NZ: Government committed to its fiscal responsibility targets - ANZ

Analysts at ANZ note that since taking office, the Coalition Government of NZ has reiterated its commitment to its fiscal responsibility targets and has also promised to invest in correcting the so-called “infrastructure deficit”.

Key Quotes

“Weighing these objectives is a difficult balance. We think an argument can be made for increasing near-term debt targets for the purpose of growth-enhancing infrastructure spending. The Government books are in a good position and years of strong population growth but constrained Crown capital spending have put significant pressure on infrastructure.”

“In our view, simple, transparent debt financing would be optimal. A long, relatively smooth forward-looking pipeline of appropriately prioritised infrastructure spending, with the option to ramp up if economic activity were to soften, should be the goal. The sector is resource constrained, but given the long lead time of infrastructure projects, it does not seem an inopportune time to get planning underway.”