The National-led Government's responsible economic management is paying dividends with a second surplus delivered by the Finance Minister. The $1.8 billion surplus for the year to 30 June 2016 builds on a $414 million surplus in 2014/15. It is a huge turnaround on a deficit of more than $18 billion New Zealand faced five years ago following the global financial crisis and devastating Canterbury earthquakes.
The Crown accounts show tax revenue increased $3.8 billion during the year, outpacing spending growth of $1.6 billion, which is consistent with the Government's responsible management of the books. They also show we've got government expenses under 30 per cent of GDP, the first time since 2006, and net debt has stabilised to 24.6 per cent of GDP. We are now just one of a very small group of countries that has the Government books in surplus and a growing economy. This Government remains committed to maintaining rising surpluses because this gives New Zealand real choices. For example - paying down debt, ongoing investment in public infrastructure like hospitals and schools and better public services, and resuming contributions to the New Zealand Super Fund. And if economic and fiscal conditions allow we can begin reducing income taxes.
New Zealand's economic outlook is positive with consumer confidence growing, businesses investing, exports up, and tourism and construction booming. Our economy is growing at more than 3 per cent, with more jobs, and rising wages thanks to the entrepreneurship and hard work of New Zealanders supported by the Government's economic plan and responsible financial management. In the last three years 250,000 jobs were created and we now have the third highest employment rate in the OECD group of developed countries. The average annual wage is up 25 per cent since 2008, more than double the rate of inflation. Low inflation means wage gains going into people' wallets rather than cost increases. Interest rates are at their lowest level since the 1960s - great for people with a mortgage or businesses wanting to invest.
However, we need to keep in mind that there are a lot of risks globally and that's why it is important to get our debt levels down. If you borrow through tough times, you need to repay during good times so the Government is committed to maintaining rising surpluses so we can reduce net debt to around 20 per cent of GDP by 2020. Looking to next year, Budget 2017 will make positive long-term choices to strengthen the economy and our communities.