Wednesday, New Zealand's Finance Minister, Bill English said the Government will run a deficit this year, and will do so for the foreseeable future.
Due to the difficult economic and fiscal circumstances that the nation experiences over coming few years, the government is considering the future of income tax cuts planned for 2010 and 2011, as well as the Government's contributions to the New Zealand Superannuation Fund, English revealed.
He noted that when the Super Fund was set up, the idea was to invest Budget surpluses to it. The government was then in surplus and expected it to remain in surplus for the foreseeable future. Accordingly, the government considered the Super Fund as a way to set aside those surpluses so that, when the population ages, it could be utilized to meet rising Superannuation costs, he said.
But those Budget surpluses disappeared and that changed the whole picture, English added. He reiterated that the Government's books are undoubtedly in worse shape than Treasury predicted in its December downside forecasts.
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