The latest Budget is out and it’s heavy on spending for benefits, infrastructure, health and education.
Overall, Finance Minister Grant Robertson is trying walk the fine line between underspending and overborrowing – the Government has critics on both sides.
- Treasury is forecasting a levelling off of house price growth in 2022; it says growth will be flattish through until 2025. Only time will tell how accurate this forecast is, but as the supply of houses rises and immigration remains low, it would be surprising if house price growth continued this year.
- Construction is likely to boom, both residential and commercial, with massive infrastructure spending and investment in health, education and rail assts. There’s also an extension to training schemes which will support more people working in construction.
- Beneficiaries will be receiving at least $20 a week more, rising to up to $55 more a week next year. That includes students, too. This is likely to increase general spending, which will probably boost the economy somewhat.
There were few surprises in the Budget and it didn’t give us much new information, but it is encouraging to see more data showing that New Zealand’s economy is bouncing back strongly after 2020’s lockdowns.