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Budget 2013 has freed up a further $1.5 billion by redirecting spending to where it delivers the best results, Finance Minister Bill English says.

This takes the total amount of reprioritised government spending since Budget 2009 to $14.9 billion.

“At a time when the Government’s finances are constrained, reprioritising spending allows significant additional funding for new or proven initiatives that get better results for New Zealanders,” Mr English says.

“It’s about spending well, not spending up.”

Choosing sound fiscal and economic policies, and being disciplined in adhering to them, means the Government’s books are in good shape as it presents its fifth Budget, Finance Minister Bill English says.

Budget 2013 forecasts an operating surplus before gains and losses of $75 million in 2014/15 – a sharp improvement from a deficit of $18.4 billion in 2010/11.

Progress in the Government’s programme while on track to surplus

Budget 2013 confirms New Zealand is on the right track, with forecasts of economic growth, more jobs, rising wages, and a return to surplus by 2014/15, Finance Minister Bill English says.

The International Monetary Fund has confirmed that the Government’s economic plan strikes the right balance between supporting growth and limiting public debt, Finance Minister Bill English says.

In its final staff report issued this morning, the IMF endorses New Zealand’s balanced and pragmatic economic management.

“Coming out the day before the Budget, this is a strong vote of confidence in the Government’s programme over the past four years,” Mr English says.

The Government will launch an update of its Budget app for smartphones and tablets on Thursday with interactive features that allow users to see how much tax they pay and how their tax dollars are spent, Finance Minister Bill English says.

“This is a refresh of the Budget app which was successfully launched last year and is part of the Government’s continuing focus on delivering innovative and better-value public services,” he says.

“The Budget can reach more people when it is digital and accessible.”

113,000 New Zealanders will become shareholders in Mighty River Power following a successful share offer, Finance Minister Bill English and State Owned Enterprises Minister Tony Ryall say.

The final price will be $2.50 per share.

Of the shares issued, 86.5 per cent will be New Zealand owned: 26.9 per cent by New Zealand retail investors, 8.6 per cent by New Zealand institutions and with the Crown retaining a majority 51 per cent shareholding. That leaves 13.5 per cent for overseas institutions.

The Government’s finances continue to improve with higher than forecast tax revenue contributing to the operating deficit now being lower than forecast in the Half-Year Update in December, Finance Minister Bill English says.

The operating deficit before gains and losses for the nine months to 31 March was $5 billion, or $273 million smaller than the $5.2 billion deficit forecast in December.

The Government and Mighty River Power are filing a supplementary disclosure to the Mighty River Power offer document, say Finance Minister Bill English and State Owned Enterprises Minister Tony Ryall.

The document is being lodged with the Registrar of Financial Service Providers this afternoon.

"The existing MRP offer document already outlined the principal risks associated with an investment in MRP shares," Mr English says.

The Mighty River Power share offer opens for business tomorrow with New Zealanders having three weeks to apply to buy shares.

Finance Minister Bill English and State Owned Enterprises Minister Tony Ryall today confirmed that the share offer will proceed, with Mighty River Power expected to be listed on the stock exchange for the first time on May 10.

The Budget on 16 May will confirm the Government remains on track to surplus in 2014/15, Finance Minister Bill English said today.

It will also confirm the need for responsible fiscal and economic management beyond then so the Government can start repaying debt and investing more in priority public services.

New Zealand retail investors in the Mighty River Power share offer will receive one loyalty bonus share for every 25 shares they hold for two years from the offer, up to a maximum of 200 bonus shares, Finance Minister Bill English says.

"The loyalty bonus scheme that I am announcing today is another way to encourage widespread and substantial New Zealand ownership of shares in MRP," Mr English says.

"It also recognises the loyalty of those New Zealanders who retain their shares and contribute towards the country's savings culture."

Higher than forecast tax revenue continues to underpin an improvement in the Government’s finances, compared to the Half-Year Update in December, Finance Minister Bill English says.

The operating deficit before gains and losses for the eight months to 28 February was $3 billion, or $556 million smaller than the $3.6 billion deficit forecast in December.

Two important changes to increase KiwiSaver contributions take effect from 1 April, which will help to encourage a higher level of private savings among New Zealanders, Finance Minister Bill English and Revenue Minister Peter Dunne say.

From next Monday, the minimum employee contribution rate will rise from 2 per cent to 3 per cent. At the same time, compulsory employer contributions will also rise from 2 per cent to 3 per cent.

The economy recorded a lift in growth in the December quarter, consistent with a broad improvement in activity and confidence, Finance Minister Bill English says.

Gross domestic product grew 1.5 per cent in the three months to 31 December, 2012. This took annual growth – from the December quarter 2011 to the December quarter 2012 - to 3 per cent.

“We had had a slightly softer September quarter so it is pleasing to see that growth picked up again in the final quarter of 2012,” Mr English says.

Finance Minister Bill English has welcomed the International Monetary Fund’s conclusion that the Government’s deficit reduction programme strikes the right balance between supporting growth and limiting public debt.

In its Preliminary Concluding Statement (embargoed until midnight tonight NZ time), the IMF says New Zealand’s macro-economic policy stance is appropriate and that the monetary policy should continue to be the first line of defence against adverse shocks.

The Government will not continue with a proposal which would have changed the way some employer-paid carparks in central Auckland and Wellington are treated for tax purposes, Finance Minister Bill English and Revenue Minister Peter Dunne say.

“The proposal was made as a matter of fairness, because in general we consider that cash and non-cash benefits should be taxed the same way,” Mr English says.

Finance Minister Bill English will visit Hong Kong for two days next week, where he will deliver a keynote speech to the annual Asia Investment Conference and meet a number of business and political leaders.

Mr English will be in Hong Kong on 19 and 20 of March, returning to New Zealand on 21 March.

“Asia is an important and growing export and investment partner for New Zealand and I’m keen to keep building on our relationships in the region,” he says.

The Government’s financial position continues to track slightly better than forecast in the Crown’s financial statements for the seven months to 31 January issued today, Finance Minister Bill English says.

The operating deficit before gains and losses for the seven months was $2.5 billion, or $571 million smaller than the $3.1 billion deficit forecast in the Half-Year Update in December.

Finance Minister Bill English is visiting Australia today and tomorrow, where he will speak to high-level business audiences in Melbourne and Sydney, as part of his regular programme of trans-Tasman engagement.

He will also meet a number of Australian chief executives and senior business figures.

“As our largest trading partner, taking nearly a quarter of our total exports, the Australian economy is vitally important to New Zealand,” Mr English says.

New Zealanders are being given an incentive to pre-register their interest in the Mighty River Power share offering, Finance Minister Bill English and State Owned Enterprises Minister Tony Ryall say.

Those who pre-register may be allocated up to 25 per cent more shares than people who do not pre-register, if demand exceeds shares available.

Mr English and Mr Ryall announced the incentive at the launch of the official three week pre-registration period for the Mighty River Power share offer in Auckland today.

Finance Minister Bill English and Minister for State Owned Enterprises Tony Ryall will tomorrow officially launch the pre-registration period for New Zealanders who are interested in finding out more about the Mighty River Power share offer.

“National campaigned on this policy at the election in 2011 and it has been extensively discussed before and since then,” Mr English says.

“It has been through the High Court and the Supreme Court where the Government has won both cases and now, at last, it’s time to get on with it.”

The sixth Business Growth Agenda progress report, Building Capital Markets, which is being released today, outlines 50 initiatives to strengthen New Zealand’s capital markets, so they can support businesses to grow and create jobs, Finance Minister Bill English and Economic Development Minister Steven Joyce say.

The report also sets a goal of reducing the real interest rate premium on New Zealand debt, compared with the United States and Australia.

A marginal improvement in the operating deficit before gains and losses in the six months to Dec 31 reflects the Government’s continuing careful stewardship of its finances, Finance Minister Bill English says.

The Government’s financial statements for the six months ended December 31 were published today showing that both Core Crown tax revenue and Core Crown revenue were slightly lower (0.1%) than forecast, but Core Crown expenses came in $273 million lower (0.8%) than expected, helping reduce the OBEGAL deficit by $158 million to $3.2 billion.