New Zealand deficit-cut target gets tougher

New Zealand deficit-cut target gets tougherIt is believed that the government of New Zealand might be unable to meet its target of reducing the deficit and returning to surplus in the coming three years due to a higher than expected fiscal deficit.

According to the latest figures released by the government, budget deficit in the year to June 30 was 9.2 billion New Zealand dollars, which is higher than the NZ$8.4 billion expected by the government's Treasury department in May.

The higher than expected deficit might make it much harder for the government to meet its target of returning to surplus in 2014-15. However, it is noted that the government was able to halve the deficit from $18 billion to just over $9 billion during the year.

Prime Minister Key said, "We're heading in the right direction. We're not in bad shape relative to other countries but it's still tough on people who don't have a job."

The achievement of bringing the deficit to half of its level in the previous level, is seen by many as an achievement and it indicates that the government is in a much better position to handle its financial position. Among the positives, the country's tax revenue rose$3.5 billion overall while the government spending fell $1.4 billion. He also said that the economy is growing and thus the people are able to play more taxes.