New Zealand has come out of the global recession in better shape than most countries. The economy is growing but the road to recovery will be bumpy.

Last year, we faced the worst economic downturn in decades. National took steps to support jobs and families, and to create an environment that gives businesses the confidence to keep staff on and create new jobs.

We also worked hard to get spending under control and put the government’s books in order. We turned around a 10-year forecast of ballooning public debt that threatened our international credit ratings. Even so, the government is borrowing $240 million every week for the next four years.

This year, our focus has shifted to lifting New Zealand’s economic performance.

Budget 2010 on 20 May will have four main goals:

• Lifting the long-term performance of the economy to deliver jobs, higher incomes, and better living standards for Kiwi families.
• Reforming the tax system to make it fairer, more sustainable, and more supportive of economic growth.
• Better delivery of public services to meet New Zealanders’ expectations of modern public services, while recognising the ongoing pressures on taxpayers.
• Maintaining firm control of the government’s finances so we can return to Budget surpluses and pull back our rising debt.

In last year’s Budget we identified $2 billion of lower-priority public spending to move to frontline services over the following four years.

This year we have found another $1.8 billion of lower-priority spending. Over the next four years we will move this to higher-priority services. That’s a lot of money we are putting into important areas such as better healthcare, better education, and making our neighbourhoods safer.

We will keep weeding out lower-quality spending. We will also live within the $1.1 billion new spending allowance we set ourselves. From 2011, we will restrict increases in this allowance to 2 per cent a year.

This year’s Budget is about doing things better and smarter, after a decade where taxpayers’ dollars were spent too freely.

National is determined to lift New Zealand’s economic performance. That’s the only way we will be able to create real jobs, boost incomes, improve living standards, and provide the world-class public services that Kiwi families need.

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