Tuesday, July 08, 2014

So much for the surplus

Back in May, National promised to balance the books next year. Now it looks like that won't be happening:

The Budget deficit was tracking $332 million worse than forecast for the 11 months to the end of May, throwing doubt on the forecast 2014/15 Budget surplus.

Treasury said the budget deficit excluding gains and losses (Obegal) was $1.1 billion against $770m forecast in the May 15 Budget update, due to softer than expected GST and corporate tax returns.

Officials said it was too early to know the likely impact of these results "on the current and future financial years as both downside and upside risks exist ".

The Government has been promising to deliver a Budget surplus, and the May Budget forecast a surplus for the 2014-15 year of $372 million, well ahead of the paper-thin $86m tipped in December.

So, I guess we can expect some arbitrary cuts so National can claim its victory. What'll it be? School maintenance? Maybe they'll kick the poor some more. But the one thing they won't be doing is fixing the revenue side of the budget by increasing taxes on the rich - that apparently is unthinkable.