3. AMY ADAMS (National—Selwyn) Link to this
to the Minister of Finance
How is Budget 2011 supporting future growth and jobs?
Hon BILL ENGLISH (Minister of Finance) Link to this
The Budget sets out the next steps in the Government’s plan to build faster growth and more jobs. Most New Zealanders now understand that sustainable growth and jobs cannot be based on spending and borrowing more but need to be built around saving, investing, and exporting. New Zealanders are reducing their own demand for debt. As a result, credit growth is now close to zero for the first time in 20 years. New Zealanders also expect that their Government will behave responsibly. That is why the Government has plotted a path back to surplus in 2014-15, turning round the forecasts of ever-rising debt and permanent deficits that this Government inherited.
Higher national savings should contribute to sustainable growth. As the Budget pointed out, between 1990 and 2005 we grew our export volumes by over 5 percent a year. Had this trend continued, exports would today be $14 billion higher. If we want to get back to that sort of growth, then we need higher national savings so that we have the capacity to invest in faster growth.
Over the Government’s first three Budgets we worked to take the sharp edges off the impact of the global financial crisis, protected the most vulnerable, improved the tax system, invested in infrastructure, and set a course back to surplus. There are an increasing number of positive factors for growth: growing trade links with Asia, the lowest interest rates in 40 years, the highest terms of trade in several decades, two-thirds of the population with a marginal tax rate of 17.5 cents, and higher private savings rates. We hope these factors will underpin a growing lift in business confidence that will flow through into more jobs and higher incomes.