22 June 2012
Progressing our partial share offer programme
This issue of Key Notes is devoted to three central issues - our partial share offer programme, superannuation, and our voluntary bonding scheme for graduate doctors, nurses, and midwives.
Click here to watch my video briefing on this important issue.
Progressing our partial share offer programme *
This week, the Bill enabling our partial share offers has been back in Parliament. Our plan to sell New Zealanders minority shareholdings in four state-owned energy companies, and reduce the Government's controlling shareholding in Air New Zealand, will help us build a stronger economy by getting on top of debt, which is good for all New Zealanders. And it will ensure Kiwi investors are at the front of the queue for shares.
We're changing the mix of assets the Government owns so we can control debt and invest in priority assets, such as modern schools and hospitals. We're selling a small part of some assets, to pay for others that New Zealanders need - without having to borrow more from overseas lenders in uncertain global markets.
We have been very upfront about our plan to partially sell shares in these state-owned companies. We announced this policy early last year, and we campaigned on it at the election. New Zealanders overwhelming gave us our mandate to carry out our economic plan.
It's a sensible policy for our future to ensure we can continue providing the assets Kiwis need, while keeping debt levels under control. You can read more about it on National's website.
Gross Domestic Product (GDP) figures showing improvement
We've had some good news this week, with GDP data showing our economy grew 1.1 per cent in the first quarter of this year, which was considerably stronger than expected.
This is another reason why we can be optimistic about the New Zealand economy despite the uncertain international mood. But it does reinforce why National needs to continue with our strong plan to get back to surplus and ensure our economy is as competitive and productive as it can be. These are two of our four priorities for this term of Government.
Keeping our word on Superannuation
New Zealand Superannuation has been in the news again recently. I have always been very clear about National's policy on Superannuation. While I am Prime Minister, the married rate of Super will be at least 66 per cent of the average wage for people 65 and over.
This is affordable under the Government's current policy settings and the costs are built into our long-term forecasts.
It's important to note the cost of giving older New Zealanders the financial security they deserve, is less than you might think. Currently, New Zealand spends 4.6 per cent of its GDP on Superannuation. This is forecast to grow to between 7 and 8 per cent as the population ages. This is considerably lower than many developed countries. The average per cent of GDP developed countries spend on elderly benefits is closer to 9 per cent. Some countries, such as France and Germany, already spend more than 10 per cent of their GDP on elderly support.
Raising the age of eligibility to 67, which other political parties such as Labour are advocating to help pay for their expensive spending promises in other areas, will save New Zealand only 0.7 per cent of GDP. This small saving isn't worth the trade-off that would see you working longer. National's plans for a stronger economy will ensure we can meet the future challenges of an ageing workforce.
Voluntary bonding - delivering on our promises
We've delivered on another of our election promises through the successful voluntary bonding scheme for graduate doctors, nurses, and midwives. The scheme encourages graduate health professionals to work in hard-to-staff and vulnerable communities. In exchange, the Government will offer payments towards their student loans after a three-to five-year bonded period.
More than 250 students have completed three years of work in a hard-to-staff area, and they're now starting to reap the rewards of this. The Government has approved payments of over $2.7 million for these graduates.
We're committed to ensuring that all New Zealanders have access to the frontline health care that they need. Voluntary bonding is helping us to achieve this in hard to staff communities and specialities.
From my diary
Last week I hosted 50 US Marines and an equally strong Marine band for a number of events in Wellington marking 70 years since US forces landed in New Zealand during World War Two. Today I've spent the day in Whanganui with our local MP Chester Burrows.
This weekend I'll be at home in Auckland with my family watching the All Blacks take on Ireland in the final test in Hamilton. It will be great to see another win by our boys to take out the series. Next week I'll be back to Wellington for another sitting of Parliament before we take a two week recess.
* Pre-Prospectus Disclaimer
The Crown is considering offering shares to the public in one or more of Genesis Power Limited, Meridian Energy Ltd, Mighty River Power Ltd, Solid Energy New Zealand Ltd and Air New Zealand Ltd. No money is currently being sought and no applications for shares will be accepted or money received until after an investment statement containing information about the relevant offer of shares is available.