Returning to surplus in 2014/15... ...and paying down debt
1. Responsibly managing the Government's finances
The Budget confirms the Government remains on track to post a surplus in 2014/15 and start to reduce government debt. We are achieving this while still spending a total of $5.1 billion on new initiatives in the current year and over the next four years in Budget 2013.
Return to surplus in 2014/15
- Total Crown operating balance before gains and losses (OBEGAL)
Expenditure returns to 30 per cent of GDP...
- Core Crown expenses and revenue
...and new Budget spending is set at sustainable levels
- New operating spending per Budget
Note: Excludes revenue initiatives.
We will reduce net core Crown debt to prudent levels...
- Net core Crown debt
...and run cash surpluses
- Core Crown residual cash
Running deficits, and taking on more debt, has been the appropriate response to the challenges the economy has faced and has cushioned New Zealanders and their families from major shocks. But this build up of debt cannot continue forever.
We have prioritised our goal of reducing government debt to prudent levels (20 per cent of GDP by 2020) by:
- Reducing operating allowances for new spending from $1.2 billion to $1.0 billion a year from Budget 2014, growing thereafter at 2 per cent each Budget.
- Delaying contributions to the NZ Super Fund until this debt target is reached (a delay of two years).
