SUBSTANTIAL FISCAL AND SOCIAL PROGRESS

The Budget combines progress towards the fiscal objectives of the Government with substantial advances in economic and social well-being for New Zealanders, Finance Minister Bill Birch said.

He said the Government, by controlling expenditure, reducing debt and enabling continuing operating surpluses, made a major contribution to a stable environment for investment and other business decisions.

"This Budget reinforces this prudent approach by reducing policy initiative intentions by $300 million," said Mr Birch.

"This government has acknowledged the changing environment, in particular, events in Asia and the increase in New Zealand's current account deficit."

He said Budget forecasts showed:

Surpluses every year rising from $1.3 billion in 1998/99 to $3.0 billion in 2000/01

Net debt repayments of $2.2 billion over the next three years

Net worth increasing by $6.3 billion over the next three years.
At the same time, major announcements have been made in health, education, employment and law and order.

Mr Birch said that the Budget's forecasts indicate that the Government will reduce net debt to below 20% of GDP in 2000/01.

"To demonstrate this governments commitment to giving high priority to debt repayment, the long term debt objectives have been changed from 30% to 25% for gross debt and 20% to 15% for net debt.

"In order to achieve these targets the government would continue to take a prudent approach to expenditure.

"This Budget goes a long way towards delivering on our Coalition commitments," Mr Birch said.