On May 14, the National/New Zealand First coalition government delivered its second budget. A NZ$2.8 billion (US$1.5 billion) government surplus was announced (well above the NZ$1.5 billion 1997-1998 forecast). However, the surplus for 1998-1999 is forecast to fall to NZ$1.3 billion. Other features of the budget were:
- the no-fault accident compensation scheme to be partially opened up to competition through private insurers;
- work testing introduced for sickness and invalid beneficiaries (to bring those benefits into line with the unemployment benefit);
- spending on health, education and police increased;
- tariffs on imported motor vehicles to be removed immediately;
- statutory producer boards to prepare proposals for deregulation by mid-November;
- the Crown to sell its share in Auckland International Airport by public floatation;
- parallel importing restrictions lifted;
- the annual growth rate is expected to be 2.7% for the year up to March 1999 (previously forecast to be 4%); and
- cigarettes to increase in price by NZ$0.50 per packet and there is to be a 2.1¢ per litre increase in the tax on petrol.
James Aitken/Vaughan Spurdle
© 2021 Euromoney Institutional Investor PLC. For help please see our FAQs.