18 May 2011

Books need to get back in order, says PM

8:42 pm on 18 May 2011

The Prime Minister says the Budget will be an unusual one for an election year but believes New Zealanders understand that the books must be brought back in order.

The Budget on Thursday will be one of the most austere in years, with the Crown accounts showing the deficit for this financial year will be close to $17 billion.

The Budget is expected to show the Government will spend $70 billion, with new spending on health and education. That money comes from transfers within those portfolios and cuts from elsewhere.

The Labour Party stepped up attacks on the Government in Parliament on Wednesday over its policies and the high cost of living.

But Prime Minister John Key says the Budget and the election on 26 November will be a test about economic management.

Mr Key says Labour has unfunded promises but New Zealanders know if the books are not brought back in order, there will be higher interest rates and a ratings downgrade.