By Bernard Hickey
Finance Minister Bill English has revealed Treasury will be forecasting annual GDP growth of between 2% to 4% over the next four years and that average wages are likely to rise a total of 20% from 2012 to 2018.
English delivered his set-piece pre-Budget speech to the Wellington Chamber of Commerce in a luncheon address. Budget 2014 is due on May 15.
He said Treasury had forecast GDP was likely to lift average wages by 20% to NZ$62,200 between 2012 and 2018 if the economy achieved its growth forecasts.
He said wages were likely to rise NZ$7,500 on average in the next four years to 2018, having risen NZ$3,000 on average in total over the last two years.
"Quarterly GDP or current account statistics are not, in themselves, what matter to families," English said.
"Jobs, higher incomes and opportunities to get ahead are what really matter. Everyone's situation is different and many families are still finding times are challenging. But the benefits of a sustainably growing economy are tangible and meaningful," English said.
"So if you take that six-year period as a whole, the average wage will have gone up NZ$10,500, or around 20%, compared to inflation of around 12 per cent over the same period," he said.
"The forecasts will also show around 170,000 more people will be working by 2018. Together with a falling unemployment rate, this will build on the 66,000 jobs created in the past year alone," he said.
English also confirmed John Key's announcement earlier in the month that the allowance for extra spending would be limited and unchanged at NZ$1 billion in Budget 2014.
"The Budget next month will be about thoughtful targeted spending, not a spend-up. It will invest in better healthcare, more effective education, safer communities and less welfare dependency," he said.
"This is the responsible thing to do. Imagine the effect on interest rates - and the rest of the economy - of a return to the NZ$3 billion-plus annual spending allowances we saw under the previous Labour government from 2005 to 2008," he said.
"By helping to restrict interest rate increases, the Government can make a significant and positive contribution to family budgets," he said.
"Every one percentage point movement in mortgage interest rates is worth around $40 a week - or $2,000 a year - for a family with a $200,000 mortgage. So when you hear politicians promising to ramp up spending to pay for expensive election promises, you should remember that this would come at a significant cost to households and businesses."
24 Comments
No AndrewJ, I hear the legal highs and other new fangled searching for fruit fly paraphanalia will be making up for lost taxes, via a growers levy, a manufacturers levy and vastly increased GST.
I also hear another plastic Wakka is on order for the GST portion to help in the search.
I also hear that Len has a new fruit machine on order, not sure if that is part and parcel for all Mayors or not and part of my first statement, overall.
I also hear that if we can sell coals to Newcastle, via Solid Energy, we may be able to make a killing selling new licences for exploration by an a Bridged version, tied to Conservation.
The cream on the cake will be when all MP's get a pay rise and that will be taxed offset, via the Cayman Islands to create a fund for the futures market.
Cause I think our futures is certain eh bro. No flies on us.
"The forecasts will also show around 170,000 more people will be working by 2018. Together with a falling unemployment rate, this will build on the 66,000 jobs created in the past year alone," he said."
No, that's a demand for 170,000 more jobs, really the bull droppings are coming thick and fast now...
regards
"sustainably growing economy" I would love to hear what his definition of this term is.
Well it's when you grow in a way that ... that it's like growing without getting bigger .. oh its um ah it's growing without using more stuff, no that doesn't make sense... um it was popular in focus groups we tested the phrase on.
Jobs, higher incomes and opportunities to get ahead are what really matter
Really? How about clean air, waterways and beaches, untainted food, a decent living environment (so Aucklanders don't see the ned to drive further and further north each year to reach 'paradise'), uncongested cities, a responsible immigration policy (notice how so many high wealth/skilled migrants are competing in unskilled work)?
didn't we have all this not so long ago??
I see English also had another go at the 'silly' local council planning rules. Good.
My pet peev is the requirement of a min of 2 car parks per dwelling. Why don't they keep going and require a helicoper pad for each new dwelling. About as useful to a lot of the poorer people who stuggle to buy groceries let alone own/maintain a car
Wow Simon - thanks for reminder.
In 4 years time Bill's "SETTINGS" will ensure that I will be.........
- Richer once every two weeks when the Superannuation (unfunded) arrives
- Able to have a Coronet Peak ski season pass for free
- free of all "Silly Local Body" rules.
I placed my order for my new helicopter today. Plan to flatten the roof to make the pad. Not sure about my licence - eyesight a bit muddled on the colours front. Might have to settle for the Jaycar model helicopter.
It is in the budget, available to everyone in the country. It isn't secret knowledge. That said, I think six years is a bit unfair on Treasury- anytime in recent history will cross 2008, and I don't think it is fair for them to have been expected to predict the GFC and its consequences. That said, like most governments, once you stop crossing the 2008 period, like most countries our treasury is rubbish at predicting growth outside of two years.
http://www.treasury.govt.nz/budget/2009/fsr/20.htm
The fastest and easiest place is the reserve bank key graphs
http://www.rbnz.govt.nz/statistics/key_graphs/graphdata.xls
Inflation is a double edge sword.
You appear richer, your houses also appears to worth something, but which ever way you cut it, you ain't, unless leveraged to the hilt and getting some other mug to pay down your tax deductible debt.
Now deflation is another story.
You are richer, your house you want is more affordable, even rent would be cheaper, but whichever way you cut it the over leverage and underwater bleeding idiots do not like it for some strange reason.
They might have to take a paper cut.
They might be in negative equity.
They might also have to get off their arse and work for a living and pay down the debt themselves, or they may have to cut their lifestyle.
Chance would be fine thing?.
The rules and rulers would have to change.
No bleeding fear of that.
Stats, above.
Compare below.
Comments are more in tune here below, on Stuff, with normal society. 131 in total.
Check them out.
Perhaps this is what you call a Stuff-up, Mr English, Mr Chaston.
Maybe this is where Wolly went and the others went, a "Reality Site".
Maybe more voters here, than you realise for the next election.
http://www.stuff.co.nz/business/money/9943984/A-7500-wage-rise-by-2018-…
Maybe National needs to get a better spin merchant.
Just commenting?. Just fact finding?.
No need to get in a tiz!.
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