Budget forecasts unrealistic, households feel worse off

 The economic growth forecasts which underpin this week’s Budget are seen as unrealistic by 49% of New Zealanders.

The first nationwide post-Budget HorizonPoll  of 1,154 people, conducted between 11.5am Friday May 20 and 6.30am Saturday May 21 (maximum margin of error at a 95% confidence level of +/- 2.9%) finds:

• 37.3% feeling dissatisfied overall about the Budget, 24.2% satisfied and 35.2% neither satisfied nor dissatisfied (3.2% don’t know)

• 38.6% of households thinking they will be worse off as a result of the Budget (1.6% better off, 54.7% the same, 5.1% unsure)

• 34.5% of households thinking they will now cut spending (7.9% spending more, 52.4% the same, 5.1% unsure)

• 32.2% think the Budget will make New Zealand worse off long term, 24.2% better (30.2% about the same)

• 41.4% think the country is generally headed off on the wrong track (38.2% right track). This is a fall from 48.4% wrong track and a rise from 34.6% right track in results for polling in the week before the Budget (May 12 and 15)

• 35.3% generally approve of the Government’s economic management (32.8% last week), while 38.7% disapprove (43.8% last week, a 5.1% fall in disapproval).

The Government’s Budget statement forecasts economic growth at 4% next year and that 170,000 new jobs will be created over the next 4 years.

With this growth, combined with proposed expenditure cuts and asset sales, the Government plans to reduce the amount it needs to borrow by $5.6 billion over the next five years and return the budget to surplus in the 2014/2015 financial year. 

However, only people who voted National in 2008 are more likely to consider the growth forecast realistic (38.3% realistic, 29.2% neutral and 25.7% unrealistic).

Among voters for the other governing coalition parties in 2008, 51.3% of ACT voters, 77.1% of Maori Party, and 60.2% of United Future voters consider the forecasts unrealistic.

Among business executives and managers, 34.3% say the forecasts are realistic, 32.9% are neutral and 26.5% say unrealistic.

In the finance and insurance industries, 57.8% think the projections are unrealistic (21.8% realistic, 36.3% neutral).

In the retail sector, 58.7% think the forecasts realistic, 13% realistic.

In comments on the projections, many respondents say sufficient evidence for the projections has not been presented and Treasury has made incorrect growth forecasts in the past. Those thinking the forecasts realistic generally cite confidence in Prime Minister John Key.

Overall, 47.2% of people think they are worse off since the last general election, 13.6% better off, and 32.4% no better or worse off while 6.8% don’t know.

The survey continues at www.horizonpoll.co.nz

MAIN RESULTS DETAIL

Kiwis say why they think the forecasts are realistic or unrealistic in 20,000 words.

Budget economic and job growth assumptions results by occupation, sector and party vote 2008 are here.

METHODOLOGY

Horizon Research - Budget 2011 survey

11.45am Friday May 20 – 6.30am May 21, 2011

Respondents = 1154. Weighted by age, gender, ethnicity, region, personal income and party vote 2008 to provide a representative sample of the New Zealand population. The maximum margin of error at a 95% confidence level is +/- 2.9%.

Members of the nationwide HorizonPoll panel are selected and invited to join based on the New Zealand population profile at the 2006 census. Pre-weighted respondents groups may then be invited to respond to surveys, and results further weighted to ensure a representative population sample is achieved.

For further information please contact:

Manager: Grant McInman

Telephone: 021 076 2040

E-mail: gmcinman@horizonresearch.co.nz