The Pre-election Economic and Fiscal update (Prefu) shows that National has the government’s books back on track to surplus.
But it’s wafer thin and Treasury Secretary Gabriel Makhlouf was blunt about the need for continued discipline:
. . . Forecast to grow at an average of 2.8 per cent over the next four years, Makhlouf said this was “above its sustainable long-term capacity to grow”, meaning inflationary pressure on the economy was building with a strong residential housing market in Auckland and Christchurch.
“It underlines, among other things, the importance of fiscal restraint in a growing economy,” Makhlouf said. . .
New Zealand has had an unfortunate history of going from bust to short-lived boom.
Only by continuing to keep a tight rein on spending will growth be sustainable.
Labour and the Green Party are already pledging to spend $28 billion. If they’re in government there will be expensive policies from New Zealand First, Internet Mana and which ever other party or parties they need to cobble together to get a majority.
Only a National-led government will keep on track to deliver sustainable growth and provide the social and environmental dividends that will enable.