So, one week after the election and extra rosy Treasury is already rowing back on its predictions.
The deficit is widening as tax takes are down. By $131 million in July-October. The operating deficit was $7.45 billion, almost 20 per cent worse than forecast in the pre-election fiscal and economic update.
Cheer up Bill English:
“the local economy is continuing to grow, with higher than forecast corporate tax revenue,” Finance Minister Bill English said in a statement. “But getting back to surplus won’t be easy. In many ways, restraint in the public sector has only just started.”
By ‘restraint’ read ‘job losses’.
Oh except, that growing local economy? Treasury is downgrading their forecasts there too. As did the OECD did last week, when the NZIER also cut their forecast growth to 1.5%.
John Key is typically relaxed and optimistic. I guess we’ll just have to see how far that gets us.