Alex Malley: English deserves applause for impressive financial plan

Finance Minister Bill English during his speech at the ANZ post-Budget breakfast in Wellington. Photo / Mark MItchell

Opinion

As a picture of New Zealand's forecast financial performance and the Government's fiscal plans, Finance Minister Bill English's seventh Budget impresses.

While some commentators have criticised deficit and surplus numbers, what I see is the continuing execution of a plan, delivered in challenging times, to improve New Zealand's international competitiveness, support growth and build confidence.

The sustained strength of the New Zealand economy is well-known in Australia, as is the stability of the leadership and the consistency of messaging. The contrast with Australia is striking. While last year's Australian budget focused on cuts, austerity and protracted political battles, sweeteners were the centrepiece of this year's offering.

It is leadership that takes a country forward. The different approaches manifest themselves most tellingly in the unemployment forecasts - New Zealand is tracking down to below 5 per cent, while Australia is stuck over 6 per cent and rising.

For all the emphasis on deficit versus surplus, economic growth and increasing employment underpinned by stronger consumer and business confidence are far more important indicators than a blind race to deliver a surplus for surplus' sake.

The Budget shows the overall economic picture remains solid - government expenditure appears under control and the challenges of a rising currency and falling commodity prices are being managed.

The jobs of tomorrow will come from companies that may not exist today - something this Budget grasps, with investments to continue the transition to a knowledge-based economy, including investments in innovation, R&D and education.

Initiatives such as establishment of privately-led Regional Research Institutes and more funding for R&D growth grants are significant.

With total investment in science and innovation up 70 per cent in eight years, this continued and sustained investment, combined with existing policies such as encouraging crowd-sourced equity funding, will help embed a culture of innovation throughout New Zealand businesses and build the nation's capabilities to be a real player in the digital economy, the source of the high paying jobs of the future.

With the Government forecasting unemployment to fall below 5 per cent, rising average wages, solid economic growth of around 3 per cent and robust public finances, New Zealand is better placed than many to make nation-building investments.

Minister English should be applauded for delivering a positive and responsible Budget which balances the challenges of housing affordability, falling commodity prices and global uncertainty with building confidence, maintaining New Zealand's growth trajectory and investing for the future.

• Alex Malley is chief executive of CPA Australia.