ANZ on today's HYEFU: "As expected,.....>

NEW ZEALAND: ANZ on today's HYEFU: "As expected, the Treasury's Half-Year Update

showed the Government's books are expected to remain in good shape over the next

five years. A stronger starting point has not convinced the Government that now

is a good time to increase spending. The Minister of Finance continues to walk

the path of fiscal prudence. While there appears to be a little wiggle room

based on the net debt forecasts, he reiterated that given global uncertainties,

now isn't a good time to push the limits of the debt constraint. There is little

in here that should engender a market reaction. Once again, the Treasury's

economic outlook underpinning the fiscal forecasts is more optimistic than our

own, but this has been downgraded. On our growth numbers the books would still

improve over the years ahead, but it would take a little longer to meet the debt

target, and/or require cost savings further down the track. The Government's

Budget Policy Statement included five new well-being priorities that will guide

spending decisions in the 2019 Budget. There were no changes to the five Budget

Responsibility Rules. The next big event on the fiscal side will be the Tax

Working Group recommendations in February."