Treasury to reveal the state of govt's books

  • 15/12/2015
Finance Minister Bill English (Simon Wong/ 3 News)
Finance Minister Bill English (Simon Wong/ 3 News)

The Treasury is about to open the books and reveal its latest economic forecasts.

The half-year economic and fiscal update (HYEFU) today will show the state of the economy, future growth prospects and Finance Minister Bill English's chances of a budget surplus next year.

The Budget he presented in May forecast a wafer-thin $176 million surplus for the 2015/16 financial year.

That could have been eroded by very low inflation since the Budget and a cut in the official cash rate.

Both those factors tend to reduce tax revenue.

Mr English has been playing down the significance of budget surpluses and setting targets for them.

"We need to consider whether a target in a particular year is still the best option," he said when the final accounts for the 2014/15 year were released in October.

"Any new targets will be consistent with ensuring net debt is reduced over time."

The final accounts showed how unreliable forecasts can be when they're dealing with figures of a few hundred million within a budget of about $80 billion.

The May Budget forecast a deficit of $684 million for 2014/15 but when the final accounts were released there was a $414m surplus.

At the same time the HYEFU figures are released the Government will publish its 2016 Budget Policy Statement (BPS).

The BPS sets out the policy goals that will guide budget decisions between now and the 2016 Budget Mr English will present in May.