The New Zealand government is trying to spend billions of dollars to rebuild hospitals and schools and improve infrastructure as the economy continues to grow in healthy way. The government announced the first budget plan since it won the election last year.
The government has abandoned tax cuts planned by the previous government and has put more funds into health, education, housing and foreign aid. The government expects to achieve a slight operating surplus, and the substantial increase in infrastructure spending has not been included in these figures, which means adding more debt for a few years to come. New Zealand's net debt is about 22% of GDP.
The budget allocates NZ $ 82 billion (US $ 57 billion) for about $ 750 million to repair hospital problems as part of a larger plan to spend $42 billion on infrastructure projects over the next five years. The health-care budget will increase by $3.2 billion over the next four years.
The Treasury Department forecasts that the New Zealand economy will continue to grow at an annual rate of nearly 3% over the next few years and that unemployment will fall from its current level of 4.4% to 4.1%.
