The New Zealand Government has achieved its third fiscal surplus in a row with the Crown accounts for the year ended 30 June 2017 showing an OBEGAL surplus of $4.1 billion, $2.2 billion stronger than last year, Finance Minister Steven Joyce says.
“The 2016/17 Crown accounts are a direct demonstration of the hard work of New Zealanders since the Global Financial Crisis and the benefit of a strong economic plan that is delivering consistent growth,” Mr Joyce says.
Core Crown tax revenue was $75.6 billion for the 2016/17 year, up 7.4 per cent from the previous year with all major tax types increasing.
“The 12.3 per cent growth over last year in company tax, a 7.1 per cent growth in GST, and a 7.4 per cent growth in personal income tax, are a direct consequence of the confidence and growth of Kiwi companies and the growth in jobs.”
Core Crown tax revenue growth of $5.2 billion outpaced core Crown expenditure growth of $2.4 billion.
The final OBEGAL result for the year is $363 million better than predicted by Treasury at the time of the Pre-election Fiscal Update, largely due to core Crown expenditure being $502 million less than forecast.
“This better result should be seen as a one-off. Treasury advises that much of this expenditure reduction reflects timing differences and is likely to reverse out in the years ahead,” Mr Joyce says.
The country’s net debt has reduced in nominal terms by $2.4 billion from last year, to $59.5 billion. Net debt has dropped to 22.2 per cent of GDP.
“This is the first time net debt has reduced in actual dollar terms since the GFC and the Christchurch earthquakes,” Mr Joyce says. “It’s a significant milestone in the country’s economic recovery from those twin shocks.”
Mr Joyce says that the 2016/17 full year result should be interpreted with caution, and not seen as automatically flowing through into higher surpluses than forecast in the years ahead.
“Treasury has based its forecasts on current economic settings and some reasonably solid growth predictions for the years ahead. A number of commentators have noted a softening of growth indicators in recent days.
“The Government’s future surpluses will be needed to meet the cost of the significant investments we have committed to as part of the next four Budgets including the Government’s $32.5 billion infrastructure programme.
“We also need to keep reducing debt over time to prepare for the next rainy day event.”
Commemorations to mark one of New Zealand’s darkest days will be held in New Zealand and Belgium this month to remember the Battle of Passchendaele.
Arts, Culture and Heritage Minister Maggie Barry says the commemorative programme reflects on New Zealand’s involvement in the fighting around Passchendaele between 1 and 18 October 1917.
“Passchendaele on 12 October 1917 is still known as one of the greatest disasters in New Zealand’s history – when 843 men died in a single day. This devastating loss of life remains the highest one-day death toll suffered by New Zealand forces overseas,” Ms Barry says.
“During the Third Battle of Ypres, which included Passchendaele, New Zealand lost nearly 2,000 men. We’ll remember them and all who fought in Belgium.”
In Wellington the commemorations will begin at 3pm on October 12 at the Pukeahu National War Memorial Park.
“Immediately after the national ceremony, a memorial gifted to New Zealand by the Belgian Government will be unveiled on the eastern terraces at the Park. The Last Post will be held at the Tomb of the Unknown Warrior at 5pm,” Ms Barry says.
“The ceremony in Belgium will take place at 11am local time at the Tyne Cot Cemetery near Zonnebeke and will be attended by His Royal Highness , the Duke of Cambridge on behalf of the Queen and Her Royal Highness Princess Astrid of Belgium on behalf of King Philippe.”
New Zealand will be represented by Hon Dr Nick Smith and Rt Hon David Carter.
“This is the largest Commonwealth War Grave Cemetery in the world and contains the graves of 520 New Zealanders. Our ‘Memorial to the Missing’ in the cemetery lists the names of others who died in the Battles of Passchendaele,” Ms Barry says.
The New Zealand Passchendaele Centennial Memorial and Garden in Belgium will also be opened as part of the commemorations at 3pm local time.
“I want to commend Chris Mullane, Mike Pritchard and many others from the Passchendaele Society in New Zealand, who’ve worked so hard over so many years to have this memorial garden built. I planted the first flax there in 2016 and I know it is a fitting memorial telling our poignant New Zealand story’” Ms Barry says.
Ceremonies will conclude at sunset at Buttes New British Cemetery in Polygon Wood where 95 Kiwis are buried and where the New Zealand ‘Memorial to the Missing’ records the names of 388 New Zealanders who died near there but have no known grave.
“A group of senior secondary school students, who won the joint Ministry of Education, Fields of Remembrance Trust and the Passchendaele Society digital competition, will be attending the commemorations in Belgium. They will also attend the New Zealand Memorial and Garden,” Ms Barry says.
More information about both the domestic and overseas Passchendaele commemorations can be found at ww100.govt.nz/passchendaele-centenary.
A return to 100 per cent jet fuel allocations at Auckland Airport is a great start to the school holidays for airlines and their customers, Energy and Resource Minister Judith Collins says.
Two weeks ago the fuel allocation was reduced to 30 per cent following the disruption to supply through the Marsden Refinery to Auckland pipeline. Fuel allocations were increased incrementally to 50 per cent then 80 per cent as alternatives to transporting fuel to Auckland Airport were found.
“Getting back to 100 per cent fuel allocation this morning is great news for the start of the school holidays. It is the result of the co-operation between government and industry in managing a complex logistical exercise in moving fuel through alternative routes by land, air and sea,” Ms Collins says.
“It should be noted that the Marsden Refinery to Auckland pipeline while repaired, will be operating at 80 per cent capacity into the New Year. However, the industry is confident that the pipeline will be able to deliver the amounts of jet fuel airlines need to operate normally.
“Trucks will continue transporting the 1.5 million litres of jet fuel stored at Wynyard Wharf until the tank is empty, which is expected to be toward the end of next week.
“It’s also good to hear from the industry that there are no longer any short-term outages at stations in Auckland. The pipeline is increasingly being used to deliver petrol and diesel into Auckland, which is continuing progress to normal supply. The fuel companies are looking at their logistics to ensure use of the pipeline and fuel being trucked in from outside of Auckland is balanced, and continues to ensure demand is met.”
The New Zealand economy continued to grow solidly in the June quarter, posting a 0.8 per cent increase in GDP, taking New Zealand's growth rate for the year to 2.7 per cent, Finance Minister Steven Joyce says.
“Our economy continues to outperform many developed nations, underpinned by strong export and domestic demand,” Mr Joyce says. “It is still a challenging international environment, which is why we need to continue with an economic plan that is working for New Zealand.”
New Zealand’s growth over the last year has exceeded that of Australia, the United Kingdom, the USA, the Euro area, Japan, and the average across the whole OECD.
Growth in the quarter was across 11 of 16 industries, including:
Retail, trade and accommodation (up 2.8 per cent)
Manufacturing activity (up 1.8 per cent)
Business services (up 1.1 per cent)
Transport, postal and warehousing activity (up 3.5 per cent)
Exports rose 5.2 per cent, with exports of goods posting its biggest quarterly increase in 20 years. Overall growth in the quarter was partially offset by the construction sector, which contracted 1.1 per cent in the quarter but up 6.4 per cent from June 2016.
Today’s GDP figures followed on from the release of New Zealand's external accounts yesterday, which showed a current account deficit of 2.8 per cent for the June year.
"This week’s economic growth statistics show that the Government’s consistent economic plan is encouraging businesses to invest and grow more jobs for New Zealanders. It is important to maintain and support business confidence if we are to continue our progress in the years ahead."
Better than expected balance of payments figures out this morning underscore the strength of both the services and goods sectors of the New Zealand economy, Finance Minister Steven Joyce says.
New Zealand's current account deficit narrowed to $1.6 billion in the June 2017 quarter, $1.2 billion lower than in the previous quarter. This is mainly driven by the services sector, with a surplus of $1.3 billion, the highest surplus on record.
New Zealand’s current account deficit is 2.8 per cent of GDP in the June year, down from 2.9 per cent in the last quarter, ahead of market forecasts for a deficit of 3.1 per cent.
"Today’s result is one of the dividends of an increasingly diversified economy, with both services and goods exports performing well in the quarter,” Mr Joyce says. “The services sector in particular, had a strong run in the quarter driven by $3.7 billion of spending by overseas travellers.”
Key highlights included:
- Services surplus increased $295 million to $1.3 billion
- The goods deficit decreased $677 million to $446 million
- New Zealand’s net international liability position is equivalent to 57.5 per cent of GDP, down from 57.8 per cent in the previous quarter, the lowest since records began.
"The days of New Zealand as a one-trick economy are behind us, but this does not mean we can rest on our laurels. We need to continue the government's strong economic plan so we can further diversify and grow our economy.”
Trade Minister Todd McClay says a trade agreement with Mexico, Chile, Colombia and Peru could be worth 10,000 jobs to provincial New Zealand and will give Kiwis unprecedented access to fast-growing Latin American markets.
This comes as Mr McClay calls for public submissions on FTA negotiations with the Pacific Alliance countries.
“Mexico, Chile, Colombia and Peru combined have 221 million consumers and a GDP of US$3.85 trillion, which is equivalent to the world’s sixth largest economy,” Mr McClay says.
“This is an important market for us now, and we want the public and the business community to consider how they might take advantage of the increased opportunities for both trade and investment that will result from an FTA.”
Mr McClay says increasing trade and business links with the Pacific Alliance will also advance the prospect of New Zealand serving as a trading bridge between South America and Southeast Asia.
“The Government will be pushing hard for a high-quality agreement. It’s important we hear from New Zealanders about what they would like to see prioritised and progressed during negotiations, Mr McClay says”
Mr McClay says negotiations with the Pacific Alliance will begin in the coming months and are expected to progress swiftly. Public submissions are due by October 16.
The roll-out of a soft plastics recycling scheme in Nelson today means New World, Countdown and Pak’nSave supermarkets in the South Island will offer the service, Environment Minister Dr Nick Smith says.
“The Love NZ Soft Plastics Recycling Programme is the next logical step for households in reducing waste. It means people can take the likes of bread bags, shopping bags and frozen vege bags to these supermarkets for collection, re-manufacture and re-use,” Dr Smith says.
“Most households now recycle paper, cardboard, glass, metal cans and hard plastic containers, and the extra challenge with soft plastics was finding a practical way of collecting them and keeping them clean enough for re-use. The programme is already running in Auckland, Hamilton, Wellington and Canterbury and will now roll out to stores from Nelson to Invercargill.
“These additional South Island locations mean the programme reaches its goal of 70 per cent of New Zealanders having access to a drop-off facility within 20km of their home.
“A Government Waste Minimisation Fund grant of $700,930 supports this joint initiative between the retail sector, the packaging industry and the Government to enable the recycling of soft plastics.
“The soft plastic collected is turned into useful products such as benches and bollards, extending the life of this valuable resource. The programme will now be available at more than 350 stores nationwide, and includes South Island New World, Countdown and Pak’nSave supermarkets.
“This initiative builds on the work we have done with hard plastics, like the opening last month of the Flight Plastics processing facility in Lower Hutt, which received a $4 million Government grant. This facility has the capacity to turn more than 200 million plastic drink bottles a year into high grade food-safe packaging.
“The soft plastics programme is a great example of how businesses can make positive changes that enable every-day New Zealanders to divert plastic waste from ending up as litter or landfill. Its North Island roll-out will continue next year, with Rotorua, Tauranga and Palmerston North.
“The success of the programme to date clearly shows New Zealanders’ enthusiasm for reducing waste to landfill. This year more than 200 tonnes of soft plastics have already been collected for recycling.
“It is needed regardless of the debate on single use shopping bags. I welcome the announcement yesterday by Foodstuffs that they are exploring a charge on single use supermarket bags but the soft plastics problem is far larger than just the single use supermarket bags.
“This innovative and collaborative approach has proved successful in other locations and I’m looking forward to seeing Nelsonians embrace it,” Dr Smith concluded.
Freight is rolling again this morning on the South Island’s Main North Line, ten months after November’s Kaikoura earthquake, Transport Minister Simon Bridges announced today.
The first train carrying goods into Christchurch from Picton is due to arrive in Christchurch by 2pm today, marking the start of a five nights per week service.
“Keeping freight flowing easily and efficiently around New Zealand is critical to our economic growth and keeping our communities connected,” Mr Bridges says.
“Having this key freight service running again is an immense achievement, which will take pressure off the inland routes while helping with the rebuild of State Highway 1 during the day.
“Today’s first rail services, even in a limited capacity, will take around 2000 trucks off the road each month, building to 4000 trucks when the line is fully operating again by the end of the year.”
Following November’s earthquake, there were close to 60 major damage sites, including tunnels, bridges and embankments, and the line had been buried under more than 100 slips and landslides. Approximately 60 bridges were damaged and repairs required at more than 750 sites.
“Over 1500 workers from KiwiRail, the NZ Transport Agency and their partners in the North Canterbury Transport Infrastructure Recovery alliance (NCTIR) have done a fantastic job in what have been challenging conditions,” Mr Bridges says.
“The Government is committed to restoring the road and rail services along this important coastal corridor, and it’s great to see the significant progress being made.
“We have also provided a range of business support packages and support for the tourism industry and primary sector to help get the most affected communities back on their feet and rebuilding the local economy.”
Minister of Foreign Affairs Gerry Brownlee and Minister of Science and Innovation Paul Goldsmith have today announced that Antarctica New Zealand, in partnership with the Ministry of Business, Innovation and Employment, will jointly develop a new Antarctic Science Platform.
“With a mandate to carry out New Zealand’s activities in Antarctica, alongside their existing logistics and infrastructure, Antarctica New Zealand is well positioned to support the delivery of a strategic and collaborative approach to New Zealand’s Antarctic science,” Mr Brownlee says.
“Following consultation with a wide range of sector stakeholders, Antarctica New Zealand has been invited to work with the Ministry to establish the new Platform.”
The Platform will bring together New Zealand’s top experts, facilities, information and knowledge for underpinning, longer-term Antarctic science critical to maximising scientific and strategic benefits for New Zealand.
“An independent governance group will be established to make funding decisions, based on advice and recommendations from the Platform host,” Mr Goldsmith says.
“This governance model will result in most research programmes and projects being developed collaboratively with input from relevant science providers and government agencies.”
$21 million over three years for the Antarctic Science Platform was announced as part of Budget 2017 through the Ministry’s Strategic Science Investment Fund.
This funding is additional to a number of existing sources of support for Antarctic research and will allow strategically aligned research that addresses key priorities for New Zealand.
The priority research areas will include understanding the stability of the West Antarctic Ice Sheet, change in the Antarctic atmosphere and Southern Ocean, threats to ecosystem dynamics in the Ross Sea, and connections between terrestrial and near shore Antarctic environments, including sea ice.
“The Platform science priorities will be supported by three cross-cutting themes of building innovation and interdisciplinary capability, developing long-term data sets, and developing technology,” Mr Goldsmith says.
“Antarctic science is hugely important to New Zealand,” Mr Brownlee says.
“These priorities have a high strategic and scientific value and will ensure we build a strong, internationally connected, and respected Antarctic science programme,” Mr Brownlee says.
MBIE will now work closely with Antarctica New Zealand to develop a Platform Plan. A governance group is expected to be established early next year with the Platform becoming operational from July 2018.