Planning policies increase inequality, says English

The GFC and earthquakes may have become tired references that have almost lost their impact but they have defined Bill English's second tenure as Finance Minister. Photo / Mark Mitchell

Planning policies have probably increased inequality amongst New Zealanders more than any other policies through higher housing costs, Finance Minister Bill English says.

Mr English made the comment this afternoon when talking about the Crown's year end financial statements this afternoon which showed a fiscal deficit which was $338 million worse than expected at the August Pre-election Economic and Fiscal update.

Mr English used the briefing to again emphasise the Government's focus on addressing housing issues which featured in Prime Minister John Key's Cabinet reshuffle yesterday.

However, when asked about his comment suggesting inequality was increasing -- something he and Mr Key have previously refused to acknowledge -- he said what he meant was that rising housing costs due to land supply constraints had prevented inequality from abating.

Mr English said the Government would "persist with housing reforms to make housing more affordable for more New Zealanders particularly low income New Zealanders".

The Treasury figures this afternoon showed the Operating Balance before investment gains and losses was $2.93 billion -- $338 million worse than expected in the August Pre-election Economic and Fiscal update.

Tax revenue was $42 million lower than forecast in August while core Crown expenses were $176 million higher than expected, Treasury said this afternoon.

The higher expenses came from Canterbury rebuild losses being reclassified as expenses while Treaty of Waitangi-related expenses were $52 million greater than expected over the year to June.