25 May 2012
Key Notes - Investing in our future
In this issue of Key Notes, I talk about the main points in the National-led Government's fourth Budget.
Yesterday Bill English delivered National's fourth Budget. Our Budget is responsible and sensible, given the world economic climate, and it addresses some of the major issues that we're facing as a country.
It delivers on our promises, and outlines the next steps in National's plan for a Brighter Future. Our plan has four priority areas, and the Budget is firmly focused on these, which are:
- Responsibly managing the government's finances
- Building a more competitive and productive economy
- Delivering better public services
- Rebuilding Christchurch.
When National came into office in 2008, the country was in recession and we faced a decade of deficits. But we've stuck to our strong plan to rebuild and strengthen our economy, and New Zealanders have got reason to be optimistic. We've seen growth in 9 out of the last 10 quarters, and that growth is forecast to continue.
Responsibly managing the Government's finances
National's Budget confirms that we are responsibly managing the Government's finances. We're doing this by getting back to surplus in the 2014/15 financial year.
Budget 2012 forecasts a surplus of $197 million in 2014/15. We're achieving this by making savings in some areas, to pay for our frontline priorities. Like your family, we know that spending more than you earn isn't responsible or sustainable in the long term.
Getting our books back to surplus helps keep mortgage rates lower for longer, it helps take the pressure off the exchange rate, and it will help to insulate our economy against any future economic shocks, which is important in a world that remains economically unstable.
Building a more competitive and productive economy
We're focused on creating the right conditions to help Kiwi businesses grow and compete on the world stage. We've made innovation a priority for investment in Budget 2012 because we recognise that our future economic performance depends on generating and using new ideas.
The Budget includes $326 million of operating and capital funding for science and innovation over four years, including $166 million for the Advanced Technology Institute to help high-tech firms get their best ideas out of the lab and into the marketplace faster. To complement this, we are also investing in training more engineers and scientists.
We'll also reinvest the proceeds from our partial sale of four state-owned enterprises and Air New Zealand, into vital infrastructure. Budget 2012 identifies the first projects that will benefit from mixed ownership - new hospital buildings, modernising our schools, and supporting KiwiRail.
Delivering better public services
Budget 2012 prioritises spending to the services you and your family need.
We're boosting funding for health by almost $1.5 billion over the next four years. I know how important it is that our health system is there when you and your family need it. That's why we're committed to achieving even better results from our health system, such as more elective surgery, and better, faster services for cancer patients.
Another high priority area for National in Budget 2012 is raising achievement in education for our kids. We want every child to leave school with the knowledge and skills they need to reach their potential in the 21st century. That's why we're injecting over $500 million more into education over four years. We'll ensure that more kids have the chance to participate in Early Childhood Education, we'll lift the level of quality teaching in our classrooms, and we're going to modernise schools by reinvesting some of the proceeds of our limited asset sales programme.
I've been very clear that the Government wants to see better results from the public services that New Zealanders need. We'll set specific and measurable targets that we expect the public service to achieve over the next three to five years. Budget 2012 confirmed three specific targets, and we'll announce the remaining seven in the next few months. The three targets we have confirmed are:
- 85 per cent of 18-year-olds will have NCEA or equivalent in five years.
- Prisoner reoffending will reduce by 25 per cent in five years. Reaching this target would mean there are 18,500 fewer victims of crime every year.
- 98 per cent of new entrants will have participated in early childhood education before school within five years.
Our final priority for our current term in Government is the rebuild of Christchurch. We're committed to doing what it takes to maintain momentum for Cantabrians, and we're making some great progress.
EQC has fully repaired over 15,500 homes, and there are a further 35,000 repairs underway across the region. We've completed around $165 million worth of infrastructure repairs such as waste and storm water, and roading repairs. And the Government has made purchase offers to more than 6000 red zone homeowners, with over two-thirds of home-owners accepting the offer already.
The rebuild of Christchurch is the largest and most complex economic project that New Zealand has ever seen. That's why we've invested $5.5 billion and established the Canterbury Earthquake Recovery Authority (CERA) to lead the rebuild.
From my diary
Today I delivered a post-Budget speech to the Trans-Tasman Business Circle in Auckland.
This weekend I'm going to be in Auckland at the Northern Regional Conference. This is the last of our regional conferences for the year, so it will be good to update our Northern supporters on our progress towards a Brighter Future.