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Budget 2017 Home Page Fiscal Strategy Report - Budget 2017


The economic and fiscal outlook is positive. The Government is focused on making investments to support a growing economy and rebuilding its fiscal capacity to respond to future shocks.

The Government is on target to meet its fiscal objectives, operating surpluses are growing and net debt is on a downward trajectory with forecasts showing it falling below 20 per cent of GDP by 2020/21.

Budget 2017 provides for an increase in operating and capital spending allowances focused on investing in the public services and infrastructure required for a growing country, as well as addressing the implications of the Kaikōura earthquake.

Budget 2017 also includes the Family Incomes Package aimed at boosting the after tax incomes of low and middle income households and providing greater rewards for hard work. The Budget lifts the two lower income tax thresholds and implements targeted increases to the family tax credit component of Working for Families and the Accommodation Supplement.

To reflect the improvements to the fiscal outlook and the Government's intention to build fiscal resilience, the Government's long-term debt objective has been updated. The Government now aims to reduce net debt to between 10 per cent and 15 per cent of GDP by 2025, after the current target of around 20 per cent of GDP by 2020 has been achieved.

Reducing debt to this level will allow the Government to have the capacity to support New Zealand communities following a significant adverse economic shock or natural disaster.

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