20 May 2010
Budget 2010: Building the Recovery
In this issue I talk about our changes to New Zealand's tax structure and what we hope to achieve with tax cuts and other initiatives.
BUDGET 2010: BUILDING THE RECOVERY
This afternoon Bill English delivered our second Budget. It will build the recovery of our economy, help Kiwi families get ahead, and deliver the brighter future National campaigned on in 2008.
It's great that we've come out of the recession in stronger shape than many countries. Our economy is expected to grow by 3.2 per cent in the coming year.
But we're not out of the woods yet, so this is a sensible Budget that keeps a tight rein on government spending, and returns our books to surplus by 2016.
We're taking a lot of positive steps. By focusing on faster and more sustainable economic growth, the Budget will help create jobs, boost incomes, raise living standards, and provide world-class public services for you and your family.
REFORMING THE TAX SYSTEM
Our tax package is the largest reform of the tax system in nearly 25 years. It helps families get ahead, encourages savings and productive investment, creates a fairer tax system, and keeps skilled Kiwis in New Zealand.
This includes across-the-board tax cuts and a rise in GST to 15 per cent. We're increasing Superannuation, Working For Families, and benefit payments, to compensate for the one-off change to GST. We're also changing the rules for investment property owners.
BETTER HEALTHCARE, SOONER
We're boosting spending on health by $2.1 billion over four years. This includes providing District Health Boards with more money to improve frontline services for patients. We're also investing more in disability support services and elective surgery - necessary operations such as joint replacements, cataract removal, and ear, nose, and throat surgery. Last year we delivered an extra 12,000 elective operations, which is the largest ever annual increase. Our focus on elective surgery will continue.
LIFTING EDUCATION STANDARDS
We're boosting spending on education by $1.4 billion over four years. This includes more support for schools, and more money for early childhood education so we can target families in need. We're also investing in vital broadband tools for schools.
UNCLOGGING THE GROWTH ARTERIES
We're investing $1.45 billion in infrastructure such as broadband, rail, schools and prisons this year. We're tackling bottlenecks in our roading, electricity, and telecommunications networks. And we're providing high-quality and cost-effective infrastructure such as schools and prisons.
Budget 2010 helps make sure that families in need get better frontline services and support. This includes expanding the Job Ops programme for 16-24 year olds, investing in services for teen parents, and more money for non-governmental organisations to deliver high-quality services. We're also extending our Housing Innovation Fund for another year, and launching a financial assistance package to help homeowners get their leaky homes fixed.
INVESTING IN OUR FUTURE
We're investing in New Zealand's future by putting $321 million into new science, research and technology initiatives over four years. Science will help lift the long-term performance of the New Zealand economy.
Last week I announced an extra $30 million for tourism this year. Tourism will play an important role in helping us get the economy growing faster. Most of the new money will be used to market New Zealand as a tourist destination internationally.
FROM MY DIARY
Tomorrow I'm speaking at a post-Budget business lunch in Auckland and opening Albany Senior High School's new buildings. On Saturday I'm off to Oamaru for the Mainland National Party Conference.