Todd McClay: Budget to put us on better footing

Thursday, May 16, is Budget Day when Deputy Prime Minister Bill English will announce the Government's plan to get New Zealand back to surplus in 2014-15. While this might not seem important when one considers the day-to-day challenges of everyday life, getting back to surplus is vital if we want to boost the economy and create jobs.

Budget 2013 will show the steps the Government is taking to help the New Zealand economy grow, by supporting Kiwi businesses to innovate, expand, and hire more staff.

We will build on the momentum achieved over the last four years which in the face of continuing global uncertainty is more important than ever.

Currently, New Zealand is in pretty good shape compared with almost every other developed country in the world. The economy is continuing to grow, real jobs are being created, and confidence is increasing. The Government's responsible economic management since the start of the global financial crisis means that by 2014/15, New Zealand will be one of the few developed countries running surpluses and able to start repaying debt.

Latest statistics show the economy grew 3 per cent in calendar year 2012, comparable to Australia's 3.1 per cent growth. Homeowners will be pleased that under this Government, New Zealand has the lowest mortgage rates since 1965. Further, after-tax wages are up 22 per cent over the past five years - more than twice the rate of inflation - and over the past two years 54,000 new jobs have been created.

We've also removed unnecessary regulation and red tape which has restrained growth and have put in place investment in important infrastructure, including road networks, and connecting New Zealand with the world through ultra-fast broadband. There's also better support for families and good results being delivered from the health system. We're ensuring every child gets the skills they need at school, and we've supported our justice system to keep you safe at home and in your community.

Recently, the International Monetary Fund even gave its tick of approval to our responsible management of the Government's finances. The IMF says we're getting it right with our balanced approach to supporting growth and reducing public debt. This is because we're working hard to put the economy on a more competitive footing.

In particular, we have embarked on more than 300 initiatives to build export markets, innovation, skills, capital markets, infrastructure, and better access to our natural resources, as part of our Business Growth Agenda.

This is helping give businesses the confidence to invest, grow and hire new staff. Our sensible fiscal and monetary policy is helping to keep interest rates and inflation low, which is benefiting businesses and households across New Zealand.

Operating in surplus is important for our future. It will help keep interest rates lower for longer, which is the single biggest cost to most households, and it helps take the pressure off New Zealand's exchange rate, which is good for the country's exporters. Getting the books in order means we will owe less to overseas lenders, which will help ensure the economy is stronger and in a better position to handle economic shocks.

Budget 2013 will show the Government is busy, focused, and taking action across the many areas needed to boost growth, investment, and jobs. As your elected member of Parliament, I'll continue to work hard for Rotorua businesses and households to ensure we get access to the resources we need to boost the local economy, support families and create jobs here.