- As expected, Budget 2017 shows the Government’s books are very healthy.
- Also as expected, the Government has chosen to lift the income tax thresholds.
- However, there remains a streak of conservatism, particularly in the focus on long-term debt reduction.
As the pre-Budget hints suggested, the focus of policy initiatives was very much on assisting low-income earners and low-income families.
Standing back the picture is very healthy. The nominal growth outlook has improved since 2016, boosted by the return of some long-absent inflation. And the Government has outlined how it intends to share some of these gains with Kiwis and, in particular, families.
However, could they do more? We think so, particularly as there is scope to debate how far net debt needs to fall over the long term. Will they do more? Possibly. After all there are still four months until the election and these healthy books mean that the Government will still have options up its sleeve during the election campaign.
ASB is Kea’s Global Banking Partner, helping New Zealanders achieve their international ambitions. ASB is excited to specifically support the Kea Connect service, connecting Kiwi businesses with experts around the world that can help them grow.