NZ’s consistent economic growth continues

19 March 2015 0 Comments

New Zealand’s economy continues to perform consistently well with another quarter of solid growth reported today, Finance Minister Bill English says.

Statistics New Zealand today released gross domestic product figures for the December quarter showing growth of 0.8 per cent. This took annual growth – from the December quarter 2013 to the December quarter 2014 – to 3.5 per cent, the highest annual rate since Sept 2007. Average annual growth to December 2014 was 3.3 per cent.

Growth was across the board, with retail trade and accommodation, manufacturing, and rental, hiring and real estate services all contributing strongly in the quarter.

“The good news about New Zealand’s economic growth is that it has proved to be consistent and sustainable, which is contributing to confidence about hiring and investment,” Mr English says.

“Where this growth really makes a difference to New Zealanders and their families is in their household budgets. They are earning more, saving more and borrowing less.

“In 2014 we saw 80,000 new jobs created, a record high participation rate in the labour force of 69.7 per cent, and average weekly wages growing at 2.5 per cent compared with inflation of 0.8 per cent.

“This is helping New Zealand families, particularly those with mortgages who are experiencing a long period of stable low interest rates, to get ahead. The Government’s leadership and direction are helping the economy to grow, and that growth is helping New Zealanders.

“However, there are many risks around and no-one should take this consistent growth for granted. The effects of drought and lower dairy prices are likely to have an impact this year, and international risks - including declining growth prospects for some of our main trading partners - are ever-present.

New Zealand continues to be one of the higher-performing countries in the OECD.  New Zealand’s 3.5 per cent economic growth in 2014 compares with  growth of 2.7 per cent in the UK,  2.5 per cent in Australia, 2.4 per cent in the United States, 0.9 per cent in the Euro area and  -0.7 per cent in Japan over the same period.

Flag Referendums Bill passes first reading

12 March 2015 0 Comments

A bill that sets out how the two postal referendums on the New Zealand Flag will be conducted passed its first reading in Parliament today, Deputy Prime Minister Bill English says.

The New Zealand Flag Referendums Bill was referred to the Justice and Electoral Select Committee after a 76 to 43 vote on the first reading.

“New Zealanders will decide whether the flag changes or not,” Mr English says.

“The bill simply puts in place the structures and processes needed to ensure that the consideration process is carried out formally, carefully and fairly. The proposed legislation contains no bias in favour of change.”

The bill sets out the rules and requirements for the conduct of the referendums, as well as rules for participation by voters and advertisers.

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Books show surplus for seven months to January

11 March 2015 0 Comments

The operating balance before gains and losses (OBEGAL) for the seven months to January was a surplus of $77 million, driven by higher than expected tax revenue and lower than expected operating expenses, Finance Minister Bill English says.

“This is the first time the Government’s books have shown a part-year surplus since 2009. Although it is too early to say whether we will have a surplus for the full 2014/15 year, this result demonstrates the strides we have made in improving the Government’s finances,” Mr English says.

The OBEGAL outturn was $712 million better than the $635 million deficit forecast by the Treasury in the Half-Year Update (HYEFU) in December, but was still $120 million below Treasury’s Budget 2014 forecast, undertaken at the start of the fiscal year.

Corporate tax was $158 million, or 3.2 per cent above the HYEFU forecast and source deductions were $146 million, or 1.0 per cent above forecast.

“Although corporate tax and source deductions were both ahead of forecast for the seven months to January, these latest figures underscore the difficulty in forecasting the difference between two large numbers,” Mr English says.

“We won’t know until the final accounts are published in October whether we will achieve a surplus for the whole year. The variance of both tax and expenditure from forecasts reinforces that message.”

Core Crown expenses for the first half of the financial year were $249 million lower than forecast at HYEFU.

“The Government is continuing to responsibly manage its finances. Core Crown expenditure for 2014/15 is forecast to be $4.1 billion lower than forecasts made when we first set the surplus target back in 2011,” Mr English says.

Moody’s reaffirms NZ’s top Aaa credit rating

06 March 2015 0 Comments

Leading credit rating agency Moody’s Investors Service has reaffirmed New Zealand’s Aaa sovereign credit rating with a stable outlook, noting the strength of the economy and improving government finances.

“This is a further endorsement of the Government’s responsible economic and fiscal programme,” Finance Minister Bill English says.

“Moody’s notes that New Zealand’s economy is growing relatively strongly, despite a steep fall in dairy prices during 2014. Compared to similarly rated countries, it says that New Zealand has a track record of faster and more stable growth in recent years.

“In addition, Moody’s has assessed New Zealand’s fiscal strength as very high. This reflects a debt burden that is lower than the median for Aaa-rated countries, along with the prospect of a return to budget surplus.”

Mr English says the Government’s spending restraint and falling debt as a proportion of gross domestic product have again been recognised by Moody’s.

It notes that the National-led Government is committed to not raising taxes and that its strategy for returning to surplus is based on expenditure restraint. This will allow spending to fall to below 30 per cent of GDP during the coming four years – down from a peak of 34.6 per cent in 2010/11.

“As Moody’s notes, New Zealand’s main vulnerability is its external debt and structural current account deficits,” Mr English says. “Both of these indicators have improved somewhat in recent years and the Government is focused on further improvement through its economic programme.”

New Zealand is one of only 14 countries with the top Aaa rating and a stable outlook with Moody’s.

Moody’s credit analysis of New Zealand is available at: https://www.moodys.com/research/Moodys-New-Zealands-economic-growth-supports-Aaa-rating--PR_319984

Govt backs data forum’s recommendations

27 February 2015 0 Comments

The Government is backing the recommendations of the NZ Data Futures Forum to make better use of public data and uphold privacy standards, Finance Minister Bill English and Statistics Minister Craig Foss say.

The NZ Data Futures Forum — an independent expert advisory group from the public and private sectors — was established by the Government last year to help drive further use of open data.

Recommendations in the forum’s final report included:

  • Exploring the potential value of an independent data council which could lead, support and advocate for data use
  • Reviewing the policy and legislative environment to ensure it supports better use of data
  • Launching catalyst projects supporting collaboration between public and private sectors
  • Encouraging Government agencies to continue to open up data to the public.

The Government has directed officials to report back in March on progressing data catalyst projects and the Government’s Open Data initiative.

“Delivering better public services for New Zealanders means making better use of the information we have and lifting accountability to the public through transparency,” Mr English says.

These initiatives sit alongside a range of measures the Government is taking to improve data use, including Statistics New Zealand’s Integrated Data Infrastructure, the Ministry of Social Development’s investment view, and a pilot project between Land Information New Zealand and Wiki NZ.

The Government has also established the Social Sector Board to accelerate integration of social sector data, including setting common standards.

“More data use highlights the need for that data to be used responsibly,” Mr Foss says.

“The Government has signed-up to the Forum’s four recommended data use principles of value, inclusion, trust and control.

“Giving individuals greater control over the use of their data, and building confidence in our institutions to protect sensitive information is an essential part of making better-use of information.”

New Zealand was recently ranked fourth-equal in open data by Open Data Barometer Global Report.

The recommendations of the New Zealand Data Futures Forum can be found at: https://www.nzdatafutures.org.nz

The Government’s response can be found at: http://www.stats.govt.nz/about_us/what-we-do/our-publications/cabinet-papers.aspx

Speech to the Auckland Chamber of Commerce and Massey University

26 February 2015 0 Comments

Good afternoon.

Thank you Michael and the Auckland Chamber of Commerce, and Steve and Massey University, for inviting me back to this annual event.

It’s a pleasure to be with you again today. I make this the sixth time I’ve spoken at this forum since becoming Minister of Finance.

With the National-led Government now into its third term, I’d like to update you on our priorities for the next three years.

We have three busy years ahead of us. And there is much to do.

There is broad agreement among commentators that New Zealand is doing well compared to other developed economies.

Our economy is growing. Employment is increasing. And wages are rising.

Households and businesses are benefitting from low inflation and a long period of stable, low interest rates.

We’re making good progress in improving public services in areas like welfare, health, education and law and order.

We’re now drilling down to the people who really need our help the most. Their lives are often complex and their problems are longstanding.

We’re prepared to invest in them now because we can make a difference to their lives and that will have a financial payoff for taxpayers down the track.

The Government is working towards surplus and repaying debt.

We’re pressing on with wide-ranging economic reforms under the Business Growth Agenda spanning capital markets, innovation, skills, natural resources, infrastructure and export markets.

The Government’s seventh Budget on 21 May will set out the next steps in our economic programme.

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Thousands of new houses for Auckland’s Tamaki

26 February 2015 0 Comments

Around 7,500 new houses are expected to be built in the Auckland suburb of Tamaki over the next decade as part of the Government’s programme of increasing and speeding up new housing developments, Finance Minister Bill English says.

That will represent a net increase of about 5,000 houses after accounting for removals and demolition of older properties, he said in his annual speech to the Auckland Chamber of Commerce and Massey University in Auckland today.

“This important aspect of our Social Housing Reform Programme – to increase the supply of affordable houses – has not had much attention.

“Housing New Zealand is the largest residential landowner in the country and much of its land is used inefficiently by the standards of modern urban planning.

“We want Housing New Zealand to free up more land for housing development and to do this more quickly.”

There are opportunities to redevelop and revitalise smaller blocks of land, but also whole social housing suburbs.

Some of these larger developments are happening already and the Tamaki Redevelopment Company – a partnership between the Government and Auckland Council – is a good example of that, Mr English said.

“It’s delivering new social housing alongside affordable housing and other homes as part of a major urban renewal project.

“We want to accelerate this activity, so small and large redevelopments of Housing New Zealand land and properties are completed with more urgency.”

The Cabinet will soon make further decisions about Tamaki and the Government will confirm details in the next few weeks. It will involve redeveloping some of Housing New Zealand’s 2,800 houses in the suburb – many of which are over 50 years old and sitting on large sections.

“Over the next decade or so, the company and its partners expect to build around 7,500 affordable and social homes, along with other community facilities. That’s a net increase of around 5,000 houses after accounting for removals or demolitions of older properties.”

Mr English says work is already underway.

Tamaki’s first neighbourhood regeneration project, called Fenchurch, began over a year ago. The development, which is being led by Housing New Zealand, is in the middle of Glen Innes and will deliver 32 quality homes on what were empty sections.

The Ministry of Education and the Tamaki Redevelopment Company are also building a new early childhood education centre for up to 60 children.

And the Tamaki Redevelopment Company has partnered with the Department of Conservation to renovate an old building and convert it into a community hub that will be managed by residents.

“So the Tamaki regeneration has a social as well as a development focus,” Mr English says. “This is just the start of what will be a transformation in Tamaki.”

Mr English says this is part of the Government’s wider focus of getting on top of housing affordability issues and building a lot more affordable houses – particularly in Auckland.

“Affordable houses have gone from being 30 per cent of new builds to just 5 per cent in just 25 years. More expensive houses have to be built to recover land, infrastructure and building costs.

“The Government’s approach is having an impact, but we need to press on.”

Flag Consideration Panel members announced

26 February 2015 0 Comments

The Government has appointed 12 New Zealanders as members of the Flag Consideration Panel which will engage with the public about a possible new New Zealand flag, Deputy Prime Minister Bill English says.

The panel will be chaired by former deputy vice-chancellor of the University of Canterbury Emeritus Professor John Burrows, ONZM, QC of Christchurch who was co-chair of the Constitutional Advisory Panel. Writer and reviewer Kate de Goldi of Wellington will be the deputy chair of the Flag Consideration Panel.

The other 10 members are:

Nicky Bell – CEO of Saatchi & Saatchi New Zealand and board director, Auckland

Peter Chin, CNZM – Former Mayor of Dunedin, director and trustee, Dunedin

Julie Christie,  ONZM – Director of Julie Christie Inc. and board member, Auckland

Rod Drury – CEO of Xero and technology entrepreneur, Havelock North

Beatrice Faumuina, ONZM – Olympian, Commonwealth gold medallist, ASB Head of Talent & People Strategy, board member and trustee, Waitakere

Lt Gen (Rtd) Rhys Jones, CNZM – Former Chief of NZ Defence Force, Wellington

Stephen Jones – Invercargill Youth Councillor, Invercargill 

Sir Brian Lochore, ONZ, KNZM, OBE – Former All Blacks captain, coach and administrator, Masterton

Malcolm Mulholland – Academic and flag historian, Palmerston North

Hana O’Regan – Academic, Maori Flag Consideration Panel members announcedstudies and te reo Maori, Christchurch

“Many New Zealanders were considered for the panel following nominations by a cross-party group of MPs,” Mr English said.

“I am pleased with the panel’s independence, calibre and experience and each member has committed to undertake the flag consideration process carefully, respectfully and with no presumption in favour of change.”

The panel will hold its first meeting in early March. It will:

  • Consider and oversee a public engagement process to begin in May.
  • Invite New Zealanders to send in designs or ideas regarding a possible alternative flag.
  • Shortlist designs for the first postal referendum, which will be held this year using a preferential voting system, inviting voters to rank the designs in order of preference.

The winning design will run off against the current New Zealand flag in a second, binding referendum to be held next year using the First Past the Post voting system. A New Zealand Flags Referendums Bill containing these measures will be introduced to Parliament shortly.

“This process will give New Zealanders the rare privilege of having a say on one of the most important symbols of our nation,” Mr English says. 

“I hope New Zealanders will take the opportunity to listen and talk to each other and consider the design suggestions that come forward before making their minds up and taking part in the referendums.”

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December deficit $381m better than forecast

20 February 2015 0 Comments

Higher than expected tax revenue and lower than expected operating expenses contributed to an operating balance before gains and losses (OBEGAL) deficit of $990 million for the six months to December, Finance Minister Bill English says.

The OBEGAL deficit was $381 million better than the $1.37 billion deficit forecast by the Treasury in the Half-Year Update in December, driven primarily by core Crown tax revenue being $323 million above forecast.

GST was $132 million (1.7 per cent) above the HYEFU forecast and corporate tax was $124 million (3.1 per cent) above forecast. In addition, customs and excise duties were $46 million (1.8 per cent) above forecast.

“Although GST and corporate tax were both ahead of forecast for the six months to December, these latest figures underscore the difficulty in forecasting the difference between two large numbers. It remains to be seen whether the higher-than-expected growth in revenue continues through the rest of the financial year,” Mr English says.

“The Government still considers that the strong economy and responsible fiscal management can deliver a surplus when the final accounts are published in October. The smaller than expected OBEGAL deficit reinforces that message.”

Core Crown expenses for the first half of the financial year were $90 million lower than forecast at HYEFU – with the variance being spread over a number of departments.

“The Government is continuing to responsibly manage its finances. Crown expenditure for 2014/15 is forecast to be $4.1 billion lower than forecasts made when we first set the surplus target back in 2011. The challenge is coming from revenue, which the Government has much less control over,” Mr English says.

Ministers set new targets to reduce dependence

19 February 2015 0 Comments

The Government has set itself ambitious new targets including 75,000 fewer New Zealanders being on benefits by June 2018 as part of its Better Public Services drive, Finance Minister Bill English and State Services Minister Paula Bennett say.

The ministers today released the latest results from the Better Public Services programme showing almost 5000 people (-6.6 per cent) came off long-term Jobseeker Support benefit in 2014, the number of children who experienced substantiated physical abuse decreased by almost 200 (-5.6 per cent) over the 12 months to September 2014, infant immunisations are at an all-time high and crime numbers continue to fall. 

“The latest results show that the programme, which measures progress in 10 areas chosen in 2012 to focus on improving the lives of people who most need the Government’s help, is working,” Mr English says.

“All the areas are making progress including improvements in the immunisation rate, a reduction in the incidence of rheumatic fever and we expect that results for NCEA Level 2 will show progress towards the 85 per cent achievement target.

“However, in some of our target areas it is not yet clear whether the positive trends are sustainable.  The challenge now is to find ways to influence those who are harder to reach and who may be in circumstances that make it more difficult for them to respond. This will require a broad search both inside and outside the public service for better solutions, more innovative ideas and   intensification of activity to keep making progress. We will track results and spend our social investment funds where they make the most difference.”

Mrs Bennett said ministers were today announcing they were extending the Better Public Services  welfare targets and, as signalled earlier,  also challenging themselves and the public service to do even better at reducing crime, and improving the workforce skills of young adults.

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