Budget frees another $1.8b for priority spending

The Budget next month will redirect another $1.8 billion of lower quality government spending between now and 2014 into high priority areas, Finance Minister Bill English said today

This follows Budget 2009 redirecting $2 billion of lower quality spending to higher priority initiatives, he said in a speech to the Wellington Regional Chamber of Commerce.

“That’s a significant sum of money we’re making available for priority areas such as better healthcare services, better education and keeping New Zealanders safe.

“The Government will continue to weed out low quality spending. We will live within the $1.1 billion annual operating allowance for new spending we have set ourselves, and restrict annual increases in this figure to 2 per cent from 2011/12.”

Mr English repeated that most Government agencies would receive no budget increases over the next three or four years, as the Government moved to get back to Budget surplus as soon as possible.

“It’s clear from the work we’ve done so far that there is considerable scope to provide better public services by improving processes, removing duplication and reallocating resources from low quality spending to improve frontline public services.

“It’s about doing things better and smarter, after a decade where new funding flowed freely and constraint wasn’t required.”

“Public service chief executives are coming to terms with this reality. The Government has given them time to prepare their agencies to provide better public services with little or no new money over the next three or four years.

“I want to get the Government back into budget surplus as quickly as possible, because surpluses give us choices.

“For example, surpluses give us choices to invest more in public services; to pay down public debt; to resume contributions to the New Zealand Super Fund – or to do any number of other things.

“As long as we run deficits, we don’t have those choices,” Mr English said.

ENDS

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