Agriculture well on track

"We have long advocated for economic restraint, and it is great to see the $86 million surplus forecast for 2014/15 is up ever so slightly on the surplus forecast in May," says Bruce Wills, Federated Farmers president.

"Agriculture has had a great start, with the tradable sector growing 11.1% since 2009 compared with non-tradeables up 6.6%, however resource pressures are growing and next year we will likely see a tightening of monetary policy to dampen inflation," says Wills.

"Farmers and exporters will need the Government to keep spending and debt under control in order to take the pressure off interest rates and the exchange rate.

"Looking further afield, surpluses are looking healthier, with a $5.6 billion projected surplus for 2017/18. These growing surpluses will put the Government in a better position to reduce its debt, which is forecast to peak at $64.5 billion in 2015/16. This had risen significantly as the Government worked to 'take the edge off the recession'. Paying down debt remains an important focus as it improves the resilience of the economy and our ability to absorb future shocks.

"Leading into an election year, the Government and opposition parties will need to do their bit by committing to responsible fiscal policy, which does not work against monetary policy. The last thing we need is for politicians to spend the surplus before it arrives.

"This is the kind of news you want after a challenging few years, with the Global Financial Crisis and the Canterbury Earthquakes. Federated Farmers continues to support the Government in its efforts to keep spending under control and its aim to rebalance the economy towards sectors that compete internationally," says Wills.