Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 


Budget 2012 – Investing In Our Future

24 May 2012

Budget 2012 – Investing In Our Future

Builds a platform for growth, while returning to surplus in 2014/15

• Returns the Budget to surplus in 2014/15, lifting national savings and reducing the need for Government borrowing.
• Forecasts economic growth to average about 3 per cent a year over the next four years, with 154,000 net new jobs being created – adding to the 60,000 net new jobs in the past two years.
• Increases spending on science and innovation to help build a more productive and competitive economy.
• Sets up the Future Investment Fund to spend the proceeds of the Government’s partial share sales on infrastructure, such as modern schools, transport projects, and hospital redevelopments.
• Invests $4.42 billion in new spending initiatives focused on improving frontline public services and getting better results in areas like health, education, law and order, and welfare reform. This spending is paid for by $4.39 billion of savings and new revenue initiatives.
• Continues to invest in the Government’s share of rebuilding Christchurch.

Budget initiatives at a glance
(All figures for four years to 2015/16 unless otherwise stated)

Responsibly managing the Government’s finances

The Budget returns the Government’s books to surplus in 2014/15 despite a $1.2 billion deterioration in the forecasts since the Budget Policy Statement in February. It achieves this by close to zero net new spending.

• Total net new Government spending of just $26.5 million over the next four years, compared with a planned new operating allowance of $800 million a year.
• Spends $4.42 billion on improving frontline services by redirecting savings and new revenue to areas where it gets the best results.
• Finds $3 billion of savings in lower-priority spending and raises almost $1.4 billion in new revenue by increasing tobacco excise tax, greater targeting of tax avoidance, closing tax loopholes, and ending outdated tax credits.
• The forecast OBEGAL deficit falls to $7.9 billion in 2012/13, $2 billion in 2013/14, before a $197 million surplus in 2014/15.
• Reduces the forecast peak in government debt to 28.7 per cent of GDP in 2013/14.
• Confirms new operating spending allowances of $800 million for Budget 2013 and $1.2 billion for Budget 2014.

Building a more competitive economy

Budget 2012 invests heavily in infrastructure, innovation, and skills to help create a more productive and competitive economy that supports more jobs and higher incomes.

• Increases science and innovation funding across government to more than $1.3 billion a year by 2015/16.
• $166 million extra (operating and capital) to develop the new Advanced Technology Institute.
• $60 million extra for National Science Challenges.
• $100 million extra to increase the Performance-Based Research Fund.
• New disclosure rules for KiwiSaver so investors can better compare the performance and fees of KiwiSaver funds.
• A review of KiwiSaver default providers to ensure they are operating in the best interests of investors.

Future Investment Fund

Budget 2012 establishes the Future Investment Fund to invest the $5 billion to $7 billion of proceeds of the Government’s partial share sales of four SOEs and Air New Zealand into modern infrastructure. This includes $558.8 million in Budget 2012.

• $33.8 million to fit out schools for ultra-fast broadband – the first of
$1 billion planned spending on 21st Century Schools.
• $88.1 million for the health sector, most of which will go towards hospital redevelopments.
• $250 million for the third year of KiwiRail’s Turnaround Plan.

Better public services

Budget 2012 focuses spending on areas where it will get better results for New Zealanders. It also sets measurable targets for two more of the 10 areas in which the Government has committed to public targets. The three measurable targets set so far are:

• 85 per cent of 18-year-olds having NCEA Level 2 or equivalent by 2017– up from 68 per cent.
• Reducing prisoner reoffending by 25 per cent by 2017. Reaching this target would mean 18,500 fewer victims of crime every year.
• Increasing the rate of participation in early childhood education to 98 per cent, from 94.7 per cent currently, by 2016.

Health

• Almost $1.5 billion of extra funding for health, pushing total health spending to $14.1 billion in 2012/13.
• $32.4 million for better, faster cancer treatment, including dedicated cancer nurses to support patients through the course of their treatment.
• $16 million to speed up diagnostic tests for patients.
• $48 million for more and faster elective surgery.
• $20.5 million to strengthen maternity services and boost PlunketLine and WellChild services.
• $132.7 million to improve services and access for people with disabilities.
• Increasing tobacco excise tax by 10 per cent a year on 1 January in each of the next four years as part of a wider Government programme to prevent smoking.
• $1.68 million for more public health screening.

Education

• $511.9 million of operating funding for new initiatives in education, pushing total funding for early childhood education and schooling to $9.6 billion in 2012/13.
• $59.8 million to invest in teacher quality to support the professional development of teachers and principals.
• $256.8 million to fund forecast changes in schooling expenditure, which is almost entirely an investment to retain a more skilled and qualified teaching workforce.
• $82.6 million to increase the operations grant, giving schools the flexibility to provide resources based on the needs of their learners.
• $33.8 million capital funding in 2012/13 and $16.8 million operating funding over the next four years for the expansion of the School Network Upgrade Project, to upgrade schools’ internal ICT infrastructure.
• $59.4 million over the next four years, and $391,000 in 2011/12 in operating funding, along with $1.5 million capital funding in 2012/13, for further schooling proposals.
• Targeting cost adjustments for ECE through $47.9 million in new operating funding.
• $19.1 million to improve access to Māori immersion ECE services.
• $33 million in operating funding to accelerate achievement for priority learners.

Tertiary education

• $59 million extra to boost funding for science and engineering tertiary courses.
• $37.7 million more for an additional 3,000 Youth Guarantee places to further improve the transition for young New Zealanders from school into work or training.
• $29.5 million operating spending for Private Training Establishments (PTEs), to create a fairer funding system that rewards competitive innovation across the tertiary sector.

Welfare

• $287.5 million up-front investment in the first phase of the Government’s welfare reforms to support more long-term beneficiaries into work. This includes:
o $80 million for early childhood education childcare and the Guaranteed Childcare Assistance Payment.
o $55.1 million for 155 dedicated Work and Income staff to support job seekers and sole parents into work.
o $1 million for financial assistance to access long-acting reversible contraception.
o $148.8 million for youth services including wrap-around support.

Law and Order

• $65 million in operating spending for new and expanded rehabilitation and reintegration programmes to help meet the Government’s target of reducing reoffending by 25 per cent by 2017.
• A new Justice Sector Fund that will give the justice sector flexibility to invest in areas that deliver better results for New Zealanders. Corrections has reprioritised $87 million towards the Fund.

Housing

• $104 million more for the Social Housing Fund, which supports community housing groups to provide affordable housing where it is most needed.
• $11 million towards insulation for 41,000 more homes as part of the Government’s Warm Up New Zealand: Heat Smart programme. The boost will bring the total homes covered by the scheme to 230,000.

Rebuilding Christchurch

• Of the Government’s $5.5 billion Canterbury Earthquake Recovery Fund (CERF), almost $1.6 billion was spent in 2010/11, and most of the remaining funding is expected to be spent by 2014/15.
• $114.9 million extra funding for the Canterbury Earthquake Recovery Authority (CERA) to oversee the reconstruction of Christchurch.
• $13 million in Social Development funding for NGO-led initiatives to support Cantabrians and assist with the recovery.
• $800,000 for Land Information New Zealand to continue re-surveying the Canterbury region.
• Residential investment is forecast to increase by 29 per cent in the March 2013 year and 41 per cent in the following year.

SUMMARY OF BUDGET ECONOMIC AND FISCAL FORECASTS

June Years201120122013201420152016
ActualForecastForecastForecastForecastForecast
$ billion
Core Crown revenue57.660.064.269.273.677.9
Core Crown expenses70.569.673.772.974.977.3
Total Crown OBEGAL-18.4-8.4-7.9-2.00.22.1
Total Crown OBEGAL excl quake expense-9.3-7.1-5.9-1.70.42.2
Net core Crown debt40.151.961.366.569.870.7
March Years201120122013201420152016
ActualForecastForecastForecastForecastForecast
%
Real production GDP1.21.62.63.43.12.9
Unemployment Rate (March quarter s.a.) 6.66.35.75.25.04.7
Current account balance (% of GDP)-3.6-4.2-4.6

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Election Day: National Win

With all votes counted National and John Key have won a third term and are close to being able to govern alone if they so choose.

Key has indicated he will still reach out to form a Government with ACT, United Future and Maori Party.

National ended the night on 48 percent, Labour 24.6 and the Greens 10. Though special votes might change the margins it is certainly a third term victory for Key defying the political gravity which usually hits parties seeking a third term. Increasing National’s party share is a remarkable political achievement...More>>

Overall Results | Live Results | Predictions |

 


Perfectly-Timed Anniversaries: Suffrage Day Is Last Chance To Enrol

“The last chance to enrol is Friday 19 September. You can’t enrol on election day.” More>>

ALSO:

Gordon Campbell: On First Time Voting (Greens)

For the last two days, I’ve turned my column over to a couple of guest columnists who are first time voters… Today’s guest columnist is Ana Avia-O’Connor, who will be casting her first time vote on Saturday for the Greens. More>>

ALSO:

Meddling: Aussie Liberals Embroiled In Key Campaign

John Key needs to explain why Australia’s Liberal Party is interfering in New Zealand domestic politics and is encouraging Kiwi voters across the ditch to vote for National just days out from the election, Labour’s campaign spokesperson Annette King says. More>>

ALSO:

SURVEILLANCE:

Election Ad Soundtrack: Rapper Eminem Sues National Party Over Copyright Breach

US rapper Eminem is suing the New Zealand National Party for alleged copyright infringement over unauthorised use of the rapper’s ‘Lose Yourself’ song in an election campaign advertisement. More>>

ALSO:

Big March: Call For An End To Domestic Violence

Hundreds of protesters marched down Lambton Quay to Parliament Monday calling for an end to domestic violence. Wearing white facemasks, waving banners and calling for “safety” for the women and children of New Zealand.. More>>

ALSO:

Pre-Election Chartering: Four New Partnership Schools To Open

Education Minister Hekia Parata today announced the Government has signed contracts to open four new Partnership Schools in 2015. More>>

ALSO:

Werewolf 50 Out Now - The Election Issue: Loss Leaders

Gordon Campbell: A third term requires a mature decision, with eyes wide open. It calls for a conscious vote of confidence… Without trying hard here are about 19 reasons, in no particular order, for not ticking ‘party vote’ National. More>>

ALSO:

Not-Especially New Plans: All Prisons To Become Working Prisons Under National

All public prisons in New Zealand will become full working prisons by 2017, and ex-prisoners will receive post-release drug addiction treatment if National is returned to government, says Corrections Spokesperson Anne Tolley. More>>

ALSO:

Māngere: "False Claim Of Matai Title" - Labour

National must explain why its candidate for Māngere Misa Fia Turner appears to be using a Matai title she is not entitled to, Labour’s MP for Māngere and Pacific Islands Affairs spokesperson Su’a William Sio says. A Matai title is a legally-recognised ... More>>

ALSO:

CPAG Report: No New Zealand Child Should Grow Up In Poverty

Child Poverty Action Group's flagship policy publication Our Children, Our Choice: Priorities for Policy calls for cross party political agreement to underpin an action plan to eliminate child poverty in New Zealand. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news