15 May 2013

Improving Australia should boost NZ exporters - economist

7:22 pm on 15 May 2013

An economist says Australia's bigger-than-expected budget deficit should not hinder New Zealand's exporters.

The Australian Government has announced a $A19.4 billion deficit, and delayed the return to surplus by three years.

The Labor government wants to push the budget to a slim surplus of $A800 million in 2015/16 and deliver a $A6.6 billion in surplus the following year.

Australia is New Zealand's second largest trading partner, and AMP Capital chief economist Bevan Graham says its slowing economy has hurt exporters.

Mr Graham says the budget's mild spending cuts, and expectations of an improving economy and further interest rate cuts, should help local firms selling their wares across the Tasman.

He says the Australian government is not having to cut spending dramatically which would lower growth there and be bad for New Zealand.

Mr Graham says the government is taking a very pragmatic approach both in terms of what the Reserve Bank of Australia is doing with interest rates and in terms of getting the deficit back under control.