GEARING UP FOR 2010


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I hope you all had a good Christmas break. Summer holidays are a chance to spend time with family and reflect on our busy lives. We also get a chance to think about the year ahead and what we want to achieve. I had a great break down south with my family and looking ahead, I'm excited to be back.

As Prime Minister John Key has said - this is the year the Government will start delivering on the faster growth agenda we want. Last year our focus was on jobs, as we weathered the worst global recession since the 1930s. While unemployment is still expected to rise in the first part of this year, our focus has paid off with the jobless rate tracking well below forecasts.

While we were focused on jobs we also set out a comprehensive programme to lift New Zealanders' living standards in the longer term. We set a variety of taskforces the job of investigating specific policy options. Most of these have now come back with findings and over the coming weeks and months the Government will choose the best and most practical options to lift growth.

Outlining a concrete programme to lift growth is the best way to boost consumer confidence and give businesses the confidence to invest and hire more workers. You can read some more about this in an opinion piece I provided to the New Zealand Herald early this month.

TAX WORKING GROUP

Last week I received the report of the Tax Working Group. The report, which identifies problems with our tax system, has generated a lot of discussion and you can expect that to continue over the coming months as the Government considers which options it adopts in the May Budget.

In summary, the report says our tax system is too heavily weighted towards taxes on wage earners and companies. It says these taxes are the most damaging to growth. On the other hand it says tax on consumption is low by international standards and there is a large gap when it comes to investment property. The report suggests changes to the tax mix to create a better tax system.

The working group has made a strong case for change and suggested some practical options. Our focus as we pick through the report will be on options that will boost economic growth. You can read more about the Government's approach to the report in my press release.

BETTER, SMARTER PUBLIC SERVICES

Last week I took a tour of around some Wellington Work and Income sites with Welfare Minister Paula Bennett. These included a call centre and Community Link centre in Lower Hutt and a service centre in Porirua. Jobs has been a major focus for this Government and it was great to see the improvements Work and Income has been making to their frontline services so they can better match up job seekers with jobs.

These include:

• Better use of technology in their call centres so they can handle the far higher volume of job seekers in the last year.
• Bringing together the various government and non-government agencies in a community under one roof in the case of Community Link.
• General process improvements that have cut waiting times for job seekers and meant a high proportion of job seekers are going straight into new jobs within weeks of losing their old one.

It was heartening to see this kind of innovation and improved efficiency getting good results for both taxpayers and job seekers.

THINGS TO LOOK OUT FOR

• On February 4 Statistics NZ will release the Household Labour Force Survey for the December quarter. This is expected to show a rise in the unemployment rate from the current 6.5 percent.
• On February 9 Prime Minister John Key will outline the Government's programme for 2010 in his speech to the opening of Parliament.
• Later in the month I'll also deliver a speech focusing on the economy in 2010.
• Also keep an eye out for the first National Infrastructure Plan, which will be released in coming weeks. You can find out some more about it here.

Regards,

Hon Bill English
Finance Minister

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