Budget 2003 builds capacity for growth

Budget 2003 demonstrates the government's commitment to managing the country's finances responsibly and lifting New Zealand's economic performance, says Prime Minister Helen Clark. It has a coherent and highly credible programme for 2003/04, strongly supports economic growth through innovation, and funds good public services and infrastructure. Helen Clark says the budget also provides confidence that New Zealand is well placed to deal with the challenges of a turbulent international environment.

Some Budget 2003 detail

Finance Minister Michael Cullen's fourth budget includes a projected surplus of $3.8 billion in 2003-04. Gross debt at lowest recorded levels and forecast to continue to decline steadily as a proportion of GDP ? from 27.3 per cent this year to 23 per cent in 2006-07. The budget brings ahead by one year the full contribution rate to the New Zealand Superannuation Fund with a $1.879 billion payment for 2003-04. The rate of economic growth is expected to halve over the next 12 months to 2.2 per cent before rebounding to 3.2 per cent in 2004-05.

New Zealand well placed to weather economic headwinds Michael Cullen says influences including weak world demand, SARS, drought, possible electricity disruptions and a stronger dollar are already weighing on business confidence and activity. But New Zealand is better placed to weather these headwinds than many other economies. Michael Cullen says there is likely to be scope in next year's budget for substantial new initiatives, particularly to assist low and middle-income families and to smooth the transition from welfare to work. Before significant new spending, the government must be satisfied this is sustainable, says Michael Cullen.

Some Budget 2003 highlights

Total education spending increases by $393m to $8.2 billion in 2003-04 including an increase of 8 per cent for early childhood education, $167m over four years to provide an extra 774 teachers, $422m over four years for tertiary students, $85m to raise to 150,000 the number of people in industry training during 2005. Total health spending rises $711m next year to $9.6 billion. There's an additional $140m over four years, plus $12m capital, for research, science and technology, $110m over four years to respond to the sector taskforces on Biotechnology, Design, Screen Production and ICT. Another 318 new state houses will be built above the nearly 3000 already planned, plus a large modernisation programme for existing stock. There's a $256m package over the next four years to fight crime and the impacts of crime and $73m over four years to promote overseas trade.

Youth training package

A comprehensive budget package of youth training initiatives was announced by Prime Minister Helen Clark. The $56.6m package will make the Gateway programme ? senior school students in work-based training - available to all 1-5-decile schools by 2007. There's funding for 2,500 additional Modern Apprenticeships annually. Helen Clark says the government is committed to having all young people in education, training, or a job by 2007.

New Cabinet responsibilities

Prime Minister Helen Clark has announced new portfolio allocations following the resignation from the Cabinet of Mark Gosche for family reasons and his replacement by Rick Barker. Steve Maharey becomes Minister of Housing, Phil Goff becomes Minister of Pacific Island Affairs, Margaret Wilson relinquishes the Courts portfolio but retains an associate role, Paul Swain becomes Minister of Corrections, Ruth Dyson takes responsibility for the Children, Young Persons and their Families Service, John Tamihere becomes Minister for Small Business, Rick Barker retains the Customs portfolio and his associate portfolios, and takes on Courts, Damien O'Connor becomes Minister of Racing. New ministers outside the Cabinet are Taito Phillip Field as Associate Minister of Pacific Island Affairs, Justice and Social Development and David Cunliffe, who becomes Associate Minister of Finance, Revenue, Communications and Information Technology. Winnie Laban becomes Parliamentary Private Secretary to Marian Hobbs, Minister for the Environment and Associate Minister of Foreign Affairs and Trade and to Jim Sutton in his trade-related responsibilities.

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