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Beehive Bulletin - Budget 2006 Special

Beehive Bulletin - Budget 2006 Special

Budget overview

Finance Minister Michael Cullen described his seventh Budget as one that delivered on Labour's election promises and guarantees solutions to key regional transport issues. The budget allocates new operating spending of $9.6 billion and capital of $2.7 billion over the next four years. Debt is moving towards prudent levels and the government is shifting its focus to ensure it stays at these levels over the long term.

The government's positive net financial asset position means New Zealand is well placed to weather an expected slowing in economic activity and to meet the expected challenges of an aging population. Most forecasters are expecting a soft landing this year with the economy picking up again in 2007. Real GDP growth is estimated to have eased to 2.1 per cent in the year to March 2006 and is forecast to bottom out at 1.0 per cent in the March 2007 year. However, the economy is expected to expand strongly again in the following years to around 3 per cent in the March 2008 year.

Fast-track roading

A massive $1.3 billion Budget boost to guarantee New Zealand's largest ever land transport programme formed the centrepiece of Budget 2006. Transport Minister Annette King said the new money would mean an unprecedented $13.4 billion being spent over the next five years to guarantee the state highway programme and to speed up work to ease traffic congestion in Auckland, Wellington, and Christchurch. It also continues the momentum of much-needed improvements around New Zealand.

In addition to the $1.3 billion, an additional $215 million (over ten years) goes towards meeting the Waikato region's transport needs. Annette King said in total, the government will spend $300 million more over the next five years on land transport than it takes in petrol duties, road user charges, and motor vehicle registration fees. It also eliminates the projected $862 million shortfall in funding over the next five years, while funding an extra $425 million to accelerate major projects, including: Warkworth Improvements, the

Healthier New Zealanders

A total $750 million in additional health funding represents a major investment in New Zealand families, Health Minister Peter Hodgson said yesterday. The $3 billion increase to health over four years funds major new investments in the aged-care sector and historic initiatives in child health and obesity prevention. Over seven budgets, the government has invested heavily in health and undertaken the largest public hospital building programme in New Zealand's history and lowered the cost of doctor's visits.

The government is spending $10.6 billion in the health sector over the coming financial year, $4.2 billion more than in 2000/01. The budget delivers a four-year boost of $126 million to the aged care sector, $80.4 million over four years to improve the health of young New Zealanders and a $76.6 million four-year investment in New Zealand's largest campaign to fight obesity.

More for schools

Teacher numbers are boosted and more resources put into schools thanks to a $361 million four-year investment, plus $20 million in the current financial year, Education Minister Steve Maharey said. Total funding for New Zealand schools is now more than $4 billion a year, up from less than $3 billion in 1998/99.

The funding provides for more teachers, new classrooms and buildings, and an overall boost to operational funding. Putting 455 extra teachers into primary and special schools is a priority and schools' operational funding will increase by $95.6 million over four years to ensure it stays ahead of inflation. Capital funding for school property improvements will increase by $148.9 million, taking it to $527.8 million in 2006/07.

Job training

Tertiary Education Minister Michael Cullen announced an extra $58 million to boost New Zealanders' access to job training programmes. The extra funding builds on the success of the Industry Training, Modern Apprentices and school-based Gateway programmes.

Another $34.4 million over four years is allocated to expand Modern Apprentices to 14,000 by December 2008; $15.6 million more over four years to increase people participating in Industry Training and; $8.1 million over the next four years to expand the successful pathway programme Gateway, to include all state and integrated secondary schools. Gateway was previously only available to Decile 1-6 schools. Dr Cullen also announced another $33.5 million over the next four years towards improving the literacy, numeracy and language skills of the workforce.

ENDS

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