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A new Investment Protocol under the Closer Economic Relations (CER) trade agreement further strengthens the investment relationship between Australia and New Zealand, Finance Minister Bill English says.

Australian Prime Minister Julia Gillard and New Zealand Prime Minister John Key signed the Investment Protocol in Wellington today.

After tax wages are continuing to rise faster than prices, reflecting the benefits of the income tax cuts last year and ongoing wage rises.

“We do understand that times still remain challenging for many New Zealanders. What really matters for them is whether their wages are rising faster than the cost of living,” Finance Minister Bill English says.

“While we don’t know everyone’s individual circumstances, average after-tax wages have increased 16 per cent and consumer prices have gone up 6 per cent since September 2008.

Finance Minister Bill English today confirmed Budget 2011 will be delivered on Thursday, 19 May - focusing squarely on taking further measures to build New Zealand’s national savings and reducing vulnerability to foreign debt.

“In our first Budget, the National-led Government steered the economy out of recession and the global financial crisis, and mapped a credible path back to budget surplus,” Mr English says.

The Government will carefully consider the Savings Working Group’s final report issued today and any immediate policy decisions are likely to be included in the Budget later this year, Finance Minister Bill English says.

“This report will not only assist ministers in considering the Government’s next steps in building a stronger economy, it will also help an informed and open public debate on the national savings challenge facing New Zealand.

The annual cost of Labour’s spending promises is $5 billion and climbing – and Phil Goff still can’t explain how he will pay for them, Finance Minister Bill English says.

“Every time he opens his mouth, Goff confirms that Labour’s borrow and hope recipe would add hundreds of millions of dollars more to Government borrowing. That would saddle New Zealand with more debt to foreigners, which would have to be paid back with interest.

Finance Minister Bill English, Economic Development Minister Gerry Brownlee and Environment Minister Nick Smith today announced the establishment of an Advisory Group on Green Growth in enabling New Zealand to grow the economy while enhancing our clean, green brand.

“This new initiative is another part of the Government's plan to build a faster growing economy," Mr English said, announcing the advisory group at the National Party’s Bluegreens forum in Akaroa. 

Finance Minister Bill English and State Owned Enterprises Minister Simon Power have formally asked Treasury for advice on the merits and viability of extending the mixed-ownership model to four more state-owned enterprises.

As Prime Minister John Key outlined this week, the ministers have asked for advice on the merits and viability of:

Phil Goff should focus on explaining to New Zealanders how he will pay for his own reckless economic policies rather than deliberately misrepresenting the Government’s economic programme, Finance Minister Bill English says.

"Phil Goff has this week made promises that will leave a hole of more than $1 billion a year in the Government’s books, which Labour will have to borrow to fill or increase taxes on hard-working middle income earners.

"In the meantime, they are reverting to misinformation about the Government’s economic programme.

Government financial statements for the five months ending 30 November show both revenue and spending broadly in line with forecasts in the Half-Year Update in December, Finance Minister Bill English says.

“While there were some overs and unders on the revenue side, overall the results were pretty much in line with those December forecasts,” Mr English says.

“But tax revenue still remained about $1 billion below forecasts issued with the Budget last May – mainly because of lower corporate tax and GST revenue.

Labour’s so-called state of the nation speech today is an irresponsible and very expensive recipe for a huge amount of extra borrowing, Finance Minister Bill English says.

“Labour has clearly learned nothing from the failed policies of its previous term, when New Zealand’s net liabilities to the rest of the world soared to more than $170 billion and we ran the highest balance of payments deficit in the developed world,” Mr English says.

The Government has extended the full range of support the New Zealand Export Credit Office provides to exporters for another three years, Finance Minister Bill English says.

"As the recovery takes hold, exporters still face difficulty getting the trade credit and financial guarantees they need to maintain existing overseas markets and establish new ones," Mr English says.

"This Government has made it clear that one of the best ways to ensure New Zealand grows strongly out of the recession is to increase exports and investment.

Excluding the one-off impact from the rise in GST, annual inflation stayed around 2 per cent in calendar 2010 and is forecast to remain relatively muted for the foreseeable future, Finance Minister Bill English says.

“Price increases put pressure on families, particularly after the difficult economic times we’ve had in the past two or three years,” he says. “So it’s important that we do all we can to take pressure off prices and interest rates.

Finance Minister Bill English has paid tribute to distinguished businessman Sir Richard Carter, who died last week.

“Sir Richard was one of New Zealand’s most highly respected business leaders and I was saddened to hear of his death,” Mr English says.

“He made a significant contribution to New Zealand business and the flow of tributes in recent days confirms the high regard in which he was held by colleagues.”

New Zealand’s economic recovery remains on track, despite figures today showing a small contraction in gross domestic product in the September quarter, Finance Minister Bill English says.

“Before this result, we had seen five consecutive quarters of growth since coming out of a deep recession. I’ve said all along that this recovery would be a bit bumpy at times, and that’s proved to be the case.

Hon Maurice Williamson and Hon Kate Wilkinson have today declined consent to Natural Dairy (NZ) Holdings Limited to acquire the Crafar farms.

The Ministers’ decision covers the applications by Natural Dairy (NZ) Holdings Limited to acquire UBNZ Assets Holdings Limited and 16 of the Crafar farms.

The Ministers also declined consent to UBNZ Assets Holdings Limited’s retrospective application to acquire the four Crafar farms it purchased in February 2010.

Budget 2011 will ensure the Government plays its part in improving New Zealand’s national savings by controlling spending increases and setting a credible path back to budget surplus, Finance Minister Bill English says.

“The Budget next year will clearly outline the next steps in the Government’s programme to lift economic growth, with a particular focus on improving national savings and reducing our reliance on foreign debt,” he said in releasing the Budget Policy Statement and Half Year Economic and Fiscal Update.

The Government's first Investment Statement will drive improvements in the Crown's investment decisions and how it manages its $223 billion of assets and $128 billion of liabilities, Finance Minister Bill English says.

“Effective management of the Crown's assets and liabilities and making the best investment decisions is important if we are to realise our economic goals and deliver better public services,” Mr English says.

A new directive letter to the Overseas Investment Office provides extra clarity and certainty for potential investors about the Government’s general approach to foreign investment in sensitive assets, Finance Minister Bill English says.

The letter sets out the changes to regulation the Government announced in September to address concerns around large scale overseas ownership of farm land and vertically integrated primary production companies.

A new report analysing results from government-owned companies and investment funds will help improve their performance, Finance Minister Bill English and State Owned Enterprises Minister Simon Power say.

The Treasury’s Crown Ownership Monitoring Unit today published the first of what is expected to be a series of annual publications about the performance of the 37 Crown-owned entities that have full or partial commercial objectives.

Proposed new tax rules, released today, will increase the integrity of the tax system and help ensure everyone pays their fair share, Finance Minister Bill English and Revenue Minister Peter Dunne say.

Mr Dunne today released a Supplementary Order Paper (SOP) that will introduce several Budget 2010 tax measures to the Taxation (GST and Remedial Matters) Bill, which is nearing its final stages in Parliament. MPs are expected to debate the amendments on Thursday.

The proposed changes, which have been finalised after public consultation over the past few months, will:

Larger than forecast deficits in the Crown's financial statements reinforces the need for tight fiscal discipline alongside the Government's ongoing efforts to move resources to frontline services, Finance Minister Bill English says.

Lower than forecast tax revenue combined with the fiscal impact of the Canterbury earthquake have contributed to a $4.4 billion operating deficit before gains and losses in the four months to 30 October.

New Zealand and Hong Kong have concluded a double tax agreement, Finance Minister Bill English and Revenue Minister Peter Dunne announced today.

Mr English and Hong Kong’s Financial Secretary John Tsang signed the agreement in Auckland.

"This agreement is an important step forward in strengthening our economic relationship with Hong Kong,” Mr English said.

Standard and Poor's decision to put New Zealand's foreign currency rating on negative outlook highlights the need to reduce our heavy reliance on foreign debt, Finance Minister Bill English says.

A sustainable economic recovery is underway and will pick up momentum next year as the Government continues to roll out its economic plan, Finance Minister Bill English says.