RTTNews - The New Zealand annual budget saw some belt-tightening almost across the board, but the country will still be operating in a fiscal deficit for 10 years, the government said on Thursday as the budget was presented, also marking the largest deficit in 25 years.
New spending will total $1.7 billion in 2009-10 and $5.8 billion in total over to 2012-13 and $1.4 billion in new capital spending by 2012-13.
But the operating balance expected to worsen. For 2009 the deficit was expected to be $2.9 billion before growing to $7.7 billion in 2010 and hitting $9.26 billion in 2011. The worst deficit of $9.58 billion was forecast for 2012 before reducing to $8.4 billion in 2013.
The budget will improve New Zealand's international competitiveness, New Zealand Finance Minister Bill English upon presenting the budget. It will get our debt under control and turning down. It starts to create a government sector that provides better services and delivers better value for taxpayers. It will help create new and sustainable jobs. It will begin to build a platform for a much more ambitious New Zealand.
Growth in the economy is not expected to pick up until 2011, including negative 0.9 percent this year, negative 1.7 percent in 2010 then up 1.8 percent in 2011.
Other key measures include the deferral of 2010 and 2011 tax cuts, reprioritizing $2 billion of the Labour Government's planned spending and suspending full payments to the Superannuation Fund.
Not all of the sectors saw their funds pared as the health industry was bumped $3 billion higher and education got a $1.68 billion raise. An additional $900 million was allotted to the police, while infrastructure got another $290 million.
The budget puts in place policies that will help ensure that the New Zealand economy emerges strongly from the current recession and provides a platform for strong growth, higher incomes and quality public services, Prime Minister John Key said. The National-led Government has a clear vision for the future and a clear plan.
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