Govt not 'hell-bent' on surplus - Key

John Key
John Key

John Key says he has his fingers crossed the Government will post a surplus for the year to June, but he's not "hell-bent" on getting there.

But speaking on the Paul Henry programme this morning, the Prime Minister said if the deficits keep coming, there could be trouble.

"Our whole argument has been it's a demonstration that we're managing the economy well, and like any household, if you spent more than you earn for long enough then you become indebted to your bankers, and eventually it's called Greece," said Mr Key.

Last week Westpac released a report which predicted GDP growth to fall below 2 percent and unemployment to rise to 6.5 percent, but Mr Key says it's not as bad as it sounds.

"I read that Westpac report. Man, there's a complete disconnect between the language [Westpac chief economist] Dominick Stephens uses when he writes the thing, and the numbers.

"He says this will be ferocious and that'll be bad, and then the numbers say we're going to grow at 2, 2.5 percent. Most countries in the world would be pretty happy about that."

Mr Key isn't ruling out increasing spending to stimulate the economy, but insists it's not needed quite yet.

"Nothing has stopped us in the past – you've always seen us step up and do things."

Labour says without intervention, the outlook for the economy is "pretty grim".

"We're looking at a significant downturn and if we're not careful we're heading to a recession," finance spokesperson Grant Robertson said last week.

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