2025 report acknowledges long-term challenge

The second 2025 Taskforce report shows the Government has taken steps to lift New Zealand's sustainable economic growth, but catching up with Australia will be a long-term challenge, Finance Minister Bill English says.

"Budget 2010 took several steps in that direction - including across the board personal tax cuts on 1 October that narrow the gap in after-tax incomes with Australia," Mr English says.

"However the report shows just how challenging it will be to catch up to Australia by 2025, especially as we continue to recover from a recession - started under Labour - that Australia never had.

"Our first step has been to get the economy out of recession and growing again. We've now had five consecutive quarters of growth and we've put in place a broad programme of action, which will provide a platform for future growth.

"The Taskforce's report - part of ACT's confidence and supply agreement with National - raises some interesting ideas, which will hopefully generate constructive debate. The Government will consider some of those ideas, alongside the range of other advice we receive, and make practical decisions.

"However we disagree with the Taskforce report's authors about the ideal speed of reform.

"History shows that reforms done at breakneck speed tend to be fairly counterproductive. If you don't take the time to convince people of the benefits of change there's a good chance the next government will simply reverse them.

"We are already moving in some of the directions suggested in the report. As well as cutting personal and corporate taxes, we have put a cap on new Government spending, have put better incentives into the welfare system and are reviewing major regulation.

"But any changes must meet the tests of fairness and equity, be consistent with our election promises and occur at a sustainable pace.

"The only way we can permanently lift New Zealand's economic growth is through considered and consistent reform and change, year after year," Mr English says.