COMMENT:

A once-in-a-decade piece of good news about the economy came out this week.

We now have the largest Budget surplus since the Global Financial Crisis hit our shores in 2008.

The official financial statements of the Government are produced by Treasury. They show a strong surplus and low debt. Any household would be pleased with finances like this, any business that posted a set of accounts like this would be regarded as a solid performer.

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The results show businesses are investing, employing more workers and paying higher wages, while at the same time reporting stronger profits.

Regional economies have a good story to tell, too. Here in Hawke's Bay we have consistently been in the top five of regional performers all year. The recent ASB scoreboard noted that the region "still has momentum to sustain decent growth" to the end of the year and beyond.

Also this week we were given a solid rating by an international index which measures the competitiveness and neutrality of the tax system.

We climbed one place in the rankings for the most competitive tax system in the world.
We are now number two in the world, according to the US-based think tank the Tax Foundation, which has been researching world economies since 1937.

Our rating means the tax system is easy to comply with, promotes economic development, doesn't distort the economy, and raises enough revenue to meet our priorities. This is a good result for New Zealand when we have to compete in the international marketplace.

Both these scorecards reinforce that fundamental base of the New Zealand economy is solid.

We are growing faster than Australia, the UK, Canada and the EU, which is being recognised by international investors and agencies like the IMF and Moody's.

It's important that we don't talk ourselves into a downturn just because it suits some people's negative political narrative. Unemployment, interest rates and Government debt are all low, giving the economy a solid platform to keep growing and face any global headwinds.

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The Treasury accounts for the year to June 2019 showed a $7.5 billion surplus. This is because of the stronger economy, and also includes a number of one-off factors including revaluation of the country's rail assets.

Net debt has fallen further to sit at 19.2 per cent of GDP, down from 19.9 per cent a year ago and below the 20 per cent target in the Budget Responsibility Rules.

Corporate profits, employment and wage growth were higher than expected in the May Budget. This contributed to tax revenue coming in 2.1 per cent above forecast.

The accounts show the Coalition Government continues to increase investment in areas that were neglected by the previous government. Capital investment, including in new hospital buildings, classrooms, roads and rail, and the Super Fund was up 13.7 per cent over the year.

New Zealand is well positioned for this point in the economic cycle and any global shocks that may come our way. We are increasing infrastructure investment and boosted spending in key areas like Police, health, education and research and development.

Our strong position gives us the space for further opportunities to strengthen our economy as is necessary.

The accounts show we have the balance right. We are tackling long-term challenges by investing in hospitals, schools and transport infrastructure while managing the books responsibly. We are making our economy stronger to make sure we remain resilient and have room to move to support New Zealand through any further challenges ahead.

Stuart Nash is the MP for Napier and the Minister of Police