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New Zealand should spend cautiously, fiscal rules expected


© Reuters. FILE PHOTO – Grant Robertson (New Zealand’s Finance Minister) speaks out about the budget for “wellbeing”, in Wellington, New Zealand on May 30, 2019. REUTERS/Charlotte Greenfield/File Photo

Lucy Craymer

WELLINGTON (Reuters] – New Zealand’s Finance Minister said Tuesday that government should be cautious with spending. The minister also suggested the inclusion of new fiscal regulations in the Budget next month.

Grant Robertson, the finance minister said at a press conference that “it’s important to use fiscal policy sensibly” to help ensure New Zealand doesn’t have too much debt. He also stressed that New Zealand should invest in the right things.

After some previous fiscal targets had been suspended while the government dealt with the COVID-19 pandemic, he said that new fiscal rules will be implemented at the May budget.

Robertson however stressed the importance of infrastructure projects, such as those to overhaul the country’s healthcare system.

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“It is vital that we do not cut our noses to spite ourselves and remove funding,” he stated.

New Zealand’s central banks have raised interest rates four times in succession and indicated that they would increase them in future quarters. They expect annual inflation to reach 7% by the end of the year.

The rising cost of living has also led to calls by opposition members to the government for fiscal policy in order to reduce inflation.