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Budget 2009 at a glance – the road to recovery

Budget 2009 – the road to recovery
Keeps the economy going amid global turmoil
• Budget 2009 takes steps to ensure New Zealanders are cushioned from the sharpest edges of the worst global recession since the 1930s.
• New core Crown spending of $2.9 billion in Budget 2009 - combined with recent tax cuts - will support the economy.
• Budget 2009 directly supports jobs through a $323.3 million home insulation and clean heating campaign, $50 million for a national cycleway network and a multi-billion dollar infrastructure boost.

Safeguards entitlements
• Budget 2009 locks in National Superannuation at 66 per cent of the average wage.
• Benefits, student support and Working for Families are maintained at current levels.

Improves public services
• A $3 billion boost for health over four years, focused on frontline services.
• $1.68 billion on education to raise student achievement.
• 600 more police and 246 more probation workers to improve public safety.

Builds more productive infrastructure
• $290 million for the first tranche of the Government’s broadband plan.
• $523 million to build new schools and upgrade existing ones.
• An extra $1 billion over three years for the state highway network

Controls government debt
• The Government is ensuring debt does not skyrocket out of control. We have taken considered choices now to avoid harsher ones later. They include deferring planned tax cuts, suspending automatic contributions to the New Zealand Super Fund and slowing the pace of new government spending.

Strengthens the economy for the future
• Removes unnecessary regulation so businesses can thrive.
• Invests more to lift the literacy and numeracy of young people.
• Creates a more productive public sector.
Budget initiatives at a glance
(All figures four years to 2012/13, unless stated otherwise)
Home Insulation Programme
• Campaign to fit homes built before 2000 with insulation and clean heating devices such as heat pumps and approved wood burners. About 180,000 households eligible for grants of up to $1,800 regardless of income. Community Service Card holders will be eligible for grants of up to $3,000. Starts on July 1 this year - $323.3 million.
Budget 2009 includes an additional $3 billion investment in health services – including $750 million in 2009/10.
• Improve District Health Boards’ services and meet population pressures - $2.1 billion.

• 800 more health professionals to increase elective surgery capacity - $70 million.

• Improving maternity services and meeting increased need - $103.5 million.

• Upgrading health sector infrastructure including a start to the construction of 20 new dedicated elective surgery theatres - $245 million.

$1.68 billion over the years 2008/09 to 2012/13 to improve facilities and lift educational achievement. Of this, $1 billion is new spending.
• Build new schools and modernising existing ones - $523 million.
• Helping students meet national standards in literacy and numeracy - $36 million.
• Expand 20 Hours Early Childhood Education scheme from 1 July 2010 to five year olds, playcentres and kōhanga reo - $69.7 million.

$900 million for justice initiatives aimed at improving public safety.
• 600 more police on the streets by 2011 - $182.5 million.
• 246 more probation officers, 29 frontline managers and 26 psychologists to improve the quality of parole and home detention management - $255.9 million.
• 1,000 extra prison beds though increased double bunking at 5 prisons, plus planning for additional capacity - $385.4 million.
• Kick starting the Government’s $1.5 billion plan for ultra-fast broadband to the home - $290 million.

• Increased investment from the Land Transport Fund in the state highway network of about $1 billion over the next three years, lifting the total amount spent on state highways to about $1 billion a year.

Treaty of Waitangi
• Accelerating Treaty settlements by boosting the Office of Treaty Settlement’s ability to conduct more negotiations faster - $22.4 million.

Social Development
• Locking National Superannuation payments in at 66 per cent of the average wage to be paid at age 65 - $18.6 million.

• FreshStart initiatives for young offenders - $81.6 million.

Other key initiatives

• Boosting affordable housing initiatives - $40 million.

• Creating a series of regional cycle tracks with the long-term aim of creating a national network - $50 million.

• A new Primary Growth Partnership to boost primary sector growth and innovation - $190 million

Budget figures at a glance
• Over the next three years the economy will lose around $50 billion of output, compared with what was forecast in Budget 2008.

• An operating deficit before gains and losses of $7.7 billion is forecast in 2009/10 and $9.3 billion in 2010/11.

• Government gross debt is expected to peak at 43 per cent of GDP in 2016/17 before falling to 37 per cent in 2022/23, against forecasts of 70 per cent, and climbing, in 2022/23 without policy changes.

• An operating allowance of $1.45 billion per annum from 2009/10 to 2012/13, or $5.8 billion across the four-year Budget forecast period.

• Core Crown expenses increase by $2.9 billion in 2009/10 once a rise in benefit numbers and other forecast changes are taken into account.

• An additional $1.45 billion in capital spending across the forecast period. This amount will be repeated in future budgets, rising to $1.65 billion in 2013/14.

• Unemployment is now forecast to peak at 8.0 per cent in the September quarter of 2010.


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