Hon Steven Joyce
Minister of Finance
25 May 2017
Delivering for New Zealanders
Budget 2017 is delivering for New Zealanders with significant investments in public services and infrastructure, and a Family Incomes Package that will help them get ahead, Finance Minister Steven Joyce says.
“Our economy is performing well and that's a tribute to the hard work of New Zealanders,” Mr Joyce says. “We have experienced positive growth in all but one quarter over the last six years.
“This is our opportunity to build on the economic platform we have all created, and deliver a significantly higher level of prosperity for New Zealanders in the years ahead."
The Treasury is forecasting real GDP growth of 3.1 per cent on average for the next five years.
“This positive outlook is driven by the Government's strong economic plan and confident New Zealand companies who are investing, innovating, exporting and creating skilled jobs,” Mr Joyce says.
Over 200,000 more jobs were created over the last three years and another 215,000 are expected by 2021.
“There are now more than 2.5 million people employed in New Zealand for the first time, and the employment rate of adult New Zealanders is the highest ever, at 67.1 per cent.”
The Treasury's latest forecasts show surpluses growing from $1.6 billion in 2016/17 to $7.2 billion in 2020/21. The operating allowance in Budget 2017 has been increased to $1.8 billion per year.
The forecasts also show the Government is on track to meet its target of reducing net debt to around 20 per cent of GDP in 2020, with net debt expected to be at 19.3 per cent of GDP by 2020/21.
“This budget sets a new medium-term debt target of 10-15 per cent of GDP by 2025, to ensure we have the capacity and the resilience to respond to our next economic shock or natural disaster,” Mr Joyce says.
The new operating investment in Budget 2017 includes:
- Investing in a Growing Economy – $1 billion over four years to keep building a sustainable growing economy, including a further $373 million in the Innovative New Zealand Programme.
- Building Public Services - $7 billion over four years to deliver the public services for a growing country, including $3.9 billion in the Health Sector, $1.1 billion in education, and $1.2 billion in the Justice Sector.
- $321 million of the public services expenditure is ring-fenced for new Social Investment initiatives to improve the lives of our most vulnerable people.
A key part of the Budget is a $2 billion a year Family Incomes Package, which is designed to provide better rewards for hard work, to help families with young children meet their living costs, and improve incomes for those struggling with high housing costs.
“It is important that New Zealand families share directly in the benefits of stronger economic growth. This package is a first step toward simplifying the tax and transfer system and allowing more Kiwi families to spend more of their own money,” Mr Joyce says.
Budget 2017 also includes a major infrastructure commitment with $4 billion allocated to new investment in the Transport, Education, Justice, Health and Defence Sectors.
“The new investment in this budget and our total $11 billion commitment of new capital over the next four budgets, takes the Government's total capital investment over the next four years to $32.5 billion. That's a 40 per cent increase on the last four years,” Mr Joyce says.
“The net result is that the Government's capital investment absorbs virtually all the cash generated from our operating surpluses over the next four years.”
Mr Joyce says Budget 2017 is a prudent budget that invests in public services and infrastructure for a growing country, improves resilience, and lifts family incomes.
“This budget is the next step in our plan to deliver greater prosperity. It is a budget that will deliver for all New Zealanders,” Mr Joyce says.
Media contact: Anna Lillis 021 683 282