Out and About

We are now well into 2010 and the past two months have been busy and interesting. There has been the ongoing preparation for the 20 May Budget, the three-week opening sitting of Parliament, and a number of events in the Clutha-Southland electorate.

 

It was a pleasure to have Prime Minister John Key in the electorate over two days recently.

 

Along with Invercargill MP Eric Roy, we attended a "Dinner with the Prime Minister" at the Invercargill Workingmen's Club. The following morning we headed out to the Croydon Aviation Heritage Trust's breakfast function at The Moth. The Trust is based at Mandeville.

From there it was off to the Waimumu Field Days where we were joined by Agriculture Minister David Carter and Eric Roy. The field days were highly successful and a great opportunity to catch up with "the locals" as well as businesses and franchises from around the country. The Prime Minister spoke to an assembled crowd in CRT's Village.

I attended the Tuatapere and Districts Schools 100th Jubilee Celebrations and also visited the Winton A & P Show. After so much gloomy weather early in the year, the sun shone for these events and it was a great opportunity to catch up with many people.

I also attended meetings in Lawrence, Balclutha, Owaka, Winton, Gore, and Queenstown. Question time at these meetings is a good opportunity to hear what is on people's minds, and various questions arose, including: a floating exchange rate, tax incentives, Emissions Trading Scheme and GST.

School board elections

Schools are busy planning for their local school board elections in May elections. Schools have to call for nominations by 15 March with nominations closing at noon on 23 April. Election day is 7 May with boards talking office on 14 May.

 

This is a very important election for our schools. Strong leaders make strong schools. Schools need people with a balance of skills and experiences to put their names forward. Anyone from the community, including parents, can be nominated.

Boards of Trustees do a great job at managing our schools and I urge you to consider whether you can put your name forward as a candidate. The NZ School Trustees website www.nzsta.org.nz will give you more information about the role of a trustee or contact one of my offices.

Cycle Trail Winners

It was great news that two proposed cycle trails in Clutha-Southland have been given the green light for feasibility studies as part of the $50 million New Zealand Cycle Trail.

 

The Wakatipu Trail and the Clutha Gold Trail were among 13 winners from a pool of 54 applicants nationally.

The projects will now undergo feasibility studies to ensure they are properly priced, can be built, and will deliver what they promise. If the feasibility studies are positive construction could start by the end of the year.

The selection of these trails, which showcase the best of what New Zealand has to offer, is great news for the region. They will also support regional economic development and employment. That means jobs for locals during the construction phase and more importantly longer-term jobs providing accommodation and other services to cycle tourists.

I'd like to congratulate the organisers of these projects and all of those people in the community who put time and effort into the proposals. Their hard work has been recognised.

I am, however, disappointed another proposal - the Manapouri Cycleway - has missed out, but overall the region has done well.

Once you count the Around the Mountain trail which was selected last year as one of seven Quick Start projects, Clutha-Southland has three of the 20 projects currently being appraised.

http://www.tourism.govt.nz/Our-Work/New-Zealand-Cycle-Trail-Project/

In Wellington

Budget tax package

Over the past 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.

http://www.beehive.govt.nz/speech/lifting+our+economic+game

 

 

Prince in town

I had the pleasure of attending the opening of the Supreme Court of New Zealand by Prince William. It was an honour to meet the Prince who was performing his first official duty for the Queen.

 

Click here for photos from the Prince's visit.

 

Voluntary Bonding Scheme for Veterinarians

 

I was really pleased that Agriculture Minister David Carter announced that the voluntary bonding scheme for veterinarians has been expanded and Clutha vets will now be able to receive the benefits of this scheme.

 

The scheme, launched last year, encourages new graduates to stay in an eligible practice by providing a taxable payment of $11,000 for every year, up to five years, that they are working in the practice.

The scheme was originally aimed at specific rural areas. Twenty vets have been accepted into the scheme, but unfortunately South Otago was not included.

However, from this year, all practices that deal with production animals like dairy and beef cattle, sheep, pigs, and poultry will be eligible, providing the vets receiving the funding spend most of their time working with these animals.

Over the past year both I and Minister Carter had had talks with Clutha vets about the scheme. The changes are the result of feedback from vets and the New Zealand Veterinary Association.

When the scheme was launched, the Agriculture Ministry acknowledged that good data on vet shortages was scarce, so a transition year was agreed while vets and their association, as well as Massey University and the Vet Council, could be consulted on the final design of the scheme.

Its main limitation appeared to be the targeting of specific regions. Many practices reported they faced similar shortages and recruitment difficulties as those in the eligible areas, but were not able to use the voluntary bonding incentives to recruit and retain staff.

http://www.beehive.govt.nz/release/government+expands+vet+incentive+scheme

Youth Parliament 2010

Young people who have a passion for the future of New Zealand and are willing to stand up and have their voice heard are encouraged to apply to attend Youth Parliament 2010.

 

The Youth Parliament is an opportunity for young New Zealanders to learn about New Zealand's democracy and influence public decision-making.

It has been held every three years since 1994. The next Youth Parliament is this July. Daniel Louni from Gore was my representative at the previous Youth Parliament.

During Youth Parliament, Youth MPs have the opportunity to debate legislation, sit on select committees and ask parliamentary questions of Cabinet Ministers. At the same time, their Youth Press Gallery colleagues report on their activities and make sure they are held accountable to the public.

If you are aged 16 to 18 and are interested in representing Clutha-Southland at Youth Parliament contact one of my offices for an application pack. The closing date for applications is Wednesday 17 March.

http://www.beehive.govt.nz/release/youth+parliament+selections+begin

Affordable, sustainable, and fair ACC

Legislation passed recently will ensure ACC is affordable, sustainable, and fair for current and future generations.

ACC claim costs have risen 57 per cent in the past four years - five times the rate of inflation - and the unfunded liabilities have grown from $4 billion to $13 billion.

The scale of levy increases required this year without these law changes would be crippling for workers, motorists, and businesses.

 

The law changes enable the levy increase this year for the average worker to be reduced from $550 to $150. The levy increase for motorists is $30 a car, down from $104. And for employers the average levy increase is 12 per cent instead of 44 per cent.

 

These changes are part of the Government's objective to secure the long-term future of ACC as an effective and fair 24/7 no-fault insurance scheme for all New Zealanders.

http://www.beehive.govt.nz/release/affordable+sustainable+and+fair+acc

Regards,

 

Hon Bill English MP

Gore Office

15 Main St.  PO Box 266,  Gore  9740             
Phone +64 3 203 3000          
gore.eo@parliament.govt.nz

Balclutha Office

68 Clyde St. PO Box 2192, Balclutha 9240
Phone +64 3 418 4288
balclutha.eo@parliament.govt.nz

Queenstown Office

1085 Frankton Rd. PO Box 103, Queenstown 9349
Phone +64 3 441 4093
queenstown.eo@parliament.govt.nz

The Government will close New Zealand's wholesale funding guarantee on 30 April 2010, Finance Minister Bill English announced today.

"The wholesale funding facility was set up in November 2008 when the liquidity crisis had hit global markets," he told the New Zealand Australia Investment Forum in Auckland today.

"It helped our banks access funding during that crisis, but international market conditions have improved - and continue to improve in 2010. New Zealand banks are now raising funds without using the guarantee, which was always envisaged as a temporary measure for extraordinary times."

Mr English's announcement follows confirmation last month that the Australian wholesale funding guarantee will end on 31 March. Other countries have also ended their guarantee schemes or are in the process of doing so.

The wholesale guarantee facility is separate from the retail deposit guarantee scheme. No changes are planned for the retail deposit scheme beyond those announced last year, which take effect from 13 October 2010.

Since the wholesale guarantee was set up, 24 guarantee certificates have been issued, covering $10.3 billion of borrowing by banks. The scheme has made no payouts and the Government will receive almost $290 million in fees.

"Banks in New Zealand are now successfully raising funds in the wholesale market without using the wholesale guarantee and we don't expect there will be any further use of the facility between now and the end of April."

The Treasury and Reserve Bank have consulted with the major New Zealand banks - along with some international investment banks - in recent weeks.

"In general, the feedback was that they were all looking to raise non-guaranteed funds and have no plans to further use the New Zealand wholesale guarantee," Mr English said.

NATIONAL INFRASTRUCTURE PLAN

Click to watch this video briefing on YouTube.

This month I released the first National Infrastructure Plan. The plan contains a stocktake of current public and private infrastructure, shows the long list of projects in the pipeline and spells out the Government's priorities.

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

The Budget will continue to focus on managing the Government's finances in a disciplined and responsible way, Finance Minister Bill English says.

"It's essential, as we come out of the recession, that the Government shows leadership in managing its finances and getting back to surplus as soon as possible," he said after the release today of the Crown accounts for the seven months to 31 January.

"Surpluses give us choices. With another six years of forecast Budget deficits and net Crown debt forecast to treble to $65 billion by 2014, we won't have those choices for some time.

"Most government agencies will receive no new money in the Budget on 20 May. So they will need to reprioritise existing spending to ensure they are delivering better services to the public and value for money for taxpayers.

"The Government will operate within the $1.1 billion allowance for new spending it set out in the Budget last year. This is not a one-off exercise - and will need to continue for years to come if we are to get the Government's books back into good shape and bring borrowing under control."

The Crown accounts issued today show core Crown revenue was $102 million higher than forecast at $32.4 billion in the seven months to 31 January, while core Crown expenses were $678 million below forecast at $36.2 billion. Net debt was close to forecast at $22.8 billion.

The operating deficit before gains and losses was $883 million better than forecasts at $3.4 billion. Gains in the Crown's investment portfolios and an actuarial gain on the valuation of the ACC insurance liability left the operating deficit at $630 million - or $1.4 billion better than forecast.

"Some of these gains may well be reversed in coming months. And in the context of the much bigger fiscal challenges we face over the next few years, they are really just incremental improvements," Mr English says.

The National Infrastructure Plan, issued today, shows the large scale of the Government's infrastructure programme and highlights some future issues that may require action, Infrastructure Minister Bill English says.

"This Government has increased investment in critical infrastructure including our roads, national grid and broadband," Mr English says.

"This programme is directly supporting thousands of jobs and contributing to a stronger economy, which over time will mean better wages and higher living standards for New Zealand families."

The first National Infrastructure Plan, put together by Treasury's National Infrastructure Unit, shows the Government is spending over $6 billion a year on physical assets and holds about $110 billion of such assets.

The plan, which has a 20-year horizon, is part of a range of work aimed at improving the Government's planning, decision-making and management of infrastructure in order to maximise economic benefits.

"The first National Infrastructure Plan is an important step towards better infrastructure management. Even a small improvement in this area could reap gains worth billions - making our infrastructure dollars go further and ensuring a better return for taxpayers."

The plan provides a snapshot of public and private infrastructure, planned investment and the Government's priorities.

"It gives infrastructure providers greater certainty about the Government's plans and ensures that planners and stakeholders have a clear sense of what is happening across a range of sectors," Mr English says.

It identifies bottlenecks in the roading and electricity sectors, but finds they are being addressed by increased investment.

It also identifies some future gaps and issues that might require action, including an additional Auckland Harbour crossing, the need for better alignment between central and local government planning and more investment in the most commercially viable parts of the rail network.

"The Government has already started planning work for an additional harbour crossing. We have also begun investing in key parts of the rail network and you can expect further announcements in this area throughout the year.

"The plan also says there are gaps in knowledge about the country's infrastructure needs 10-20 years out. Identifying these gaps will be a major focus of the next National Infrastructure Plan," Mr English says.

The full report is available at: http://www.infrastructure.govt.nz/plan/mar2010

National Infrastructure Plan - key findings

• The plan finds that New Zealand's infrastructure is generally sound.
• It confirms that there are bottlenecks in roading and electricity, but these are being addressed by increased investment and changes to regulation.
• While these bottlenecks exist, there are no obvious looming crises in the near term (five years), but there are some gaps in knowledge about the country's infrastructure needs 10-20 years out.
• Identifying these gaps will be a major focus of the next report.
• It notes the Government holds about $110 billion in physical assets and is spending about $6 billion a year on expansion or maintenance of these assets.
• The plan sets out the Government's five key infrastructure priorities - broadband, electricity transmission, regulatory reform, roads of national significance and Rugby World Cup 2011.
• An additional three emerging priorities are: reviewing the electricity market, agricultural irrigation and getting better procurement and management of the Government's physical assets.
• It finds there is currently a large amount of planning across a range of sectors, but it is variable. Sectors covered include transport, energy, telecommunications, water, education, health and corrections.
• It identifies some long-term issues that may require action, including:
• o An additional Auckland Harbour crossing in the next 10-20 years.
• o Better alignment between central and local government in the future to ensure priorities match up. The report says this is happening in Auckland, but there may need to be greater alignment in other regions.
• o A need to replace some of the rail fleet to boost revenue growth on some routes. There is also likely to be increased demand for further investment in the Auckland and Wellington metro rail systems.

Key investments

• State Highways: $10.7 billion over the next 10 years.
• National grid: $3.3 billion over the next five years.
• Urban broadband: $1.5 billion over the next 10 years.
• New schools and buildings: $2.7 billion allocated over next five years.
• Total Budget capital spending: $7.5 billion over five years.

The Government's finances showed some incremental improvement in the six months to December 31, due to a number of factors - including some one-off gains, Finance Minister Bill English says.

However, the longer-term challenge of getting the Government's books in shape remains as substantial as ever.

"As I've been saying for more than a year now, the combination of responsible fiscal and economic management over the next few years is the only way we can get on top of this challenge.

"We've made it clear that the Budget on May 20 will provide most government agencies with no new money, because we're already borrowing $240 million a week and we simply don't have it available.

"At the same time, we need to increase our economic growth, so families can get ahead. It's simply unacceptable that the economy grew by a meagre 0.9 per cent a year in the three years to 2008, when the rest of the world was virtually booming."

The financial statements issued today show the operating deficit before gains and losses, at $3.7 billion in the six months to December 31, was $800 million better than forecast.

This reflected a combination of slightly higher tax revenue and lower expenses.

The accounts included $300 million in extra revenue from Inland Revenue's settlement with banks late last year over their structured finance transactions. Some $1.4 billion had already been recognised in the accounts, and the extra $300 million reflects the net balance of this settlement.

Labour's legacy of economic mismanagement was even more damaging to New Zealand families than previously reported, after revisions to official statistics issued late last year, Finance Minister Bill English says.

"The revisions show that in the three years to September 2008 spanning Labour's third term - and before the impact of the global financial crisis - the economy actually grew by less than 1 per cent a year.

"This compares to already mediocre 1.5 per cent average annual growth over this period reported before the data revisions by Statistics New Zealand.

"In fact, New Zealand's total economic output is now barely above the level of four years earlier.

"They were the best of times internationally and we should have done much better than sub-1 per cent annual growth. Yet in Labour's last term, our economy grew by less than half the growth rate of the Western world and less than one-third the rate of Australia.

"This was a remarkable under achievement and hurt hard-working Kiwi families looking to get ahead and find higher-paying jobs."

During Labour's tenure, Government spending increased recklessly, interest rates were persistently high, exporters were struggling and the tax system was clearly not working, Mr English said.

"The result was a decline in New Zealand's export industries and a near record balance of payments deficit.

"That's why this Government has laid out a comprehensive plan to lift economic performance by shifting the economy away from borrowing and consumption, towards savings and exports."

Housing Minister Phil Heatley and Finance Minister Bill English have today announced the line-up of the government's seven-member Housing Shareholders' Advisory Group.

Company director and global business consultancy senior partner Alan Jackson will chair the group.

Other members include investment banker Andrew Body, property developer Martin Udale, Salvation Army director Major Campbell Roberts, Auckland City Mission head Diane Robertson, New Zealand Housing Foundation executive director Brian Donnelly and Maori development consultant Paul White.

"A review of this nature is long overdue," Mr English said.

"The government has more than $14 billion invested in social housing; much of it is in a poor state of repair and in the wrong places to meet demand.

"The group will look at how this significant asset can be better utilised."

Mr Heatley noted a huge growth in demand for one and two bedroom houses for older people, and four or more bedroom houses for large families.

"Yet we have relatively few houses to meet that demand - instead we have a surplus of three bedroom houses across the country that suit neither demographic."

Today's announcement comes less than a week after the Salvation Army's annual State of the Nation report highlighted a lack of adequate housing, particularly in Auckland.

"The advisory group will make recommendations on the best and fairest way of providing state housing services to those most in need, in the highest priority areas, for as long as they need it," Mr Heatley said.

"As the Prime Minister said in his Statement to Parliament, we have to do a better job of matching state housing support with those people in the greatest need of assistance."

The group will report on the current and likely future demand for subsidised housing, and make recommendations on the future role of Housing New Zealand Corporation in delivering assistance.

They will start work immediately and report to government by 30 April 2010.  For the group's terms of reference visit: www.dbh.govt.nz/news-terms-of-reference-hsag

Housing Shareholders' Advisory Group biographies

• Alan Jackson (chair) is senior vice president in the Sydney office of the Boston Consulting Group. He is also a director of Fletcher Building and a trustee of The Icehouse business growth centre in Auckland. Mr Jackson will contribute experience in change management with expertise in resources, diversified industrials, building products and construction sectors.

• Major Campbell Roberts is the director of the New Zealand, Fiji and Tonga Territory Social Policy and Parliamentary Unit of the Salvation Army. He is also a trustee of the New Zealand Housing Foundation, a director of the Centre for Housing Research Aotearoa New Zealand and the Auckland Housing Trust. Major Roberts is a media spokesperson, writer and speaker who will contribute on issues of poverty and social housing.

• Andrew Body is a director of Crown Fibre Holdings. He has 19 years experience as an investment banker, focussing on mergers and acquisitions. Mr Body will contribute experience in business and network industries.

• Martin Udale is an independent consultant with more than 30 years experience in the New Zealand, UK and Australian property markets, including developing some of the first office parks in Sydney and Brisbane. He was most recently the chief executive of McConnell Property, and has also been director of corporate advisory with CRI, an Australian property development and services group, specialising in partnering with asset owners to create value from underused assets.

• Diane Robertson is head of the Auckland City Mission and is the first non-clergy female City Missioner. She previously had roles on the Committee for Auckland, the Auckland University Community Advisory Board, Springboard Trust, Robin Hood Foundation, Child Poverty Action Group and the New Zealand Institute. Ms Robertson will contribute experience on social and emergency housing issues.

• Brian Donnelly is executive director of the New Zealand Housing Foundation. He is also a director of the Centre for Housing Research Aotearoa New Zealand (CHRANZ), a trustee of the Queenstown Lakes District Community Housing Trust, a member of the Social Entrepreneur Fellowship and chair of the Wilson Home Trust. He will contribute experience in social housing issues, including operating and managing a social housing organisation.

• Paul White is the Principal of Torea Tai Consultants, specialising in consultancy on Maori development, housing and strategic planning. He is also a Member of the State Housing Appeal Authority, the chair of Te Waka Pupuri Putea (an iwi asset holding company) and a council member of FITEC, the forestry industry training organisation. Mr White has previously been chief executive of Ngai Tahu Development Corporation and a member of the Housing New Zealand Board. He will contribute experience in the operation and management of Housing New Zealand, strategic planning and social housing issues.

Finance Minister Bill English today confirmed Budget 2010 will be delivered on May 20 and will set out important policies to lift economic growth and give hard-working New Zealanders incentives to get ahead.

"The Budget will be about taking action to grow the economy over the next five years and beyond," he said after updating the National caucus on the economy and the Government's priorities for 2010.

"It will build on the Government's substantial economic programme last year and give businesses the confidence to invest and create jobs.

"We've come through the recession in better shape than many commentators had predicted. That gives us an opportunity to differentiate ourselves from other countries in areas like tax reform, productive infrastructure investment and better public services.

"All of this is essential if everyday New Zealanders are to enjoy the incomes and living standards that give them opportunities to get ahead."

As it makes decisions for the Budget, the Government will consider several reviews - including the report last month of the Tax Working Group.

"As the Prime Minister has said, we want to create a tax system that strengthens the economy, rewards effort, reduces tax avoidance and keeps talented New Zealanders at home. We also want to tilt the economy towards exports and investment, and away from consumption and borrowing."

The Budget will be delivered against a backdrop of ongoing restraint, given the Government faces another six years of Budget deficits and net Crown debt will more than treble to a forecast $65 billion by 2014.

"It was entirely appropriate that the Government helped New Zealanders through the recession. Now we need to focus on fixing a damaged economy and restoring the Government's books."

GEARING UP FOR 2010


CLICK HERE TO WATCH MY LATEST VIDEO BRIEFING

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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