20 May, 2011
Building our future: Budget 2011
BUDGET 2011: BUILDING OUR FUTURE
Yesterday Bill English delivered an excellent Budget. It's balanced. It's responsible. It's affordable. It's another step forward for New Zealand.
Budget 2011 sets out the next steps in National's plan to build faster growth, increase national savings, and create jobs. At the same time it protects vulnerable families. It also boosts frontline health and education services, and helps fund the rebuild of Canterbury.
I'm proud to say the economy is on a much sounder footing than it was before National came into office in 2008. Budget 2011 shows the future outlook is strong.
New Zealanders can look forward to faster wage growth and more jobs. They can also look forward to returning to surplus by 2014/15 - a year earlier than forecast last year. That means we can start repaying debt sooner, keep interest rates lower, and build a brighter future for Kiwi families.
BUILDING SAVINGS AND INVESTMENT
In the Budget we're proposing a few changes to KiwiSaver, Working for Families, and student loans. We're also proposing to extend the mixed-ownership model for State-Owned Enterprises. These changes are about encouraging individual and national savings, and building a stronger economy.
None of the changes will take effect before the election - so we're giving voters all the information they need to make a choice on November 26.
MIXED OWNERSHIP: MORE SAVINGS OPPORTUNITIES
National wants to extend the mixed-ownership model to four state-owned energy companies and reduce its majority shareholding in Air New Zealand - while retaining majority control. I believe there is significant merit in extending the mixed-ownership model to these companies. It'll help reduce Government debt, increase investment opportunities for Kiwi mum and dad investors, and improve the companies' financial performance.
Click here to find out more about our mixed ownership policy.
WORKING FOR FAMILIES: TARGETING FAMILIES IN NEED
Our Working for Families changes mean some families higher up the scale will be slightly worse off or will no longer qualify. But about 280,000 families will be better off. It's about targeting those families who are most in need.
Click here for a one-page summary of our Working for Families policy.
KIWISAVER: ENCOURAGING PRIVATE SAVINGS
KiwiSaver costs the Government $1.2 billion a year and we have to borrow that money from overseas. That's why we're proposing to increase contributions by employees and employers, and reduce government contributions. It means we can pay off debt sooner and get on with building a stronger economy.
STUDENT LOANS: KEEPING THEM INTEREST FREE
Our interest-free student loan scheme is one of the most generous in the world and we want to ensure it remains sustainable. That's why we're proposing a few changes aimed at encouraging borrowers to repay their debt, and tightening up eligibility criteria. It's about encouraging personal responsibility and getting better value for taxpayers.
Click here for a one-page summary of our student loan changes.
BETTER PUBLIC SERVICES
Budget 2011 frees up $5.2 billion over four years for vital public services and paying off debt, by cutting administration and other backroom costs. We're spending more on health and education than ever before - health gets an extra $2.2 billion over four years, and education gets an extra $1.4 billion over four years.
To help build a safer New Zealand we've boosted law and order funding by $157 million over two years. And to unclog the growth arteries in our economy we're spending $1.6 billion on infrastructure such as broadband, schools, and KiwiRail.
I announced our Youth Employment Package shortly before the Budget. We're putting in $55.2 million to support 13,000 young people into jobs over four years. (Note, in the last edition of Key Notes it was incorrectly stated that it would be 15,000 young people.)
Budget 2011 helps rebuild Canterbury by setting aside $5.5 billion over the next six years. We're showing Cantabrians that the Government is backing them in the weeks, months, and years ahead.
Click here for a one-page summary of our plan to rebuild Canterbury.
FROM MY DIARY
Today I spoke to the Trans-Tasman Business Circle in Auckland. Read my speech here.
I'm looking forward to enjoying one of my favourite foods - oysters - at the Bluff Oyster Festival tomorrow. Then I'll be off to catch up with National Party members at the Mainland National Party Conference in Christchurch.