English to visit Australia this week

13 April 2015 0 Comments

Finance Minister Bill English will visit Australia this week, where he will take the opportunity to hear first-hand from business and industry leaders their thoughts about the relative strengths and weaknesses of the Australian economy.

“Australia is one of our major international partners and traditionally, we do well when they do well. So while the proximity of exchange rate parity is an indicator of strength in the New Zealand economy, it also reflects some uncertainty about  Australia which could impact on us. Almost 20 per cent  of New Zealand exports are to Australia, and over 50 per cent of our Overseas Direct Investment goes across the Tasman.

“It will be useful for me to talk to companies who are big investors and employers in Australia. The trip  also provides a chance to strengthen  our  links with the Australian business and investment community. We have many common challenges and opportunities and it’s good to know what each other is thinking,” Mr English says.

Visiting Perth tomorrow, Mr English will speak with mining sector leaders and Government representatives. He  will then spend a day each in  Brisbane and Sydney  meeting with business and infrastructure sector leaders, including the Trans-Tasman Business Council before returning on Friday.

Mr English will return briefly to Sydney on 20 April to speak at the Business Council of Australia Annual Forum.

Crown accounts turn back to deficit in February

10 April 2015 0 Comments

The Crown accounts have slipped back to a deficit of $269 million in the eight months to February, making the previous month’s flirtation with surplus short-lived but nevertheless encouraging, Finance Minister Bill English says.

The operating balance before gains and losses (OBEGAL) for the seven months to January showed a surplus of $77 million - the first time since 2009 that the Government’s books had shown a part-year surplus.

Revenue from some tax sources have remained higher than forecast in February, but not as far ahead as they were in January. “Other individuals” tax is $217 million ahead of forecast, and corporate tax $91 million higher, indicating a pleasing lift in profitability for some businesses. However, the February accounts show GST being $261 million lower than forecast. About  $150 million of that is attributed to earthquake-related refunds to insurers. The rest of the GST shortfall is related to very low inflation leading to lower-than-expected spending on consumption.

The Government continues to do a good job of controlling its own expenditure with core Crown expenses in the latest eight-month period  $312 million lower than forecast, though some of that relates to the timing of Treaty settlements so will reverse out in time. Taken over the year, core Crown expenditure for 2014/15 is forecast to be $4.1 billion lower than forecast in Budget 2011  when the Government  first set the target of returning to surplus in 2014/15.

“We’re continuing to manage the books carefully but lower inflation, while good for consumers, is making it less likely that the final accounts in October will show a surplus for the whole year,” Mr English says.

“Nevertheless, the fact that we’re a bit over one month, and a bit under the next, shows just how far we have come since 2010/11 when we had an $18.4 billion deficit. Next month’s Budget will produce new forecasts that I expect will take in to account further reductions in the inflation outlook.”

Social housing comments unfounded

08 April 2015 0 Comments

Comments from the State Housing Action Network that the Government is abdicating its responsibility to social housing tenants are completely incorrect, Finance Minister Bill English says.

“Our social housing reforms will provide more social housing for New Zealanders in need, and we will grow the community housing sector while maintaining Housing New Zealand as by far the largest provider of social housing,” Mr English says.

Community housing providers already own or manage around 5,000 properties around New Zealand, and have a proven track record of delivering services for their tenants. Their core business is providing safe, affordable social housing for New Zealanders in need, which is why we want to work with them to provide more quality social housing.

“Resolving some of New Zealand’s longstanding social challenges requires the Government to be open to working with community groups, non-government agencies and the private sector,” Mr English says. “We don’t have a monopoly on good ideas.”

“The Government has set bottom-line commitments about the social housing changes which will help ensure there is greater support for tenants, including:

  • Housing New Zealand and community housing providers will collectively provide more social housing places than there are now.
  • Properties will be sold only if this results in better services for tenants and fair and reasonable value for taxpayers.
  • Tenants in properties that are sold will continue to be housed for the duration of their need.
  • The Government will spend more on income-related rent subsidies and ensure that Housing New Zealand has enough capital to build new social housing and to develop its existing properties.”

Background material:

Further detail on the specific objectives of the social housing reform programme, and the full set of bottom-line commitments are available at http://www.beehive.govt.nz/sites/all/files/Qs_and_As_0.pdf

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.”