POST-BUDGET BREAKFAST

WELLINGTON TOWN HALL

Chairman, Ministers, ladies and gentlemen. Thank you in all the centres around the country for turning out this morning to hear this discussion on the Budget.

You'll be aware of most of the detail and in a few minutes you will hear more from my colleagues, so I just want to share some of the thinking that went into the exercise.

The 1997 Budget is sound evidence that we have made a new form of government work for New Zealand.

As the first Budget prepared by the Coalition Government, it demanded new approaches to the way we go about making decisions.

Unlike the Budgets I've been involved with in the past, this one, of course, had to weave together strands of thinking from across two parties.

And it had to build on the framework of the Coalition Agreement which sets out, fairly precisely, the priorities of Government for the medium term.

Perhaps, given the upheavals of MMP, the most remarkable quality of the 1997 Budget is the sense of continuity it gives to the management of government in our country.

More correctly I would describe it as 'continuity plus' because this Budget maintains direction and adds to it.

There is no going back, rather the Budget is resolutely about going forward.

The direction is clear in our drive towards an open competitive economy.

Next year's tariff review will set a timetable to remove all remaining tariffs well within the APEC 2010 deadline.

The motor vehicle assemblers have asked for an early review of the tariffs in their sector and we will do that by the end of this year.

Outside the State enterprises nominated in the Coalition Agreement we will consider, on a case by case basis, whether to keep them in State ownership or not.

On foreign investment we support the development of the multi-lateral agreement on investment by the OECD.

To improve competition in the generation of electricity we will further reform the State's generating companies.

The Budget sets out a bold economic framework.

It's now up to business to make your decisions on that basis.

On social policy we also set out a clear direction.

It's not just the necessary additional funding set aside for health, education and employment.

It's how that money is spent.

For example, we spell out the need to raise the quality of education, and teacher performance.

To achieve those goals we want to financially reward excellence in the classroom.

Every other profession does so and we want to work with teacher representatives to develop a pay scale that rewards excellence.

People need to feel secure in their communities, so we will employ more police. But that by itself is not enough.

We are determined to ensure safer communities and safer streets across a broad policy front.

Importantly, we want to involve community organisations in this campaign.

We will only achieve safer communities with community support.

This Budget takes an holistic approach to Government responsibilities.

It doesn't argue for simplistic solutions, as some of our critics already have, rather it aims to integrate both economic and social policy in a broad policy thrust.

As I put it, it is 'continuity plus'.

It aims to build up social capital as well as building up economic capital.

During the period of Coalition discussions, and more so as we worked through the Budget round, we found we could find broad agreement on what was necessary to achieve a great future for New Zealand.

We want a low-tax, high-growth, socially equitable country with maximum freedom for individuals, families and commerce.

We want to reduce the size of Government while increasing spending in key social areas, including the resolution of treaty claims, making further tax cuts, running Budget surpluses and repaying debt.

It's a demanding agenda but we are delivering.

This is a Budget that reflects a successful economy.

We are investing further in new schools and classrooms, more resources for teachers and the needs of children with special difficulties.

To that end we have allocated between $150 million and $200 million extra over the next three years to assist students with special needs.

Besides education, the delivery of fair and efficient health services is the biggest challenge facing Governments around the world.

Populations are ageing and costs are increasing as health services struggle to come to financial terms with the opportunities presented by remarkable advances in medical science and technology.

The pressure points in the delivery of good health services are at the two ends of the spectrum - the young and the aged.

For the young, we have delivered on the commitment to secure free doctors visits and prescriptions for children under six.

For the aged, income and asset testing for long stay public hospital care goes, as does asset testing for long stay private hospital care.

That decision takes effect on 1 October 1998.

In tandem with increasing spending we have reaffirmed our commitment to tax reductions.

So next month low and middle income working families will have more money in their pockets thanks to an increase in their family tax credits.

And in July next year we will implement the second phase of our tax reduction programme, effectively reducing the middle income tax rate from 28 cents one year ago to 21 cents by 1 July next year.

This Budget's projections see net Crown debt falling to 20.5 percent of GDP in just three years.

Remember that just a few years ago, in 1992, net Crown debt stood at over 50 percent of GDP.

I conclude by saying to those who claim that New Zealand is treading water - this Budget makes it very clear we are in fact moving ahead on all fronts.

I know that we can meet the tough targets we've set despite the doubts created by the flattening of economic growth in recent months.

It gives me great heart to see how the members of the Coalition Government have addressed the 1997 Budget.

My special thanks goes to the Treasurer and the Minister of Finance for their efforts.

Without their total co-operation this Budget couldn't have been brought together.

In fact across the whole Government there has been a remarkable willingness to confront the issues and apply sound solutions.

Those who expected the Budget to be an exercise in political point-scoring have been proved wrong.

It is a Budget with a clear focus and a set of very specific markers to ensure that our future is better and brighter than our past.

Can I now call on the Treasurer Winston Peters to address you.

Thank you.

Ends