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Budget 2011 Building Our Future

Budget 2011 Building Our Future. Hon Bill English, Minister of Finance. Three Budgets: One plan. Budget 2009 Helped New Zealanders through the recession Turned around forecasts of ever-rising debt Budget 2010 Built platform for growth on savings, investment

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Budget 2011 Building Our Future

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  1. Budget 2011Building Our Future Hon Bill English, Minister of Finance

  2. Three Budgets: One plan Budget 2009 Helped New Zealanders through the recession Turned around forecasts of ever-rising debt Budget 2010 Built platform for growth on savings, investment The biggest tax reform in 25 years Budget 2011 Sets a faster path to surplus, repays debt Rebuilds Christchurch Builds faster growth, higher national savings

  3. From record deficit to surplus

  4. Progress over three Budgets …

  5. … keeps debt below 30% of GDP …

  6. … and we help rebuild Christchurch • Rebuilding Christchurch a priority of Budget 2011 • Govt costs $8.8b, including $3.3b for EQC, ACC • $5.5b Canterbury Earthquake Recovery Fund • Quake costs absorbed, back in surplus by 2015

  7. Economy rebounds after quake

  8. More jobs, lower unemployment Unemployment falls below 5% by 2012 170,000 new jobs over the next four years Forecasts

  9. Budget 2011 avoids over $10b of borrowing by 2015 $5.6b through the operating allowance … • Previous allowance out to 2015: $4.4b • Actual net spending to 2015: -$1.2b • Savings in operating spending: $5.6b … reducing the need for extra borrowing …

  10. Budget 2011 avoids over $10b of borrowing by 2015 … and $5-7b in mixed ownership model proceeds • Means we can redeploy existing capital, rather than always funding more from general revenue • Funds around one-third of core investment, new schools, hospitals, broadband etc Average net borrowing falls to $100m a week in 2011/12, start repaying debt in 2014/15

  11. KiwiSaver lifts real savings

  12. Making WFF sustainable

  13. A better public service … Ensuring public agencies play their part Getting better value for taxpayers Efficiency savings of $980m over three years: $650m from agencies meeting costs of retirement savings schemes $330m from administration efficiency gains

  14. … and more frontline services Directing funding to frontline services $2.2b more for health – electives, disability support, new mothers $1.4b more for schools and early childhood Investing in key infrastructure $942m for ultra-fast broadband $250m invested in KiwiRail; $88m for Wellington Metro rail network More investment in roads and electricity

  15. Promoting savings and investment Govt back to surplus, wider investment opportunities Mixed ownership model to proceed from 2012 With New Zealanders at the front of the queue Creates an Earthquake Kiwi Bond, inflation bond Establishes local government funding agency Resources the new Financial Markets Authority

  16. Early signs of progress

  17. Platform for faster growth, jobs • Budget 2011 next steps in Govt programme: • Sets a faster path back to surplus in 2014/15 • Even with the costs of rebuilding Christchurch • Helps increase national savings • Large programmes sustainable, Government’s books in order, national savings increase • Builds a strong platform for growth • Rebalancing economy, 170,000 new jobs

  18. Budget 2011Building Our Future Hon Bill English, Minister of Finance

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