Budget 2009: AXA Budget Commentary 2009

They have largely achieved that. While operating balances will deteriorate in the short-term, a return to surplus is forecast for 2017. It's at this time that the projected path for net debt starts to turn down again.

But the Government has had to make some hard decisions to achieve that. The next two planned tranches of personal income taxes have been deferred. Also, automatic contributions to the New Zealand Superannuation Fund have been suspended until cash surpluses are large enough for contributions to resume. This will be a decade away.

The new Government has also taken the opportunity to reprioritise some of the former Government's spending initiatives. This has allowed significant headroom for their own priorities.

On balance we believe those initiatives are more supportive of building higher sustainable growth.  We particularly like the emphasis on infrastructure and education.  But we believe the Government has missed an opportunity to outline a more rigorous plan for building higher sustainable growth.