The National-led Government’s focus for the New Year is growing our economy.

Economic growth creates jobs, lifts incomes, and improves the living standards of New Zealand families. Only through lifting our economic growth can we close the gap with our trading partners and create new jobs to replace those lost during the recession.

We are in a good position to do this. We have lower unemployment and economic growth is stronger than expected, thanks to a more stable global economy and the Government’s success in managing New Zealand through the recession.

New Zealand is on the road to recovery, but we cannot be too complacent. Global growth may yet weaken again and there are multiple challenges in our own economy.

For New Zealand businesses to compete globally and New Zealander’s incomes to rise, we need to have the right environment.

Six key areas will help to achieve this. These are investment in productive infrastructure; removing red tape and improving regulation; supporting business innovation and trade; improving education and lifting skills; lifting productivity and improving services in the public sector; and strengthening the tax system.

Budget 2010 will feature initiatives across these areas.

We have also set some of the best minds in the country the task of coming up with ways to lift growth. Among the groups to report back to the Government recently is the Tax Working Group. This report on ways of improving New Zealand’s tax system will contribute to our Budget decision making.

Equity and fairness for households and the economy will guide our consideration of options identified by the tax group. The only thing we have ruled out is a capital gains tax on the family home.

In considering any significant changes to the tax system National believes the benefits must clearly outweigh any potential difficulties. We will consider proposals that are fiscally neutral.

National believes tax policy can play a role in increasing growth and productivity. We want to ensure our tax system rewards people for hard work, encourages them to save, and helps Kiwi families to get ahead.

National wants to bring about positive change that will make a big difference to New Zealand’s economic future.

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