Despite stronger economic growth, government revenue continued to track below forecast in the seven months to 31 January, Finance Minister Bill English says.
“This makes it even more important for the Government to continue carefully managing its spending as we target a return to surplus next year,” he says.
The Government’s financial statements for the seven months show the operating deficit before gains and losses at $1.06 billion, or almost $640 million larger than forecast in the Half-Year Update in December.
This was due mainly to core Crown revenue at $38.3 billion coming in $830 million below forecast. It was offset partly by lower core Crown expenses and higher returns from crown entities.
“While we have spending under control, government revenue can move around and is therefore more difficult to forecast,” Mr English says. “We remain on track to surplus in 2014/15 but, as we’ve said, this is a challenging goal and we need to remain disciplined.
Fletcher Building CEO and managing director Mark Adamson has been appointed New Zealand’s representative on the Australian B20 Leadership Group, Finance Minister Bill English says.
The B20, or Business 20, runs parallel to the influential G20 – the group of 19 nations plus the European Union - which meets regularly to discuss ways to strengthen the global economy and create jobs.
Australia this year holds the G20 presidency and Australian Prime Minister Tony Abbott has invited New Zealand to participate as a guest.
The B20 provides private sector input to G20 discussions and will hold a summit later this year in Sydney. Mr Abbott and Prime Minister John Key have announced an “Australasia Business Week” to showcase the Australasian economy to G20 and B20 delegates visiting Sydney.
“I’m pleased that Mark Adamson has accepted nomination as New Zealand’s representative on the B20,” Mr English says.
“He not only leads New Zealand’s biggest listed company, but he also has extensive international corporate experience that he will bring to the table on behalf of New Zealand’s business community.”
B20 Australia chairman and Wesfarmers managing director Richard Goyder has also welcomed Mr Adamson’s appointment and says Australia’s G20 presidency allows a unique opportunity to showcase Australia and New Zealand to the world as a leading business destination.
“We look forward to the active involvement of New Zealand businesses in the B20 process this year,” Mr Goyder says.Tweet
The Government has today confirmed that the Genesis Energy share offer will proceed next month with a different structure from previous Government share offers.
The Genesis offer is expected to open in the second half of March with the company expected to be listed on the sharemarket around mid-April, subject to market conditions, Finance Minister Bill English says.
“We will set out all the details in the next few weeks. As with the other share offers, New Zealanders will be at the front of the queue for Genesis shares and we remain committed to at least 85 per cent Kiwi ownership.”
Each of the previous share offers was structured to meet the Government’s balanced objectives of achieving good value for taxpayers and providing opportunities for New Zealand investors.
“We’ve so far raised around $4 billion through the share offers, which is being invested in new public assets such as schools, hospitals and ultra-fast broadband,” Mr English says. “That’s $4 billion we don’t have to borrow from overseas lenders.”
Good afternoon. It’s a pleasure to be with you again today.
My thanks to Michael and the Auckland Chamber of Commerce, and Steve and Massey University, for inviting me back to this annual event.
This is the fifth time I’ve spoken at this forum since becoming Minister of Finance.
With your support later this year, I look forward to returning in 2015.
Today I’d like to update you on the Government’s economic programme and summarise the opportunities we have to lock in the benefits of our improving economy.
And I want to talk about what you can expect from another National-led Government, should we have the privilege of a third term.
Our approach will remain clear and predictable.
In the shorter term, we’ve worked to protect New Zealanders from the sharpest edges of the recession, and to help the people of Christchurch through the devastating earthquakes.
We have incurred significant extra debt by spending in excess of our revenue to protect the most vulnerable families, to maintain living standards and to support the renewal of our second-largest city.
As the economy improves, we will begin repaying that debt until it is down to prudent levels.
The public service deserves congratulations on its achievements over the last five years because it’s unique in three ways.
The Kiwi Counts survey shows that, in general, the public thinks services are better now than they were five years ago, almost across the board.
Secondly, it’s been impressive that we’ve been able to meet our fiscal objectives every year for the past five years. That is very unusual by the standards of any developed country. I would argue that the path ahead looks more sustainable than we had expected.
But thirdly, and most importantly, a reason for congratulations is that we are seeing measurable results and measurably improving results with some of New Zealand’s most complex problems.
Even when we aren’t seeing improvements we’re seeing a gritty and honest grappling with the complexity of those problems. That picture is painted by the six-monthly update in the Better Public Service results that has been updated on the website today.
It shows that in some areas we’re making quite significant progress – in fact so much that there must be other causes than what we’re doing. For example the extent to which our communities are becoming safer with a lower crime rate I think has surprised everybody. We have significantly fewer people going through our court systems, like 25 per cent fewer young people just over the last couple of years.
The latest update of the Government’s Better Public Services initiative shows significant gains continue to be made, though challenges remain in achieving these ambitious goals, Finance Minister Bill English and State Services Minister Jonathan Coleman say.
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Finance Minister Bill English will join representatives from the
world’s largest economies at the meeting of G20 finance ministers and
central bank governors in Sydney this week.
Australia, as host of the G20 this year, has invited New Zealand to attend as a guest alongside the G20 members. The finance ministers will meet again in Cairns in September.
“New Zealand strongly supports Australia’s approach to the G20 presidency, including its focus on promoting strong economic growth and employment, and making the global economy more resilient to deal with future shocks,” Mr English says.
“Australian Prime Minister Abbott has also invited New Zealand to join the Australian Leadership Group of the Business 20, a forum that brings together business leaders from across the G20.
“Later this year, Australia will host an Australasian business week involving over 400 of the world’s top business leaders. Such significant opportunities do not come along often. We appreciate Australia providing this opportunity for New Zealand – both at a political and business level – to showcase our country at an important international forum.”
The finance ministers’ meeting, which runs from Friday through to Sunday, will discuss a range of issues including the global economy, investment and infrastructure, the challenge of managing growth, and taxation.
During his visit to Sydney, Mr English is hoping to hold bilateral meetings with United Kingdom Chancellor of the Exchequer George Osborne and Canadian Finance Minister Jim Flaherty.
The first comprehensive analysis of the performance and condition of New Zealand’s infrastructure networks confirms they are performing well, but there are challenges ahead, Finance Minister Bill English says.
“Until now, we have not had a complete picture about the condition and performance of our entire national infrastructure networks,” he says.
“The first National Infrastructure Evidence Base, published today by the National Infrastructure Unit, provides that essential information and will allow us to more effectively invest for growth.
“It concludes that good progress has been made in coordinating and planning investment in our national infrastructure networks. It also highlights some of the challenges that lie ahead, including the need to better understand the drivers of future demand for infrastructure and the options for meeting that demand in a growing economy.
“This information will help us address our future infrastructure challenges and opportunities, and help inform decisions we make to manage them. It will also provide a benchmark for tracking progress over time.
“The National Infrastructure Evidence Base has involved a range of government agencies, local government and private sector infrastructure users and providers working together,” Mr English says. “It’s a good example of the collaboration needed when considering long-term investment decisions.”
Despite the domestic recession and global financial crisis, over the past five years the Government has made a multi-billion dollar investment in priority new infrastructure such as roads, rail, ultra-fast broadband, irrigation, electricity transmission and rebuilding Christchurch.
“This investment has added almost $16 billion of infrastructure assets to the Government’s books over the last three years alone,” Mr English says.
“It has supported thousands of jobs across the country and is helping to build a solid platform for sustainable economic growth.
“As the evidence base notes, we face a range of infrastructure challenges, including from technology and demographic changes. Therefore, our traditional ways of spending more and building more infrastructure will need to change if we are to meet those challenges.
“With over $120 billion of taxpayer-owned infrastructure assets, there is plenty of scope to use these assets better, to manage and smooth our demand and to optimise our investment. Even small changes can have significant impacts,” Mr English says.
The National Infrastructure Evidence Base documents are available at:
Infrastructure Fact File
- Around $16 billion of infrastructure assets added to the Government balance sheet over the last three years – buildings, state highways, electricity generation assets, electricity transmission assets, rail network, ultra-fast broadband and other plant, property and equipment.
- $650 million invested in the national electricity transmission grid over the past three years, with a further $295 million forecast this year.
- About $690 million invested in the roll out of Ultra-fast Broadband and the Rural Broadband Initiative.
- Over $2 billion invested in New Zealand's railways, including Auckland and Wellington metropolitan rail since 2011.
- The $12.28 billion national land transport programme between 2012 and 2015 is the largest ever in New Zealand.
- $1.74 billion expected investment in public transport between 2012 and 2015 - a 21 per cent increase over 2009-2012.
- $1 billion allocated to the 21st Century Schools from the Future Investment Fund.
- $1.83 billion of estimated infrastructure spending in Christchurch and another $1.48 billion of estimated spending on Crown assets following the earthquakes. Over $1 billion allocated to the greater Christchurch education renewal programme.
- $746 million of health property plant and equipment forecast this year.
The Government has set up a working group to advise ministers on how the collection, sharing and use of business and personal information will impact on public services in the coming years.
“The Government has put in a lot of effort over recent years to provide frameworks for the collection, storage and use of information,” Finance Minister Bill English says.
“In particular, we have worked hard to catch up with public expectations about security and privacy in the fast-moving electronic environment.
“We have mostly done a good job of that. It’s important that we keep thinking ahead to develop the technical and legal frameworks that will be needed for us to continue to meet public expectations as technology develops.
“Thinking about those frameworks will be the role of the New Zealand Data Futures Forum.”
Statistics Minister Maurice Williamson says governments around the world are working through similar challenges.
“The forum will work with other experts and institutions overseas as well as the private and public sector at home to share and develop ideas,” Mr Williamson says.
“New Zealand’s thinking is already reasonably advanced in this area and we are well-positioned because we have few layers of government and privacy legislation is in a single place at the national level.”
The forum is being chaired by former Treasury Secretary and World Bank Executive Director John Whitehead.
Data Futures Forum members are:
- John Whitehead, Chair
- Stephen England-Hall, Loyalty NZ
- Joshua Feast, Cogito, Boston, USA
- Professor Miriam Lips, Victoria University
- James Mansell, Ministry of Social Development
- Paul O’Connor, Datamine
- John Roberts, Department of Internal Affairs
- David Wales, The Treasury
- Evelyn Wareham, Statistics New Zealand
The forum will build on infrastructure developed by Statistics NZ, which shares anonymised data with accredited analysts for research purposes, and the data-intensive investment view of welfare developed by the Ministry for Social Development.
The forum, which is jointly sponsored by The Treasury and Statistics New Zealand, has a broad mandate and no deadline has been set for it to report back.