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New Zealand Finance Minister Bill English on Thursday defended the government's goal of returning to an operating surplus next year, saying it would help protect the country against ongoing global risks to economic recovery.
English, who returned this week from a visit to the United States, said the U.S. budget stalemate was the latest in a number of global risks to the New Zealand economy.
"As we've said all along, we cannot influence these global issues, so we need to focus on what we can influence, such as New Zealand's competitiveness, better public services and the government's own financial performance," he said in a published speech to the Institute of Finance Professionals New Zealand in Auckland.
"Together these global events provide a timely reminder to everyone from politicians, to businesses and to households, that we cannot be complacent about the progress we've made in the past four or five years."
New Zealand could improve economic resilience and competitiveness by returning to budget surplus and addressing potential threats to financial stability, such as the country's runaway house prices.
"We want to avoid a repeat of the dangerous house price bubble that developed in the mid-2000s, when house prices doubled in five or six years, floating mortgages rates exceeded 10 percent and household debt got dangerously high," said English.
"That's why we're addressing the underlying causes of fast- rising house prices by freeing up more land, removing costly red tape and looking at construction sector productivity."
Under current settings, interest rates were not expected to return to anywhere near their 2008 levels of more than 10 percent, he said.
Earlier this month, Reserve Bank of New Zealand (RBNZ) governor Graeme Wheeler warned interests rates could soar if new restrictions on high loan-to-value mortgages failed to curb the overheating housing market.
Wheeler was defending the RBNZ's move this month to restrict banks to lending no more than 10 percent of their mortgages to people with deposits of less than 20 percent of the value, which critics argue will lock many first-home buyers out of an already expensive market.
