Hon Bill English
Minister of Finance

9 February 2011
Media Statement

Budget on 19 May, savings and investment focus

Finance Minister Bill English today confirmed Budget 2011 will be delivered on Thursday, 19 May - focusing squarely on taking further measures to build New Zealand’s national savings and reducing vulnerability to foreign debt

“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,” Mr English says.

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

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

“The Government has already indicated that it intends to borrow less in future than is currently forecast and get back to budget surplus sooner.

“Therefore, the Budget this year will reduce new operating spending to around $800 million to $900 million a year, from the current allowance of $1.1 billion. We will prioritise new spending on health and education and set a path to meaningful surplus in 2014/15 – a year earlier than forecast.

“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.

“Those 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.”

ENDS

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