In Focus: 22 May 2015 – Budget special

Yesterday the Minister of Finance, Hon Bill English, delivered his 7th Budget to the Parliament.

This Budget sets out the next steps in our economic programme and demonstrates National’s continuing focus on helping families.

Budget 2015 forecasts a return to surplus next year and increasing surpluses in subsequent years. It includes a $790 million package of measures aimed at reducing hardship among children living in some of New Zealand’s poorest families.

The Budget also confirms New Zealand has a strong, growing economy – we’re on track for average growth of 2.8 per cent a year over the next four years – and provides further evidence the Government’s programme is on the right track.

Our strong economy is forecast to deliver another 150,000 new jobs over the next four years, on top of the 194,000 new jobs created since the start of 2011.

Average wages, which have increased by 15 per cent over the past five years, are also forecast to continue rising faster than inflation. The average wage is expected to rise to $63,000 in the next four years.

Through Budget 2015, National will invest $790 million over the next four years in measures aimed at helping children living in hardship. This package includes greater work obligations for parents on a benefit; more childcare support for low-income families to help parents get into work, education, or training; A $25 weekly increase in benefits for families with children; and an increase in Working for Families payments to low-income families of $12.50 a week in most cases.

We’re supporting health and education with $2.4 billion investment over four years.

We’re making good progress in responsibly managing the Government’s books and are on track to a $176 million surplus next year, which will increase in future years.

Government debt is expected to be less than 20 per cent of GDP by 2020/21 when we can resume contributions to the NZ Super Fund.

The Budget invests more in the drivers of economic development, including a further $360 million to deliver on our commitment to roll-out world-class internet connectivity for New Zealanders, bringing our total investment to $2 billion.

And we’re allowing for significant ACC levy reductions, and strengthening tax rules on property investment.

This is the type of Budget a responsible Government can deliver when it’s following a plan that’s working.

Budget 2015 at a glance

Responsibly managing the Government’s finances:

• A growing economy Average 2.8 per cent growth over the next four years
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• Back to surplus $176 million surplus forecast for next year, growing larger in coming years.
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• $1 billion new spending in Budget 2015 and Budget 2016, rising to $2.5 billion in Budget 2017 to also allow for modest tax cuts.
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• Government debt to fall to 20 per cent of GDP in 2020/21 when we’ll resume contributions to the NZ Superannuation Fund.
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• Average wage expected to rise $7,000 to $63,000 by mid-2019.
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• Another 150,000 new jobs forecast over the next four years – on top of the 194,000 new jobs created since the start of 2011.
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Helping Children living in hardship

We’re investing $790 million over the next four years to help children living in some of New Zealand’s poorest families. For most of these children, the best way out of poverty is for their parents to find sustainable, full-time work.

• Increased work obligations for sole parents on a benefit.
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• More childcare support for low-income families to help parents be in work, education or training.
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• A $25 a week increase in benefit rates for families with children.
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• An increase in Working for Families payments
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• to low-income families of $12.50 a week in most cases.
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This increase will make a difference to around 160,000 of the lowest-income families in New Zealand, and allow parents to better provide for their children.

This is on top of the $500 million families’ package we announced last year, which included free doctors’ visits and prescriptions for children under 13, extended paid parental leave, and increased parental tax credits.

Building a more competitive and productive economy

Research and development - $80 million to support New Zealand businesses investing in research and development, bringing total investment in science to over $1.5 billion in 2015/16.

$25 million to help establish new privately-led regional research institutes in areas outside of Auckland, Wellington and Christchurch.

Investing in tertiary education and skills - $113.3 million to invest in knowledge and skills to grow New Zealand’s economy, including $85.8 million to lift tuition subsidies in science, agriculture, and health science.

Investing in infrastructure and supporting the regions - A further $360 million to deliver on our commitment to roll-out world-class internet connectivity for New Zealanders, bringing our total investment to $2 billion.

An additional $248.9 million for key transport projects, bringing the total spend on transport next year to $4.27 billion. This includes almost $100 million for regional highways, and $40 million for urban cycleways.

ACC levy cuts

Budget 2015 delivers further ACC levy cuts of around $500 million in 2016 and 2017. That’s on top of the $1.5 billion we’ve reduced ACC levies by since 2012.

For example, annual motor vehicle registration fees will drop from an average of $330 to about $120 by 2016.

Investing in Education

High-quality education is vitally important. It provides the opportunity for any child from any background to get ahead and make the most of their lives.

• $243.8 million for new schools and classrooms.
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• $74.9 million for early childhood education to help children get the best start.
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• $62.9 million for special education.
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Better Sooner More Convenient Healthcare

New Zealanders deserve high-quality health services. National is spending more on health than ever before. A further $1.7 billion investment over the next four years takes health spending next year to a record $15.9 billion.

More elective surgery - $98 million to provide more New Zealanders with more elective surgeries, and to improve the prevention and treatment of orthopaedic conditions.

More hospice care - $76.1 million to help hospices expand their palliative care services and support 60 new specialist palliative care nurses.

Extending bowel cancer screening pilot - $12.4 million to extend the bowel cancer screening pilot as we work towards potentially rolling it out nationwide.

Making housing more affordable

National values home ownership. We’re working hard to increase the supply of houses and to make them more affordable, particularly in Auckland.

Budget 2015 provides $52.2 million to facilitate housing development on Crown-owned land in Auckland. It also introduces new measures to tighten tax rules around investment properties to ensure that people are paying their fair share of tax – including overseas buyers.

We’re also helping more young New Zealanders into their first home through our KiwiSaver HomeStart programme, which will benefit 90,000 first-home buyers.

Rebuilding Christchurch

Since the first earthquake in September 2010, National has stood by the people of Canterbury and continues to back the recovery and rebuild.

Budget 2015 provides an additional $107.8 million for the rebuild, bringing the Government’s total contribution to $16.5 billion. It also provides up to $100 million for Lincoln University to rebuild its science facilities.

The recovery is progressing well but there is much more work to do and National is determined to continue to drive the momentum of the rebuild.

More Budget 2015 information can be found at: national.org.nz/budget2015

Upcoming Events

May 25 – Timaru constituency work
May 26 - 28 – Parliament sitting
May 29 – host Seniors’ Forum & attend World Smokefree day event, Ashburton
May 30 – Harness Jewels Racing, Ashburton
June 2 - 4 – Parliament sitting
June 5 – host Seniors’ Forum & constituency work, Timaru

ends

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