current wishy-washy policies National is offering.

    Like

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