March 28, 2024
Expectations lowered on budget spend
Finance Minister Nicola Willis is promising more funding for health, education and police in the May Budget, as well as movement on tax cuts at all levels.
Releasing her budget policy statement yesterday, Ms Willis did not reveal the Government’s operating allowance, but said it would be lower than the $3.5 billion set at the half year fiscal update.
There would be no new borrowing, but Government would continue to operate deficits for at least the next four years.
“Key frontline services like health, education and law and order will get more fnding, These frontline services are our priority for new spending and our budget will show that,” Ms Willis says.
Treasury expects growth to be $42.8 billion lower in the coming years than was estimated in the Half-Year Update (HYEFU) in December, with core tax revenue tracking about $4b lower by the 2027/28 year compared to that estimate.
The HYEFU had also estimated a 2026/27 return to an operating balance before gains and losses (OBEGAL) surplus, but that $4b lower revenue figure pushed the $3.4b surplus estimated for the 2027/28 year down to a $600m deficit instead.