Misc

Slowdown curbs chance of tax cuts, says Cullen

A week before his sixth Budget, Finance Minister Michael Cullen is warning that the long-predicted economic slowdown is about to bite.

Thursday, May 19th 2005

In a speech to Canterbury Manufacturers hours after new data showed unemployment up for the first time since 2003, Dr Cullen said a likely bounce in the March quarter would be followed by an economic slowdown later this year.

"The slowdown in growth that has been confidently predicted in each of the last three years appears to be arriving," he said. It is set to last into 2006. "Instead of barrelling along on the open road at the rate of 4 per cent per annum, we have entered a built-up area and are reducing speed, heading to around 2.4 per cent by March 2006."

Beyond the domestic sector things were more promising, with low unemployment and commodity prices for dairy, beef and lamb at or near record levels, Dr Cullen said.

"As for the market's irrational exuberance over New Zealand's dollar, there is by definition little rational response the Government can make."

Next Thursday's Budget would focus on "the long game", he said.

The Government would maintain fiscal stability, prudent debt levels and carefully control its expenditure.

Recent forecasts of strong surpluses over the next few years had sparked ambitious plans in some quarters for spending or for tax cuts.

Read More - Opens in a new window
Heartland Bank - Online 6.69
SBS FirstHome Combo 6.74
Wairarapa Building Society 6.95
Unity 6.99
Co-operative Bank - First Home Special 7.04
ICBC 7.05
China Construction Bank 7.09
BNZ - Classic 7.24
ASB Bank 7.24
ANZ Special 7.24
TSB Special 7.24
Unity First Home Buyer special 6.45
Heartland Bank - Online 6.45
China Construction Bank 6.75
TSB Special 6.75
ICBC 6.75
ANZ Special 6.79
ASB Bank 6.79
AIA - Go Home Loans 6.79
Kiwibank Special 6.79
BNZ - Classic 6.79
Unity 6.79
Westpac Special 6.39
China Construction Bank 6.40
ICBC 6.49
SBS Bank Special 6.55
Kiwibank Special 6.55
BNZ - Classic 6.55
Co-operative Bank - Owner Occ 6.55
ASB Bank 6.55
AIA - Go Home Loans 6.55
TSB Special 6.59
Kainga Ora 6.99
SBS FirstHome Combo 6.19
AIA - Back My Build 6.19
ANZ Blueprint to Build 7.39
Credit Union Auckland 7.70
ICBC 7.85
Heartland Bank - Online 7.99
Pepper Money Essential 8.29
Co-operative Bank - Owner Occ 8.40
Co-operative Bank - Standard 8.40
First Credit Union Standard 8.50
Kiwibank 8.50

More Stories

Support for regulation

Monday, March 18th 2024

Support for regulation

REINZ has emphasised the need for property management regulation to Parliament’s Social Services and Community Committee.

A better investment market

Thursday, March 14th 2024

A better investment market

“Reinstatement of interest deductibility starting from the new tax year on 1 April brings property investors back in line with every other business in the country, where interest costs are a legitimate deductible expense," Tim Horsbrugh, New Zealand Property Investors Federation (NZPIF) executive committee member says.

[OPINION] Recessionary times

Thursday, March 14th 2024

[OPINION] Recessionary times

It is not the best out there for many businesses and property sector people. Sales are down across the board, our clients’ confidence is falling, and there is a lot of uncertainty.

Interest rate expectations: It’s not over yet

Thursday, March 07th 2024

Interest rate expectations: It’s not over yet

Most Kiwis think interest rate increases have peaked.