Bold budget in New Zealand

WELLINGTON: The government lifted infrastructure spending by nearly 8 billion New Zealand dollars ($5 billion) to support jobs over five years in its annual budget yesterday as it more than doubles borrowing to steer the economy through the global recession.

In an unprecedented move, it shelved two rounds of personal tax cuts due in 2010 and 2011, suspended government cash injections into state retirement funds and slowed some areas of government spending to avert an even bigger debt blowout in the next decade.

Even with these measures, figures showed the government's deficit for the budget year ending June 30, 2009 is likely to reach $2.9 billion New Zealand dollars - the nation's first deficit in nine years - and swell to $7.7 billion New Zealand dollars the following year.