New Zealand keen to spend in May budget
A fortnight out from the New Zealand budget, Finance Minister Grant Robertson is sitting on an almighty war chest.
On Tuesday morning, Mr Robertson said he had found $NZ926 million ($A859 million) in savings he will splash in a "recovery budget" on May 20.
A new analysis also shows the government has a record $NZ42 billion ($A39 billion) of cash in its crown accounts, a sign it has been borrowing more than it's spent.
Reserve Bank figures published by interest.co.nz shows the bumper cash reserves - almost three times more than at any point in the past two decades.
There's no prospect of Mr Robertson emptying the crown account, or handing it back to pay down debt, though there are signs his budget could spend more than expected.
NZ's economic response from the pandemic remains strong, giving Mr Robertson more in the kitty than he anticipated.
The country's GDP fell just 0.9 per cent in the 12 months to December - well above last budget's expectations - which compares favourably to Australia (1.1 per cent), the USA (2.4 per cent) and the UK (7.3 per cent).
"Our stronger than expected economic performance means we have more options than we had expected to invest in critical services," Mr Robertson said.
The $926 million fund has been recovered as a result of a fishing expedition across departments.
Mr Robertson said he asked ministers to assess their spending from last year's $50 billion COVID-19 Response and Recovery Fund, producing the savings that will be "reprioritised" on May 20.
Jacinda Ardern's government has made clear its primary mission this term is to oversee NZ's health and economic response to COVID-19.
Beyond that, Mr Robertson said the government wanted to address the "three big long-term challenges" of housing affordability, climate change and child wellbeing.
New spending measures in all three of those areas - even beyond a multi-billion housing package announced last month - are certain in the budget.
Despite the improved economic environment and Mr Robertson's reputation as a fiscal conservative, he will resist the urge to pay back debt in this year's budget, deferring that challenge until later years.
"Our fiscal objective ... remains to stabilise debt by the mid-2020s and then reduce it," he said.
"Even at their elevated levels our debt position is significantly better than almost every country we compare ourselves to."
NZ's inflated public debt level, at around 22 per cent of GDP has come from fiscal stimulus efforts designed to fight COVID-19.
Mr Robertson said the debt - including wage guarantees and business loans - was incurred to "save New Zealanders' lives and livelihoods".
"(Our debt) is less than half of Australia's level of close to 49 per cent, and some way away from the United Kingdom at 97 per cent and the United States at 109 per cent," he said.
"We are in a good position to handle the debt we have taken on."
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