NZ govt's deferred surplus won't hurt credit rating: Moody's 17 Dec 2014
Related articles
- NZ consumers grow more upbeat, may resume spending Business
- Brownlee Leads Aviation Mission To Shanghai News
- Knowles quits as CEO of KiwiBank Business
- NZ migration bolstered by British invasion Migration
- Sludge Report #192: The Naked Budget Columns
- Budget 2010 – Building the Recovery News
- NZ manufacturing activity reaches highest since 04 Business
- NZ dollar hits 22-month high vs euro Business
- Budget provides $321m for RS&T activities News
- Licensing To Cut Out Cowboy Advisers Migration
NZ govt's deferred operating surplus won't hurt credit rating, Moody's says
By Paul McBeth
Dec. 17 (BusinessDesk) - The one-year delay forecast in the New Zealand government's return to surplus doesn't have any implications for its Aaa credit rating, with everything else going in the right direction, according to Moody's Investors Service.
Yesterday's half-year economic and fiscal update pushed out the Treasury's expectation for a return to surplus, projecting the Crown’s operating balance before gains and losses to be a deficit of $572 million in the year ending June 30, 2015 before turning to a surplus of $565 million the following year. Moody's senior vice president Steven Hess doesn't see any risks emerging to the nation's sovereign credit rating, with debt ratios coming under control and surpluses projected in later years.
"There's no rating implication whatsoever," Hess told a media briefing in Wellington today. "Everything else is moving in the right direction and they'll achieve surplus in the next financial year."
Yesterday's downgrade was due to a weaker tax take than previously expected as persistently low interest rates erode revenue from resident withholding tax, household consumption lags estimates, weighing on goods and services taxes, tepid wage growth keeps a lid on personal income tax, and a slump in global dairy prices eats into corporate taxation.
Still, Finance Minister Bill English was optimistic a surplus might still be achieved if the government clamps down on its spending, and has kept the prospect of tax cuts targeted at lower and middle income earnings in 2017, the next election year.
Moody's Hess today said the government's debt has already peaked as a ratio to gross domestic product, and its target to bring net debt down to a ratio of 20 percent of GDP by 2020 is attainable "barring some other big shock."
The Treasury projects net debt to fall to 22.5 percent of GDP in 2019 from 26.5 percent of GDP in the current financial year.
Government figures today showed the current account deficit at a six-year high of $2.5 billion in the three months ended Sept. 30, and at $6.1 billion, or 2.6 percent of GDP, on an annual basis. The Treasury forecasts the current account deficit will peak at 6.2 percent of GDP in March 2016, before falling back to 5.9 percent of GDP by March 2019.
Moody's Hess said he wasn't particularly concerned with the projected increase in the current account deficit, with New Zealand running bigger shortfalls in the past without any impact on its ability to source international funding, and could be potentially smaller than forecast as households increase their savings rates.
(BusinessDesk)
News
Hilary Timmins' Award-Winning UK Documentary Series To Inspire NZ Students
29 Jun 2020 Education
Dream Catchers, produced and directed by Hilary Timmins, celebrates the success stories of more than thirty inspirational New... more
New Zealand reaffirms support for Flight MH17 judicial process
7 Mar 2020 News
Ahead of the start of the criminal trial in the Netherlands on 9 March, Foreign Minister Winston Peters has reaffirmed the need to... more
Business
NZ Government's Economic package to fight COVID-19
17 Mar 2020 Business News
The Coalition Government has launched the most significant peace-time economic plan in modern New Zealand history to cushion the... more
NZ Government announces aviation relief package
19 Mar 2020 Business News
Transport Minister Phil Twyford today outlined the first tranche of the $600 million aviation sector relief package announced earlier... more
Living
Diversity was Key at New Zealand Trade Tasting in London
6 Jun 2022 Food & Wine
New Zealand Winegrowers Annual Trade Tasting was recently held in London, on Wednesday 4 May, in Lindley Hall.
It was the first... more
Kiwi author stuns Behind the Butterfly Gate
12 Jan 2022 Arts
Hidden behind the Butterfly Gate is where the secret has been kept for 76 years...
New Zealand writer Merryn Corcoran’s... more
Property
Fairer rules for tenants and landlords
17 Nov 2019 Property
17 NOVEMBER 2019
The Government has delivered on its promise to the over one million New Zealanders who now rent to make it fairer... more
New Zealand Government will not implement a Capital Gains Tax
17 Apr 2019 Property
The Coalition Government will not proceed with the Tax Working Group’s recommendation for a capital gains tax, Jacinda Ardern... more
Migration
Boosting border security with electronic travel authority – now over 500,000 issued
19 Nov 2019 Migration
19 NOVEMBER 2019
We’ve improved border security with the NZeTA, New Zealand Electronic Travel Authority, which helps us to... more
Christchurch reinstated as refugee settlement location
18 Aug 2018 Migration
18 AUGUST 2018
HON IAIN LEES-GALLOWAY
The announcement that Christchurch can once again be a settlement location for refugees... more
Travel
Gallipoli Anzac Day services cancelled
19 Mar 2020 Travel & Tourism
The New Zealand and Australian Governments have announced this year’s joint Anzac Day services at Gallipoli will be cancelled... more
New Zealanders advised not to travel overseas
19 Mar 2020 Travel & Tourism
New Zealanders advised not to travel overseas
more
Sport
The Skipper's Diary: Sir Richard Hadlee honouring his father and NZ's Forty-Niners
27 Oct 2019 Cricket
NZNewsUK London Editor Charlotte Everett spoke to Sir Richard Hadlee about why he’s chosen to publish his father’s... more
PREVIEW: All Blacks v England semi-final
26 Oct 2019 Rugby
The two most convincing quarterfinals winners are set to square off in a semifinal showdown for the ages when the All Blacks meet old... more
Columns
Gordon Campbell on the Gareth Morgan crusade
11 Nov 2016 Opinion
Gordon Campbell on the Gareth Morgan crusade
First published on Werewolf
The ghastly likes of Marine Le Pen in France and Geert ... more
Gordon Campbell on the US election outcome
10 Nov 2016 Opinion
Column - Gordon Campbell
Gordon Campbell on the US election outcome
Well um.. on the bright side, there (probably)... more
Kiwi Success
Congratulations to Loder Cup winner
26 Sep 2018 People
25 SEPTEMBER 2018
The Loder Cup, one of New Zealand’s oldest conservation awards, has been awarded to Robert McGowan for 2018... more
Appointments to New Zealand National Commission for UNESCO
16 Aug 2018 Appointments
16 AUGUST 2018Appointments to New Zealand National Commission for UNESCO
HON JENNY SALESA
Associate Education Minister Jenny Salesa is... more
Recruitment
Historic pay equity settlement for education support workers
14 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more
Historic pay equity settlement for education support workers
22 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more