Prime Minister’s Statement to ParliamentPrime Minister
The National-led Government’s busy and ambitious policy agenda and legislative programme in 2017 will continue to back New Zealanders to succeed.
This is a Government focused on delivering more opportunities for people to get ahead.
It is a Government that backs New Zealanders who take risks to create new jobs and new businesses.
It backs New Zealanders who work hard so they can raise their families.
And it backs New Zealanders who need the Government’s support to improve their lives.
In 2017, the Government will progress a range of initiatives to achieve these goals.
This year we look forward to continuing strong and effective relationships with our confidence and supply partners – ACT, United Future and the Māori Party.
The agreements we have with these parties, and the goodwill and respect that exists between us, enable the Government to operate in an effective, stable and inclusive manner.
The Government’s programme of responsible economic and fiscal management is delivering benefits for New Zealanders.
Annual economic growth is expected to average around 3 per cent over the next five years, supporting more jobs, reducing unemployment and allowing incomes to rise faster than inflation.
Unemployment is forecast to drop to 4.3 per cent by 2020/21. Over the same period another 140,000 jobs are expected to be created and the average wage is forecast to increase by a further $7,000 to $66,000.
The Government’s overall fiscal strategy remains unchanged – getting on top of spending and paying off debt in the good times so that the Government can support New Zealand communities through future challenges.
The recent Kaikōura earthquake highlights the importance of planning for the future and being in a position to respond to economic shocks and natural disasters.
Budget 2017 will set out the Government’s revenue and spending intentions.
The operating allowance remains at $1.5 billion for each of the next four Budgets.
The capital allowance has been increased to $3 billion in Budget 2017 and to $2 billion in future Budgets to provide for a number of high quality infrastructure and investment projects.
Treasury’s latest forecasts of the operating balance before gains and losses (OBEGAL) is for a $473 million surplus this year, rising to $8.5 billion in 2020/21.
Net debt is expected to fall to 18.8 per cent of GDP by 2020/21, with contributions to the NZ Superannuation Fund forecast to restart the same year.
This year, the Government will progress legislation to strengthen tax rules as part of its work with the OECD to clamp down on base erosion and profit shifting, which can allow multi-nationals to pay little or no tax. The legislation will implement the recommendations from the Shewan Inquiry, and allow further sharing of tax data with foreign authorities.
The Government will continue to support the implementation of Inland Revenue’s long-term Business Transformation programme to modernise and simplify New Zealand’s tax system.
This year annual ACC levies will drop by $126 million, taking the total reductions since 2012 to over $2 billion per year.
From 1 April the average work levy paid by businesses will reduce by 10 per cent from 80 cents to 72 cents per $100 of liable earnings, and from 1 July the average motor vehicle levy will reduce from $130 per vehicle to $114 - a reduction of 12.5 per cent.
On 1 April the minimum wage will increase by 50 cents to $15.75 an hour, benefiting approximately 120,000 workers.
Legislation will be introduced this year to put into effect the Government’s response to the Joint Working Group on Pay Equity Principles.
The Business Growth Agenda (BGA) is the Government’s programme of work to build a more productive and competitive economy that will deliver more jobs, higher incomes and higher living standards for New Zealanders.
The BGA is focussed on the six key inputs for businesses - exports, investment, innovation, skills, natural resources and infrastructure. It also captures three important cross-cutting themes - Māori economic development, sectors and regions, and regulation.
The Government will continue to support, update and implement the BGA this year.
This includes the Regional Growth programme, working with local communities to develop and implement economic growth Action Plans in Northland, Waikato, Bay of Plenty, Hawke’s Bay, Taranaki, Manawatu-Whanganui, Canterbury, Southland, Gisborne and the West Coast.
It also includes implementing the Investment Attraction Strategy to attract more high-quality foreign business investment to New Zealand.
Improvements to the Overseas Investment Office’s processes will continue, reducing the time it takes for applications to be processed while ensuring the rules are vigorously enforced.
The Government will continue to show leadership and make the case for open markets, and closer trade and economic ties. This year, the Government intends progress a range of trade negotiations, including with the European Union, the Gulf States, India and China, and complete the PACER-Plus Agreement.
The Government will work with Trans Pacific Partnership countries to explore options for advancing closer trade ties in the Asia-Pacific, including through the TPP. The Government will continue to look for opportunities to build closer economic ties with the United States, and discussions with the United Kingdom about a post-Brexit trading relationship will also be progressed.
The Government will continue to work with and support the tourism sector – which is now the country’s biggest export earner with visitor arrivals reaching almost 3.5 million last year. This includes both efforts to attract the right mix of visitors throughout the year and providing additional infrastructure in tourism hotspots through the Tourism Growth Partnership.
A particular priority is helping areas affected by the Kaikōura earthquake regain their place as popular visitor destinations.
The Government will work with local government and the private sector to improve access to facilities so more people can enjoy New Zealand’s open spaces and scenery.
Legislation will be progressed to simplify border clearance and make customs and excise requirements clearer. The Government will continue work on options to streamline the collection of duty on low-value physical imports, and will this year implement the trusted traveller programme, making it easier for low risk passengers and goods to go through border clearance.
The Government and primary industry organisations will continue to share resources and work together to manage and respond to biosecurity risks.
This year, the Government will continue work on improving the quality of our rivers and lakes, and progress work on a fair and equitable allocation system for water and discharges.
The Government will also progress the Marine Protected Areas legislation this year, to ensure New Zealand’s vast oceans are sustainably managed and protected to support local communities, the economy and the environment.
The Government will this year continue the Future of Our Fisheries programme which aims to ensure New Zealand has sustainable, shared fisheries by requiring both electronic reporting of commercial fishing activities and monitoring of these activities using on-vessel cameras.
Legislation will be progressed this year to amend the Dairy Industry Restructuring Act to ensure the continued efficiency and contestability of dairy markets in New Zealand, and legislation will come into force that enables wine and spirit makers to register the geographical origins of their products.
The Government will continue to support regional projects to enable aquaculture growth, including progressing the Opotiki offshore farm and harbour feasibility study, and will partner with industry in new innovation programmes through the $720 million Primary Growth Partnership. Work will be progressed to support the development of irrigation and water storage projects.
The Government will encourage petroleum and mineral exploration while adhering to strong environmental and safety provisions. Investment in data acquisition projects such as aeromagnetic surveys will continue, ensuring aeromagnetic data on around 30 per cent of New Zealand’s land surface will be available by mid-2018.
The Government will continue to promote competition in the electricity market to help keep downward pressure on power prices. It will also continue to promote renewable energy, with a target of reaching 90 per cent renewable energy by 2025, up from 81 per cent in 2015. Work will be progressed on setting renewable energy targets beyond electricity.
New Zealand will play its part in the global effort to take action on climate change and transition to a low emissions economy.
The Government will this year progress initiatives to help meet our target of reducing emissions by 30 per cent below 2005 levels by 2030, including a comprehensive review of the Emissions Trading Scheme and legislation to strengthen the role of the Energy Efficiency and Conservation Authority.
The Government will partner with communities and businesses to protect our natural environment and native wildlife, and will this year continue to implement its initiative to make New Zealand predator-free by 2050 by tackling introduced pests which threaten our natural heritage, economy and primary sector.
Investment in modern infrastructure is a priority for the Government. Capital spending over the next five years is forecast to total $32.1 billion, compared to $18.4 billion over the last five years, with major investments in transport, schools, hospitals, defence and housing.
This year the Government will continue construction of the remaining five Roads of National Significance, and accelerate a package of regionally important State Highway projects under the Accelerated Regional Roading Programme.
The Government will also consult on changes to allow for speeds to be increased to 110 km/h on selected highways.
Work will be progressed to increase the uptake of electric vehicles, and the Government will this year implement changes to the regulatory framework for small passenger services such as taxis, ridesharing and carpooling.
The Government will progress the upgrade of infrastructure on the Chatham Islands, including the new wharf at Waitangi.
Ultra-Fast Broadband will be rolled out to new towns and areas this year, and additional rural areas will receive upgraded connectivity under the second phase of the Rural Broadband Initiative.
This year, legislation will be introduced to simplify broadcasting regulatory regimes to make them technology-neutral and more responsive to the fast-changing media markets.
Housing will remain a key focus for the Government this year, and work will continue to increase the supply of land for housing.
Legislation to reform the Resource Management Act will be progressed, to reduce costs and delays for homeowners and businesses, and the Government will also proceed with reform of the Building Act.
This year, the Productivity Commission will deliver its final report on the urban planning system. This will consider options for the long term replacement of planning legislation.
The Government will work with Auckland Council to ensure the successful implementation of the city’s unitary plan. Additional special housing areas will be established, and more underutilised Crown land will be made available to support an increase in residential building.
The Government is reforming the social housing sector to grow supply and get better outcomes for people and families most in need of housing assistance.
The Government will this year build and fund additional social and emergency housing places, having last year provided permanent funding to the emergency housing sector for the first time.
The Social Housing Reform Programme will progress this year, with the transfer of up to 2500 Housing New Zealand properties in Christchurch to Community Housing Providers. The reforms aim to drive more diverse ownership of social housing, engaging providers who can support tenants with additional social services, and redevelop social housing to better match tenants’ needs.
The Government will this year progress the Advanced Survey and Title Services project, which will significantly improve the quality and range of survey and title services provided by Land Information New Zealand.
Legislation to amend the Local Government Act will be progressed this year, allowing local authorities to create more shared services across regions, particularly for core infrastructure such as transport, water and sewerage.
The Government has a strong focus on delivering the skills needed for a growing economy, and will continue work toward our target of 50,000 people training in apprenticeships by 2020.
The Government will this year progress initiatives to boost participation and achievement of Māori and Pasifika in tertiary education, particularly in Science, Technology, Engineering and Maths.
The international education strategy, which supports our fourth-largest export industry, will be refreshed this year, and the first Centre of Asia-Pacific Excellence will be launched to provide more internationally capable graduates for New Zealand Businesses.
The Government will continue to review New Zealand’s immigration settings to ensure they support economic growth and provide employers with access to the international labour market to fill labour needs that cannot be met domestically. A new Global Impact Visa will be piloted to attract up to 400 young technology entrepreneurs.
The Government will this year welcome an additional 250 refugees from Syria, on top of the normal annual intake of 750 refugees.
The Government will this year implement initiatives to contribute to its goal of raising Government investment in research and development to 0.8 per cent of GDP, including the roll out of the $250 million per annum Strategic Science Investment Fund.
Two new Regional Research Institutes will be established in Marlborough and Alexandra, and a second round of Regional Research Institute funding applications will be completed, supporting one to three additional Institutes. Legislation will also be progressed to facilitate growth in the New Zealand space sector.
Further initiatives to reduce workplace death and injury rates will be implemented this year, with a goal of achieving a 25 per cent reduction by 2020.
Regulatory changes will be made to increase transparency around fees in KiwiSaver annual statements, and legislation will also be progressed to strengthen the financial advisors regime.
The Government will continue to support Māori development, with a focus on Whakapapa, Whānau, Whare, Whenua and Whanaketanga. The establishment of Te Mātāwai this year will support the revitalisation of Te Reo Māori.
The Ture Whenua Māori reforms will support land retention and development. Work to improve housing outcomes for Māori will continue through the Māori Housing Network, and He kai kei aku ringa, the Māori economic development framework, will be refreshed.
The Government will continue to resolve historical Treaty of Waitangi claims, and intends for all willing and able iwi to have settled or have an agreement in principle by the end of 2017.
The Government will continue to support Pacific people in New Zealand by promoting education, employment, health and wellbeing outcomes. Over the next two years over 800 young Pasifika not in education, employment or training will be supported through the Government’s Pacific Employment Support Scheme into work and training.
The Government will this year continue to invest in new ways to support more New Zealanders to lead better lives.
The Government’s Social Investment approach, which involves investing money now to improve lives for the better and reduce future costs, will continue to be rolled out to more areas of social services.
After rolling-out this approach in the welfare system, the number of people on a benefit has fallen significantly, and there are more than 50,000 fewer children in benefit dependent households than in 2011.
In 2012, the Government set the public service 10 deliberately challenging targets covering areas such as welfare, education, crime and health. Significant progress has been made in achieving these targets, and further work will continue this year.
The Government is committed to supporting families and children.
On 1 April, the Ministry for Vulnerable Children, Oranga Tamariki will be established, and will be responsible for overseeing the care and protection of New Zealand’s vulnerable children and young people.
The Government will this year extend state care and protection up to the age of 18, and legislation will be progressed to allow young people to remain in state care up to the age of 21, and for the most vulnerable up to the age of 25.
The Government will also establish an independent youth advocacy service this year, introduce National Care Standards to support caregivers and progress legislation to provide legal protection to professionals and agencies when sharing information triggered by concerns over the safety of a child.
The Government will continue to help people move off benefits and into work, and will this year progress initiatives to improve the way it works with higher risk groups such as people with a health condition or disability, young people and Māori.
The Government will this year further improve the way in which data is used to underpin decision making through initiatives like the Integrated Data Infrastructure.
Investment will continue in Whānau Ora, with a focus on supporting whānau to make changes to their own lives and actions and ensuring that the investments deliver the quality and service coverage expected.
The Government will continue to deliver better access to more health services for New Zealanders.
This year the Government will continue to implement the New Zealand Health Strategy which emphasises prevention, early intervention and greater access to integrated services in the community. Implementation of the Childhood Obesity Plan will continue to be a high priority, as will providing faster access to cancer treatment and mental health services.
The Government will continue to lift the number of patients benefiting from elective surgery - which has so far increased by 53,500, up 45 per cent since 2008. Progress will continue on the number of hospital first specialist assessments, which have already increased by 119,000 per year since 2008.
The roll out of the National Bowel Screening programme will continue this year, with the aim of 700,000 60 to 74 year-olds being invited for screening every two years once the programme is fully implemented, detecting 500 to 700 cancers each year.
The Government will continue work to reduce the harm caused by tobacco, and will respond to the public consultation around the appropriate regulatory controls for electronic cigarettes. Standardised packaging with new health warnings will be implemented to discourage smoking.
Initiatives will continue to help disabled people to have more choice and control in their lives, with programmes such as Employability and Disability Confident providing more opportunities to move into work.
The Government will continue to focus on improving student achievement. Legislation will be progressed this year to allow greater flexibility for schools, including allowing them to welcome their new entrants in groups on certain days of the term. Communities of Online Learning will be established this year, and improvements to Learning Support will continue.
The review of education funding systems will be progressed this year, and will consider possible future changes to the funding system for early childhood education and schooling to ensure that funding makes the biggest difference for young people.
Implementation of the Investing in Educational Success initiative will continue. The initiative seeks to raise achievement by improving teaching practice and enabling teachers to better work together.
The Government will continue to build new schools and classrooms for our growing communities. Over the last two Budgets, the Government has provided around $1 billion of new capital for school property, which will deliver 11 new schools and more than 700 new classrooms.
The Government will continue to expand the innovative Partnership Schools | Kura Hourua initiative - providing students and their parents with greater educational choice. Two new secondary schools to be opened in 2017 and additional schools are planned for 2018. A further application round will be held this year for new schools to open in 2019, with schools able to focus on science, technology, engineering and maths, as well as priority learners.
The Government will this year begin rolling out the Safer Communities initiative, which includes funding for over 1100 additional Police staff, including 880 sworn officers. This investment means the police force will increase by 10 per cent by 2021.
Safer Communities targets offenders to ensure they are off the streets by providing additional resources to resolve more crime and target criminal gangs and organised crime. It also addresses the underlying drivers of crime through preventative work and more rehabilitation of prisoners.
To ensure the package delivers real results for New Zealand communities, the additional investment is accompanied by challenging performance targets, including higher attendance at home burglaries, more assets seized from organised crime, fewer deaths from family violence and a reduction in reoffending by Māori.
The package will also ensure the Police are more responsive, with the establishment of a new national 24/7 non-emergency number and increased staffing for up to 20 rural and regional police stations to ensure 95 per cent of New Zealanders are within 25 kilometres of a 24/7 Police presence.
This year, the Government will increase its investment in successful rehabilitation programmes for offenders. Double-bunking at four prisons will deliver 270 additional prison beds by the end of 2017, and development of a new maximum security facility at Auckland Prison will continue.
The Government will continue to implement significant reforms to reduce family violence. This includes getting help to those in need without them having to go to court, ensuring all family violence is clearly identified and risk information is properly shared. The Government will put the safety of victims at the heart of bail decisions, creating three new offences of strangulation, coercion to marry and assault on a family member, and making it easier to apply for Protection Orders.
In December, New Zealand concluded a two-year term on the UN Security Council. The Government will continue to take a principled, pragmatic approach to world affairs – being prepared to speak our minds when it matters. To this end, the Government will establish an Embassy in Bogota this year, and a High Commission in Colombo in the near future.
The Government’s aid and development programme will continue to focus on the Pacific region and in particular helping Pacific nations make the most of their many natural assets.
Although threat levels are low, New Zealand is not immune to terror activity and the threat posed by the Islamic State of Iraq and the Levant. The Government’s response will continue to span humanitarian assistance, diplomatic efforts through the United Nations, working with like-minded countries and through our Defence Force non-combat training mission in Iraq.
The Government is committed to a strong security and intelligence community to protect the safety and security of New Zealanders. This year the Government intends to update the legislative framework and improve the transparency of the intelligence and security agencies in line with the recommendations in the independent review of intelligence and security.
This year will see the next stage of the Government’s planned $20 billion investment in Defence equipment, facilities and capability upgrades, following the adoption of the Defence White Paper last year.
Over the last six years, New Zealand has learned a great deal about how best to respond when disaster strikes.
The Government will do all that is required to support the recovery from the recent Kaikōura earthquake. Work will continue with urgency to reinstate State Highway 1 and repair the rail line north and south of Kaikōura. Financial support for quake-affected businesses will continue, and restoration of the Kaikōura harbour will proceed.
In Christchurch, the Government is committed to the city’s ongoing regeneration. The Canterbury Earthquake Memorial, which features a long marble wall inscribed with the names of the earthquake victims, will be opened this year. The $300 million Justice and Emergency Services Precinct will be fully operational by the middle of the year and the construction of the Metro Sports Facility and Convention Centre Precinct will also begin.
The Government will this year further build Civil Defence capabilities. Work will continue on a nationwide public alerting system that will push out public safety alerts to mobile phones about sudden on-set emergencies, such as tsunami.
Legislation will be progressed this year to bring volunteer, career, urban and rural firefighters together in one, integrated, new national service, with the new Fire and Emergency Service expected to be established on 1 July 2017.
Over the course of this year, other legislation will be put before the House and other policy initiatives will be pursued.
The Government has an ambitious programme that backs New Zealanders to succeed.
It is building the roads, schools and houses needed to support our growing communities.
And it is providing the public services and infrastructure needed by a successful, growing and modern economy.
By building on the progress made in recent years, New Zealanders have the best opportunity in decades to make positive sustainable choices for our country - choices that deliver better incomes for our families, safer communities, and provide better government services for everyone.