Prime Minister John Key is being accused of using
excuses to explain a poorly performing economy after saying the
government might have to abandon its target of returning to surplus in
2014/15.
In his first major speech of the year on Thursday he said
the government was on track to achieve the target, although the surplus
was now forecast to be about $500 million compared with the
pre-election forecast of $1.4 billion.
"If the absolute worst
happened and there was a major shock to the global economy, the
government would look at whether retaining that surplus target would
actually harm the economy," he said.
Labour, which has the same target, says Mr Key is accepting economic decline.
"The prime minister is using Europe to set us up for economic under-performance," party leader David Shearer said on Friday.
"John Key's spin now is to talk up a decline."
The
party's finance spokesman, David Parker, says the European crisis and
the worsening international economic climate were known at the time of
election but the government insisted it could achieve a surplus of $1.4
billion.
Council of Trade Unions economist Bill Rosenberg says the government shouldn't have set the target.
"People were talking about the European crisis during the election campaign," he said on Radio New Zealand on Friday.
"The government has put itself into a corner."
BusinessNZ chief executive Phil O'Reilly says there's deep concern about declining markets for New Zealand's exports.
"We
always thought the target was a stretch and the government has to be
careful not to cut spending and make the economy fall over," he said.
"At the same time it has to have a balanced view and be fiscally prudent."
NZN