16 May 2013

Surplus on target - Government

7:28 pm on 16 May 2013

The Government has reiterated it's on target to return to a Budget surplus in two years' time, because of the gradually improvement in economic activity and keeping spending in check.

Excluding investment gains and losses, the Budget deficit is forecast to be an better-than-expected $6.3 billion for the year to June and $2 billion the year after, before then recording a small surplus of $75 million after that.

Finance Minister Bill English says net debt will peak at close to 29% by 2015, before falling to 20% in 2020.

Mr English says the Government's return to surplus in 2014-15 will be achieved despite a record deficit two years ago.

"The path from a large deficit to a surplus has been achieved by improving growth in the economy, tax reform that enables a more efficient collection of our revenue, and a consistent focus on better public services that achieve results as well as trimming some entitlement programmes several years ago."

He told Parliament that the return to surplus is not dependent on partial asset sales.

"The share offer programme effectively swaps one type of asset for another electricity company shares for cash so its primary effect is on the mix of assets and debt that the Government owns, rather than on the operating balance."