Govt Financial Results Fall Short of Forecast, Reinforcing Need for Fiscal Restraint: Nicola Willis

Minister Willis stated that these figures emphasize the ongoing need for strategic spending and economic stimulus to bring the deficit under control.

Finance Minister Nicola Willis has announced that the Government’s financial results for the first quarter of the year are weaker than anticipated, underscoring the importance of fiscal restraint and economic growth. The financial statements for the three months ending 30 September 2024 revealed a total Crown operating balance before gains and losses (OBEGAL) deficit of $4.2 billion, which is $0.7 billion higher than forecast in May’s Budget.

The report also indicated that net core Crown debt exceeded expectations by $0.7 billion, reaching $177.6 billion. Minister Willis stated that these figures emphasize the ongoing need for strategic spending and economic stimulus to bring the deficit under control.

“These results make it clear that fiscal discipline is essential,” Willis stated. “We are focused on making every dollar count and finding ways to stimulate growth without compromising our financial future.” She noted that while government spending has been slowed, reversing the impact of previous financial policies will take time. "In just six years, the previous government raised net debt by a staggering $118 billion, equivalent to $22,000 for every New Zealander."

Minister Willis acknowledged the uncertainty inherent in economic forecasting, stressing that recent results highlight the volatility of global and local markets. "These fluctuations underline why we must be prepared to adapt our strategies as economic conditions evolve," she said.

Looking ahead, Willis highlighted the importance of prudent fiscal management and fostering a business-friendly environment to stimulate growth. The Government’s approach will involve carefully prioritizing expenditures that provide tangible benefits to New Zealanders, while also focusing on creating a stable and prosperous environment for businesses.

New projections are expected on 17 December, when the Government will release the Half-Year Economic and Fiscal Update (HYEFU) along with the Budget Policy Statement. These forecasts will help guide the Government’s fiscal strategy moving into 2025, offering updated insights on economic performance and shaping future policy directions.

Willis concluded by emphasizing the Government's commitment to creating a resilient economy: "We are determined to get the nation’s finances back on track, secure the economy’s foundations, and build a brighter, stronger future for every New Zealander."