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Budget 2012 makes changes that will further improve KiwiSaver and lift investor confidence, Finance Minister Bill English and Commerce Minister Craig Foss say.

The Government will launch a smartphone and tablet app for Budget 2012 on Thursday, providing more ready access to Budget material and helping to reduce the need for printed documents, Finance Minister Bill English says.

“This is a good example of the Government’s focus on delivering better, more innovative, public services,” he says.

“It’s also in line with the Prime Minister’s expectation that New Zealanders will interact increasingly with the Government in a digital environment.”

A new legislative framework for the issuance of covered bonds by New Zealand registered banks will provide greater clarity for investors and depositors, Finance Minister Bill English says.

The Reserve Bank of New Zealand (Covered Bonds) Amendment Bill, introduced to Parliament today, provides for the Reserve Bank to maintain a register of banks’ covered bond programmes and provides greater legal certainty for investors in the unlikely event of a bank defaulting.

Finance Minister Bill English has welcomed a report from University of Otago researchers, which analyses changes in income and deprivation between 2002 and 2009.

“The report confirms there was substantial income mobility over the period, with many New Zealanders moving in and out of different income bands.

The Budget later this month will confirm the path back to surplus in 2014/15, despite lower than forecast tax revenue in the Government financial statements in the nine months to 31 March, Finance Minister Bill English says.

Core Crown tax revenue was $1.6 billion below the Pre-Election Economic and Fiscal Update forecast and overall revenue was lower by $1.8 billion. However this was offset by lower core Crown expenses of about $1.8 billion.

Budget 2012 will set out balanced decisions to ensure the Government remains on track to surplus in 2014/15, Finance Minister Bill English confirmed today.

In particular, it will address a $1 billion deterioration in the forecast operating balance before gains and losses in 2014/15 between the Budget Policy Statement in February and preliminary Budget estimates.

The Government intends to strengthen the Public Finance Act so there are more checks and balances on ministers’ spending decisions and their long-term effects, Finance Minister Bill English says.

“The fiscal responsibility provisions of the Public Finance Act, which include a high degree of public reporting and transparency, have served New Zealand well in terms of maintaining a focus on low debt since 1994,” Mr English says.

“However, the global recession and events in the years immediately preceding it point to the need for a broader focus.

Good afternoon. Thank you to the Wellington Employers’ Chamber of Commerce for inviting me back to speak to you again this year – it’s a pleasure to be here.

Our ministers value opportunities like this to share ideas about how we can meet the challenges we face as a nation - and how we can grasp the many opportunities we have.

So I look forward to your comments and questions at the end of this session.

The Government has received the Productivity Commission's final report on international freight services and will provide a thorough response once it has considered it in detail, Finance Minister Bill English says.

“International freight issues are vitally important to New Zealand as a nation of exporters, located a long way from major world markets," Mr English says.

“Increasing our export competitiveness is a critical part of achieving better productivity growth and ensuring New Zealanders maintain and increase their standard of living.

Land Information Minister Maurice Williamson and Associate Finance Minister Jonathan Coleman have approved the new recommendation of the Overseas Investment Office (OIO) to grant consent to Milk New Zealand Holding Limited to acquire the 16 Crafar farms.

“New Zealand has a transparent set of laws and regulations around overseas investment,” Mr Williamson says.

The increasing number of Australian companies investing and creating jobs in New Zealand is good for the economy and will help increase incomes, Finance Minister Bill English says.

“For the first time in quite a few years, Australian businesses are seeing competitive opportunities in New Zealand,” he says. “This reflects a number of issues, ranging from the exchange rate, lower business costs, an improving regulatory environment and the positive direction of economic policy.

Labour continues to make expensive spending promises it could not afford without borrowing hundreds of millions of dollars more from overseas lenders, Finance Minister Bill English says.

“In the past week, it has proposed doubling paid parental leave entitlements, which would cost taxpayers another $150 million a year.

The Government has received the Productivity Commission's final report on housing affordability and will provide a thorough response once it has considered it in detail, Finance Minister Bill English says.

"Housing affordability is an important issue for New Zealand families and our economy," Mr English says.

"New Zealand experienced a sharp rise in house prices over the past decade, resulting in declines in housing affordability and home-ownership rates and large increases in household debt.

The sale of AMI Insurance to IAG, completed today, will provide certainty for policyholders, strengthen the Canterbury insurance market and reduce the likely cost to the Crown, Finance Minister Bill English says.

The Reserve Bank today joined the Commerce Commission, Financial Markets Authority and Overseas Investment Office in giving approval to the sale.

As part of the deal, the Crown takes over ownership of AMI Insurance’s Canterbury earthquake related claims, while IAG will own and manage AMI's ongoing insurance business under the AMI brand.

An updated valuation of estimated Canterbury earthquake costs – including $450 million relating to the quake on 23 December 2011 – are reflected in the Government’s accounts for the eight months to 29 February.

Combined with core Crown expenses remaining significantly below forecast, and core Crown tax revenue continuing to track below forecast, the extra earthquake costs left a $5.5 billion operating deficit before gains and losses in the eight months, Finance Minister Bill English says.

Finance Minister Bill English has welcomed the International Monetary Fund’s assessment of the Government’s plan to return to surplus by 2014/15.

In its preliminary concluding statement on New Zealand, published today, the IMF notes the Government’s medium-term deficit reduction plan is aimed at limiting the increase in public debt to guard against future economic risks and contributing to lowering external debt.

The Government has tightened livestock tax rules to prevent farmers who change valuation schemes receiving an unintended tax break, Finance Minister Bill English and Revenue Minister Peter Dunne announced today.

Ministers said the current rules were too loose and allowed some farmers switching between the two main livestock valuation methods to receive an unfair tax advantage over those farmers who applied the rules as they were intended.

The economy grew by less than expected in the December quarter, but annual growth of 1.8 per cent still leaves New Zealand reasonably well placed compared to many other countries, Finance Minister Bill English says.

“The economy has now grown in 10 of the past 11 quarters, since emerging from the recession which started in New Zealand in early 2008,” Mr English says.

The 10 results set by the Prime Minister for the public sector over the next three to five years focus on some of the biggest challenges facing New Zealand, Finance Minister Bill English and State Services Minister Jonathan Coleman say.

The results will cover five themes:

The Government will focus on six key areas over the next three years to help companies grow and to build a more productive and competitive economy, Finance Minister Bill English and Economic Development Minister Steven Joyce say.

Building a more competitive economy is one of four main priorities the Prime Minister has outlined for the Government in this term.

The Government has appointed board members to two new Crown companies - Southern Response Earthquake Services Ltd and Crown Asset Management Ltd – and reappointed Reserve Bank chairman, Arthur Grimes.

Southern Response Earthquake Services Ltd is the renamed residual parts of AMI Insurance that will remain in Government ownership once the sale of AMI Insurance’s non-Christchurch earthquake related business is finalised.

A new public-private partnership (PPP) prison at Wiri, South Auckland, will provide improved facilities, better services and a tighter focus on results, Finance Minister Bill English and Corrections Minister Anne Tolley say.

The Government has chosen a consortium of companies, SecureFuture, to design, finance, build, operate and maintain the new 960-bed facility, which is needed to meet growing demand for prisoner accommodation in Auckland.

A report benchmarking the administrative and support functions of state sector agencies shows they are starting to control their back office costs, but there is room for improvement, Finance Minister Bill English says.

Delivering better public services to New Zealanders is one of the Government's main priorities over the next three years.