Alex Malley: Budget consistency is an English virtue

Finance Minister Bill English. Photo / iStock
Finance Minister Bill English. Photo / iStock

Bill English's eighth budget is a strong investment in New Zealand's future economic capability. Getting back in surplus and forecast future growth on the back of Government stewardship is very welcome too.

The $761m new spending package earmarked for science and innovation, education and apprenticeship programmes and regional economic development demonstrates this Government is still firmly focussed on growth and jobs.

It also demonstrates the concrete benefits from stable, prudent and smart governance over eight budgets. This Government is delivering real benefits to working New Zealanders and the productive sector: forecast average GDP growth of 2.8 per cent to 2020, falling unemployment, rising wages and Government books back in the black.

This result, achieved in the face of significant commodity price headwinds which in previous decades would have been a heavy blow to the economy, shows how the strategy to diversify New Zealand's economy away from agricultural commodities to knowledge-based and higher value sectors is working.

It is also a strategically savvy budget that does much of the heavy lifting required to improve the underlying fiscal position, while still substantially addressing several key policy issues.

A large $2.2b investment in new health initiatives, another $1.4b for education, a multi-pronged $394m investment in housing and a $652m social investment package including money to reform services and support for vulnerable children - addresses issues of critical importance to New Zealand, and the Government focus on these areas is welcome.

The real centrepiece of the Budget is the Finance Minister's continued fiscal responsibility and commitment to growth and jobs that will lead to real economic transformation.

To that end, the increased science and innovation investment represents a future-proofing against cyclic commodity price shocks and further development of the knowledge-intensive sectors of the economy. There's real investment which makes 'Innovate NZ' more than just a catch-phrase.

The additional spending on tertiary education and apprenticeship programmes, with a particular focus on science, engineering and agriculture, is also an investment in the future and will place New Zealand and its citizens in a position to safely navigate the regional and global challenges that lie ahead.

Support in the form of tax tweaks for the economy's engine room, the SME sector, is also welcome. New Zealand already boasts one of the simplest tax systems in the world and these measures will further ease compliance requirements. One hopes support for SMEs will remain an area of continued focus for the Government.

CPA Australia CEO Alex Malley.
CPA Australia CEO Alex Malley.

The tight rein on spending has been a defining characteristic of English's stewardship and his promise to reduce net Government debt to around 20 per cent of national GDP by 2020 is an important commitment.

In totality, this budget demonstrates this Government's remarkable consistency of purpose and policy over eight years in delivering on a business growth agenda that gives the private sector the certainty and stability it needs to develop and implement its own growth agendas and initiatives.

This stability, which sits at the core of New Zealand's economic progress, contrasts sharply with circumstances in Australia, where Malcolm Turnbull became the country's fifth prime minister in five years when he took the job from Tony Abbott last September.
This consistency in delivering initiatives as part of a broader economic plan is missing in Australian politics, where there is more of a short-sighted focus on opinion polls at the expense of an articulated vision for the country.

Tactics for re-election are no substitute for strategy to deliver future prosperity, which is one lesson whoever wins this year's election might take from English's consistency of purpose across eight budgets.

- NZ Herald

Alex Malley is chief executive of CPA Australia.

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