This issue of Key Notes outlines some of our planning for Budget 2012, covers our new reforms to the welfare system, discusses spending for  both tertiary education and our programme to reduce rheumatic fever in vulnerable communities - and touches on a few events from my diary. Click here to watch my latest video journal

Working on the Budget
We're now less than two weeks away from delivering our fourth Budget to New Zealanders. This year's Budget, on 24 May, will outline what we're doing to deliver on our plan to build a brighter future for you and your family through our four main priorities.

Last week I delivered a pre-Budget speech in Wellington I talked about the importance of meeting our commitment to get back to surplus by 2014/15, while continuing our wider long-term programme to build a more competitive economy that supports more jobs and higher incomes for New Zealanders. We need to prioritise how we spend your taxes to ensure we deliver better and measurable results from our public services.

Reforming welfare
On Monday, alongside Social Development Minister Paula Bennett, I announced funding for the first phase of our welfare reforms.  Budget 2012 will include an additional $287.5 million over the next four years, for welfare reform.

Welfare will always be there for those in genuine need.  But 12 per cent of our working age population is on welfare and 220,000 children live in benefit-dependent homes. It's trapping entire families in poverty and it's costing too much.  Our reforms are firmly focused on reducing the long-term social and financial costs of welfare dependency by getting more people back into work.

We're doing a number of things to support people into work, including helping with childcare costs, putting dedicated Work and Income staff in place to support jobseekers, and giving more assistance to young people to encourage them to make better choices.

We've always been very clear that our welfare reforms require up-front investment for long-term gain. Budget 2012 provides the funding to tackle long-term welfare dependence and help Build a Brighter Future for more Kiwi families.

Rebalancing spending for tertiary education
Another area where we'll be making changes in the Budget is in tertiary education.  Since National came into office we've maintained our generous system of student support, kept loans interest-free, and helped build a more highly-skilled workforce.

We've already achieved some great results.  We're funding more tertiary places, we've simplified the qualifications system, and we've improved courses to ensure students are studying towards a successful career.

In Budget 2012 we'll rebalance our overall spending in tertiary education between expenditure on student support and investment in tuition and research.  We remain committed to interest-free student loans, but we're making changes that will require graduates to pay back their loans faster, by increasing the repayment rate from 10c in the dollar to 12c.  Our changes will mean annual savings of $60 to $70 million, which we can re-invest in the next generation of students.

Combating rheumatic fever
This week I also announced that Budget 2012 will fund an additional $12 million to reduce rheumatic fever in vulnerable communities. I made this announcement with Associate Health Minister Tariana Turia, who is a passionate advocate for this initiative.  This investment doubles the Government's total rheumatic fever package to $24 million, and it will help us target 35,000 at-risk children in seven regions.

Rheumatic fever is an entirely preventable third-world disease that can have serious consequences for children throughout their lives.  Tackling this disease is something I am personally championing. It's so important to achieve results in this area, that I've made it one of our top 10 result areas in our drive to provide better public services.

From my diary
Yesterday I was in Queenstown for the final day of TRENZ, an important trade show for Kiwi tourism operators.  This weekend I will be heading to sunny Hawke's Bay for the second National Party regional conference.  This will be a great chance to catch up with our supporters from across the lower North Island, and update them on our progress towards a brighter future.

Keep an eye out as we'll be making some more pre-Budget announcements next week.

Regards,

John Key
Prime Minister

www.johnkey.co.nz

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