May 19 Budget to focus on savings and investment

Wednesday 9th February 2011 4 Comments

Finance Minister Bill English has confirmed Budget 2011 will be delivered on Thursday, May 19, and will focus on measures to build New Zealand's national savings and reducing vulnerability to foreign debt.

"The theme of Budget 2011 will be about savings and investment, because as a country we need to save more, spend a bit less and reduce our heavy reliance on foreign debt," English said.

"In our first Budget, the National-led Government steered the economy out of recession and the global financial crisis, and mapped a credible path back to budget surplus."

"In our second Budget last year, we made good progress in our six-point plan for faster economic growth - including the biggest tax reforms on 25 years."

English said the Budget this year will reduce new operating spending to around $800 million to $900 million a year, from the current $1.1 billion.

He also said spending on health and education would be prioritised as well as plans to move into a surplus.

"We're also looking at options to better manage Government assets on behalf of taxpayers, so we can free up capital for substantial extra investment in assets like schools, faster broadband and better transport infrastructure – without having to borrow so heavily," he said.

"These options include the possibility of introducing the mixed-ownership model for four energy SOEs, where the Government retains a majority shareholding on behalf of taxpayers and offers a minority stake to Kiwi investors."

"We are seeking Treasury advice on this and will make our position clear to New Zealanders well before the election in November."

Comments from our readers

On 9 February 2011 at 7:34 pm arty said:

Here’s the thing, I already save. In fact my business is reliant on my savings at present due to very tough times and changes in rules from Government. I am in the auto business. Saving does not pay though, it costs to save whereas borrowers receive tax breaks, and if buying property inflation proof the cash. No chance of Government addressing that, so what will change?

On 10 February 2011 at 8:36 am arty said:

How about applying loan equity ratios? That would encourage private saving short to medium term, re adjust the cause of the problem - real estate values and things might get back to normal. The banks are subject to these controls now, why not the country as a whole?

On 10 February 2011 at 8:55 am Anne said:

This is the government that took over an economy in excellent health, which enabled NZ to survive the financial crisis. In their first budget they cut the Kiwi Saver incentives ... they haven't got a clue.

On 10 February 2011 at 9:40 am LB said:

The economy was not in excellent health ... it was Labours big election bribe in 2005 that set us on this path - yes buying 400,000 students with interest free loans made the difference in that election, and the global financial crisis hit BEFORE the last election, and some big decisions had to be made. The Govt matching KiwiSaver contributions was unfortunately scrapped.