In this issue I talk about the government's new infrastructure plan, the tax package that will be at the centre of the 2010 Budget, the latest set of Crown accounts and more. 

NATIONAL INFRASTRUCTURE PLAN

Click to watch this video briefing on YouTube.

Infrastructure is one of our six drivers of economic growth and we have a major programme underway, including increased investment in our roads, national grid and broadband. We campaigned on putting together a National Infrastructure Plan because we wanted to move away from the ad-hoc approach of the last two decades. Instead we want to take a longer-term view that gives the industry certainty and ensures we are addressing future bottlenecks and investment gaps before they emerge.

The plan notes the Government is spending about $6 billion a year on physical assets and holds $110 billion of these assets. Even a small improvement in management and planning could reap gains worth billions of dollars. As the plan evolves it will be a key tool in achieving this. You can read my media statement here.

TAX PACKAGE

Over the last month there has been a lot of talk about the tax package I'll unveil in the Budget. Because there has been so much noise I thought it is worth giving you an update. To recap, we are considering a package of across the board personal tax cuts, changes in the taxation of property investment and a small rise in GST. Any rise in GST would be matched by increases in NZ Superannuation, benefits and Working for Families.

The package is yet to be finalised, but you can catch up on my thinking on alignment of the top personal, trust and company rates in a speech I gave in Auckland last month. I also confirmed the Government will be keeping the current system of imputation credits. You can read my statement here.

Prime Minister John Key outlined our broader thinking on tax in his opening speech to Parliament. In a speech to Grey Power he detailed how we would compensate superannuitants - if we went ahead with a rise in GST.

CROWN ACCOUNTS

The latest set of Crown accounts for the seven months to the end of January shows the deficit tracking slightly better than expected. However serious challenges remain. Some of the gains are expected to reverse out in the coming months and we still face six years of deficits. It is essential as we come out of the recession, that the Government shows leadership in managing its finances and getting back into surplus as soon as possible. The Budget, on May 20, will continue to focus on managing the Government's finances in a disciplined and responsible way. You can read my statement on the Crown accounts here.

GETTING OUT AND ABOUT

Last month I gave the Prime Minister a taste of the South - hosting him for a day in my Clutha-Southland electorate. We visited the Croydon Aviation Heritage Trust, the Waimumu Field Days and the opening of Fonterra's new Edendale extension - the largest milk drying plant in the world.

THINGS TO LOOK OUT FOR

• On Wednesday I will be speaking to the New Zealand Australia Investment Forum in Auckland.
• On Thursday Reserve Bank Governor Alan Bollard will release the bank's latest Monetary Policy Statement along with the latest review of the OCR.
• Later in the month I'll be speaking some more about the Government's National Infrastructure Plan to the Local Government Asset Management and Engineering Directors Forum.

Regards,

Hon Bill English
Minister of Finance
Minister for Infrastructure

Click here to comment on this newsletter