The only real jobs plan is one which gets business confident enough to employ, Finance Minister Bill English said yesterday.
"Most people's measure of recession is joblessness not GDP," he told a post-Budget business breakfast in Wellington. "We will focus on policies to lift business confidence and investment."
Bringing public
debt under control - a central theme of the Budget - was part of that. Nothing would inhibit growth more than a mountain of debt, he said.
Government debt had peaked in the late 1980s above 70 per cent of GDP, a similar level to what threatened without policy action now. It had taken 20 years to get it down to 20 per cent, assisted by economic tailwinds, asset sales and tough fiscal measures (a reference to the Mother of all Budgets).
"We are determined we are not going back there again," English said.
The next step on the road to recovery would be a focus on what policymakers could do to lift productivity.
The Government was undertaking an extensive review of regulation, ranging from the Overseas Investment Act to how the nation managed water, English said.
The Budget had not stinted on investment in infrastructure.
And tight limits on spending growth would help drive improvement in the performance of the public sector.
"We have given the public service a year in which there is still a big inflow of cash," he said.
"But the world has changed. A decade of deficits is always going to be a shadow over the public service."
Government spending over the past five years had increased twice as fast as the nominal economy or tax revenues.
While resisting calls for tax cuts Labour had directed money into structural spending, including Working for Families and interest-free student loans.
"We are committed to maintaining those entitlements but it does mean a long road back to surplus," he said.
