Election could erode New Zealand budget repair

Significance

Increased economic optimism will be welcomed by Prime Minister Bill English, who is hoping that his National Party will win a fourth consecutive term in government this September. Finance Minister Steven Joyce presented a confident budget for the 2017-18 fiscal year in May that focused principally on low-to-middle-income taxpayers, laying out the government’s economic agenda.

Impacts

• A tight labour market will push up wages and paint a positive picture of National rule for the electorate.
• High levels of household debt could undercut consumer confidence once monetary policy begins to tighten.
• No shifts in climate policy are anticipated until a June 2018 Productivity Commission report is released.