What the Budget will Address

Per capita real GDP ...has shown no growth since the start of 2004… If average growth over the past six years had been the same as that of the preceding 15 years, per capita incomes would be 11% higher now.
Tradable and non-tradable output ...with tradable value-add falling 10% since 2004, taking it back to 2002 levels, while non-tradable value-add, especially government, continued to grow.
Real exports of goods and services Export growth has fallen to less than one-third of the previous trend… …and would today be $14 billion higher if the earlier trend had held.
Core Crown spending (excluding finance costs) The current level is over 6% of GDP (about $13 billion) above the 1994 to 2004 average. This has put substantial indirect pressure on exports.
Real exchange rate ...was at its highest five-year average since the 1960s over the second half of the 2000s… ...and was the key driver of the slowdown in export and tradable value-added growth.
Gap between short- and long-term interest rates Interest rates rose, with the Official Cash Rate (OCR) peaking at 8.25%, putting upwards pressure on the New Zealand dollar.
Housing equity withdrawal The surge in borrowing went further than just financing housing. It spilled over into general debt-fuelled consumption.
Household debt servicing Rising debt levels along with high interest rates meant more and more income went to debt servicing.