Treasury may reassess its Budget 2012 forecasts before December's half-year update after more recent Reserve Bank forecasts picked a weaker course for the New Zealand economy over the next four years, Prime Minister John Key says.
Reserve Bank GDP forecasts in its June Monetary Policy Statement released last week for the March years 2012-2015 were between 40 and 150 basis points below Treasury's picks in its May Budget. On top of that, the Reserve Bank picked the Government would not return its books to surplus until two years after Treasury's 2014/15 pick.
Speaking to media at his post-Cabinet press conference on Monday afternoon, Key said there had been discussions within Treasury whether to release an updated set of forecasts before its half-year update due in December.
“There’s certainly a recognition that there is a difference between the two sets of numbers, primarily in the 2015 year, where they’re quite a long way apart," Key said.
Small differences in assumptions often had quite big impacts on forecasts over time.
“Things are moving around so much, it’s always possible they might have a look earlier; [Treasury] may just wait until their half-year update, I’m not sure," Key said.
“I think they’ll be thinking about why they’re so far away from the Reserve Bank’s, but let’s wait and see," he said.
1 Comments
“Things are moving around so much, it’s always possible they might have a look earlier; [Treasury] may just wait until their half-year update, I’m not sure," Key said.
“I think they’ll be thinking about why they’re so far away from the Reserve Bank’s, but let’s wait and see," he said.
Once again as another poster mentioned a few days ago - it's as if the Government would have us think they've got nothing to do with running the country. Surely, Key/English should be instructing Treasury to re-do the forecast urgently.
I think the reason Key talks about a "wait and see" reveals the political game they play. Treasury did the forecasting as instructed by Government which allowed the Government to release the expenditure plan it intended .. knowing full well that the underlying assumptions were pure fiction.
As I've always thought - we'll only begin to address issues in the real world when the first negative growth budget gets written.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.