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Bill English, New Zealand’s finance minister is having a hard time balancing the records. New Zealand immigration is getting popular globally. Due to increased rate of New Zealand immigration, the public services are being delayed. The surplus money reserved for new strategies and tax reduction has also been used. This has happened first time in seven years.
Since more skilled workers and students are moving to New Zealand, the net value for New Zealand immigration has crossed 68,110 people through April. Bill stated that he had to rework the budget due to this unexpected population growth. The current budget is incapable to suffice the increasing pressure on educational institutes, health care centres, infrastructure and housing market.
The Treasury forecast in December showed that the current budget will be $270 million short for the year ending in June 2016. Bill added that he is concerned about the debts that the government has to pay.
He further added that he is working on reducing these debts by 2020. After the global financial crisis, the government borrowed a large amount to maintain public services. Then the government spent a large amount to fund the earthquake stricken Christchurch in 2010-2011.
Bill said that some amount from 2017’s budget will be used to pay a portion of debts so he can achieve the low debt target by 2020.
Cameron Bagrie is the chief economist at ANZ Bank New Zealand, Wellington. He said that our current need is to increase the capital investment. Debt repayment should not be given such a high priority. Bill states that debt repayment is the highest priority of the government.
The mooted tax cuts in 2014 may be a part of 2017’s budget according to PM John Key.
The house pricing has increased by 37% as compared to that in 2007. Auckland specifically has raised house prices as high as 72% in this duration. Voters are looking forward to some policy that will address the house affordability in New Zealand.
The high house pricing is a result of increase in number of New Zealand immigration. There is a higher demand for houses than available. Michael Gordon, senior economist at Westpac Banking Corp. in Auckland assures that the government is planning to start some new projects in order to fulfil this increasing demand especially in Auckland.