18 Nov 2010

Treasury head wants Govt to balance books earlier

8:47 pm on 18 November 2010

Treasury head John Whitehead says the Government should be aiming to bring the Budget back into balance one to two years ahead of schedule.

Mr Whitehead says spending on KiwiSaver, indexation of benefits, and tertiary institutions' funding need to be reviewed.

The Government currently expects its Budget to get back to the black by 2016.

But Mr Whitehead says that is not good enough.

Earlier surpluses, he says, would bring interest rates and the exchange rate to more export-friendly levels.

Mr Whitehead says the high New Zealand dollar is hurting exporters, and is not being helped by high levels of Government spending and borrowing.

He says spending on KiwiSaver, benefits and tertiary institutions should be reviewed.

But even getting back to surplus by the Government's target date of 2016 is looking tougher.

Finance Minister Bill English says a weaker outlook for the world economy, less household spending, and the Canterbury earthquake look like boosting the deficit in the short term.