1. Responsibly managing the Government's finances
The build-up in government debt over recent years has been appropriate to absorb much of the shock of the recession, the global financial crisis and the Canterbury earthquakes.
However, that debt build-up could only ever be temporary. Budget 2012 shows the Government is on track to post an operating surplus in 2014/15 and start bringing debt down to more prudent levels.
This allows the Government to build New Zealand's resilience to future shocks, help lift national savings, keep interest rates lower for longer and reduce future finance costs.
- Operating Balance before Gains and Losses (OBEGAL)
Budget 2012 assists the return to surplus by offsetting new spending with savings and new revenue.
- Total operating impact of Budget 2012
Note: 'Total operating impact' covers expenses, reprioritisation and revenue over 2011/12 to 2015/16.
Returning to surplus will allow the Government to bring forward debt repayment...
- Core Crown net debt (June years)
...allow the Government's balance sheet to start growing in value again...
- Crown net worth
...and will free up resources for the tradable sector.
- Core Crown expenses (including earthquake expenses)
Note: The "core Crown" includes all departments, offices of Parliament, the Reserve Bank and the New Zealand Superannuation Fund. The "total Crown" adds SOEs, Crown Entities and other orgaisations named or described in Schedule 4 of the Public Finance Act 1989.
