Wellington (AFP) May 17, 2011
Prime Minister John Key has vowed to shore up government finances hit by the devastating Christchurch earthquakes in the New Zealand budget rather than making big-spending pre-election promises.
With the country facing a NZ$15 billion ($11.7 billion) bill from the quakes in September and February -- the second of which claimed 181 lives -- Key said fiscal responsibility was needed in Thursday's annual budget.
He said the conservative National Party-led government, which goes to the polls on November 26, could not afford the vote-winning sweeteners usually included in an election-year budget.
"When you see the budget on Thursday, it screams responsibility," he said.
"If we had been irresponsible, we'd be going into the election promising lots of things with money we don't have.
"Actually, we've come through the worst recession since the Great Depression, two enormous earthquakes in Christchurch and a collapse in the finance sector in New Zealand and we're going to deliver a pretty good set of books."
New Zealand was already struggling to shake off the impact of a lengthy recession before the quakes razed much of its second largest city, prompting concerns from international credit rating agencies about rising debt levels.
In response, Key has promised a "zero spend" budget where the cost of new initiatives must be offset by cuts to existing programmes to rein in a government operating deficit set to reach a record NZ$16-17 billion this year. He has signalled the budget will contain cuts to retirement subsidies, middle-class welfare payments and public service jobs in a bid to get the budget back into surplus.
Other debt-busting measures under consideration include a further reduction in the government's 74.6 percent stake in Air New Zealand and the partial privatisation of state-owned energy assets.
"This budget is a careful balancing act," Key said.
"On one hand, we must and will show a clear path back to surplus and lower government debt position over time. On the other hand, if we were to slash expenditure irresponsibly it would snuff out our hard-fought recovery."
For all the talk of fiscal responsibility and maintaining New Zealand's AA+ credit rating, analysts say the National Party will be careful the budget does not jeopardise its popularity ahead of the general election.
National leads the main opposition Labour Party 57.5 percent to 27.1 percent, according to a TV3 Reid Research poll taken in mid-April, giving it a huge buffer as it seeks a second term in office.
TD Securities senior strategist Roland Randall noted that Key had already said major policy changes would not be implemented until after the election, minimising the chances of alienating voters.
"This budget will not be about policy changes... this will be used as a launch pad for a campaign which will take the government to the general election on November 26," he told Dow Jones Newswires.
Share This Article With Planet Earth
Bringing Order To A World Of Disasters
A world of storm and tempest
When the Earth Quakes
Mashiko, Japan (AFP) May 15, 2011
Japan's massive earthquake crushed many of Mashiko's ancient pottery kilns and left its world-famous ceramics in shards, but two months on, its craftsmen are picking up the pieces. The picturesque town, as rustic as the ceramics it has fired for generations, was shaken hard by the March 11 quake, but now the potters of Mashiko are seeing a silver lining despite continuing aftershocks. Wo ... read more
Japan's nuclear crisis timetable on track: PM|
Doctors defy radiation woes in Japan's Fukushima
New Zealand budget to focus on quake bill: PM
Japan's TEPCO says shutdown plan on schedule
How to control complex networks
Video gaming teens sleep less: study
Mixing fluids efficiently in confined spaces: Let the fingers do the working
When is it worth the cost of remanufacturing
Foothill yellow-legged frog provides insight on river management
Salinity in Outer Banks wells traced to fossil seawater
Salinity in Outer Banks wells traced to fossil seawater
Water for Mongolia
Denmark plans claim to North Pole seabed: foreign minister
Ecological impact on Canada's Arctic coastline linked to climate change
Canada PM's Arctic stand 'frosty rhetoric'
States set rules on exploiting Arctic wealth
Livestock genes could protect against one of Africa's oldest animal plagues
Drought tolerance in crops: Shutting down the plant's growth inhibition under mild stress
India's top court imposes ban on 'toxic' pesticide
New Strategy Aims to Reduce Agricultural Ammonia
New Zealand inquest told of quake victims' last moments
Vietnam tests first tsunami alert system
Australian flood costs top $6 billion
Local tsunami alert after 6.5 quake off Papua New Guinea
Mozambique wages war on man-eating crocs
Humanity can and must do more with less
Outside View: Kenya mobile banking network
Burkina Faso ruling party says opposition aiming for coup
Sporadic mutations identified in children with autism spectrum disorders
Computer program aids patients in end-of-life planning
Ancient rock carvings found in Sudan
New method for engineering human tissue regeneration
|The content herein, unless otherwise known to be public domain, are Copyright 1995-2010 - SpaceDaily. AFP and UPI Wire Stories are copyright Agence France-Presse and United Press International. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by SpaceDaily on any Web page published or hosted by SpaceDaily. Privacy Statement|