New Zealanders have shown strong support for National’s balanced decisions and responsible economic management in Budget 2011.
The Budget sets out the next steps in National’s plan to build faster growth, increase national savings, and create jobs. At the same time, it protects vulnerable families, boosts frontline health and education services and helps fund the rebuild of Canterbury.
We have proposed a few changes to KiwiSaver, Working for Families and Student loans. We are also proposing to extend the mixed ownership model to a small group of companies. These changes are about encouraging individual and national savings, and building a stronger economy.
None of the changes will take effect before the election – so we are giving voters all the information they need to make a choice on November 26, 2011.
Mixed Ownership
National wants to extend the mixed ownership model to four state-owned energy companies and reduce its shareholding in Air New Zealand, while retaining majority control. Extending the mixed-ownership model to these companies will help reduce government debt, increase investment opportunities for Kiwi mum and dad investors and improve the financial performance of the companies.
Our Working for Families, changes mean some families higher up the scale will receive slightly less or will no longer qualify. But about 280,000 families earning below $70,000 a year will be better off.
It is about targeting those families who are most in need.
KiwiSaver costs the government $1.2 billion a year and at present we have to borrow that money from overseas.
That is why we are proposing to increase employee and employer contributions and reduce government contributions. This means less borrowing and more real savings, which will help build a stronger economy.
Our interest-free student loan scheme is one of the most generous in the world and we want to ensure it remains sustainable. We are therefore proposing a few changes aimed at encouraging borrowers to repay their debt and tightening eligibility criteria, while keeping the scheme interest free. It is about encouraging personal responsibility and getting better value for taxpayers.
Budget 2011 frees up $5.2 billion over four years for vital public services and paying off debt, by cutting administration and other back office costs.
Sustained growth
At the same time, we are spending more on health and education than ever before.
Health and Education get respectively an extra $2.2 billion and $1.4 billion over the next four years.
To help build a safer New Zealand, we have boosted law and order funding by $157 million over two years. And to unclog the growth arteries in our economy, we are spending $1.6 billion on infrastructure such as broadband, schools, and KiwiRail.
We are investing $55.2 million to support 13,000 young people into jobs over four years. Budget 2011 also helps rebuild Canterbury by establishing a $5.5 billion Canterbury Earthquake Recovery Fund.
This Budget contains both spending and saving initiatives and builds a platform for jobs and growth into the future.
As the economy gathers steam again, we now have the chance to build a solid platform for future growth. If we get this right, the opportunities would be endless.
John Key is Prime Minister of New Zealand. The above article is exclusive to Indian Newslink ©
