19 Nov 2010

Quicker Govt surplus could hurt recovery - economist

7:11 am on 19 November 2010

ANZ Bank chief economist Cameron Bagrie says bringing the Government's budget back into surplus in four years could hurt the economy's recovery.

The Treasury has advised the Government to reconsider its automatic spending increases on Kiwisaver, indexation of benefits, and tertiary education, so the Budget can balanced by 2014.

Mr Bagrie says Government spending does need to be tightened.

But he says the economy is still fragile and it is not the right time to be taking money out of consumer's pockets.

However, Business New Zealand economist John Pask says the Government has to look at every avenue of saving, even areas like interest-free student loans and universal superannuation.