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Published: Tuesday May 13, 2014 MYT 9:57:00 AM
Updated: Tuesday May 13, 2014 MYT 10:00:01 AM

New Zealand PM hints few election year budget sweeteners

WELLINGTON, May 13, 2014 (AFP) - Prime Minister John Key has said there will be no big-spending promises in the New Zealand budget to be unveiled on Thursday, despite a buoyant economy and an election looming this year.

Key said he has resisted the temptation to roll out the pork barrel as he seeks a third term in office on September 20, instead opting to pursue his long-term goal of moving the government's books back into the black.

"Just because there's a general election coming in September, we will not be spending large amounts of new money," the conservative leader told a business function in Wellington last week.

"That would stop us getting back to surplus, push up interest rates even higher, and prevent us paying down debt.

"This government won't be losing sight of the need to maintain a tight watch on spending."

The government last year predicted it would turn a NZ$6.3 billion ($5.4 billion) deficit in 2012/13 into a narrow NZ$75 million surplus within two years and Key said recent data showed it remained on track to achieve the goal.

The farm-reliant economy, which generates gross domestic product (GDP) of more than NZ$140 billion (US$115 billion) annually, grew an estimated 3.5 percent in the year to March, making it one of the developed world's best performers.

The growth has been fuelled by high prices for its agricultural exports, particularly from China, and a booming construction sector stimulated by an NZ$40 billion rebuild in Christchurch following a 2011 earthquake that claimed 185 lives.

Finance Minister Bill English indicated the government would adopt a "steady as she goes" approach amid signs the fiscal restraint of recent years was finally paying off.

"The track to surplus is just one indicator confirming the economy is heading in the right direction," English said.

"As the budget will show, the government's economic programme is making good progress in supporting more jobs, higher incomes, increased business investment and better public services."

Tags / Keywords: John Key, New Zealand, economy, budget

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