The Mike Hosking Breakfast
Steven Joyce: Former Finance Minister on the government's deficit growing by $3.4 billion
Oct 10, 2024
Steven Joyce, former Finance Minister of New Zealand, offers a candid look at the country's economic landscape. He reveals that the Crown's deficit has ballooned by $3.4 billion to $12.9 billion, despite revenue increasing by $14 billion. Joyce discusses the tough road to recovery, emphasizing the importance of sustainable growth amid rising expenses. Interestingly, he notes that while net debt doubled post-Covid, inflation is under control, highlighting a silver lining in the grim fiscal scenario.
04:28
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Quick takeaways
- Despite a growing deficit of $12.9 billion, former Finance Minister Steven Joyce highlights the importance of controlling inflation as a positive outcome.
- Concerns about the effectiveness of Health New Zealand and ACC underscore the need for improved efficiency in government spending amid rising national debt.
Deep dives
Fiscal Challenges and Revenue Outlook
Recent financial figures reveal a significant deficit of $12.9 billion, surpassing initial projections and highlighting ongoing economic difficulties despite some anticipated improvements. While revenues have increased, largely due to higher tax contributions from interest income, expenses have risen even more, presenting potential reputational risks for the government if this trend continues. The expectation is that this boost in revenue may not sustain as interest rates stabilize, shifting the focus back to the need for economic growth to enhance tax revenue. Moreover, the historical pattern indicates that government financial health often lags behind overall economic recovery, as seen in prior downturns.
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