Budget 2012 – sticking to a plan that's working

Prime Minister John Key says this month’s Budget will show the Government is on track and sticking to its plan.

In a pre-Budget speech in Wellington, Mr Key reiterated that the National-led Government’s responsible management of the books means an operating surplus is set to be posted in 2014/15.

“This year will see another zero Budget as we chart a course back to surplus,” Mr Key said.

“The Government will continue to spend in priority areas. This Budget will protect and grow areas of public spending that are important in delivering real results to New Zealanders.”

“We’ll announce a range of initiatives as part of Budget 2012 that will show that we are getting things done while still staying on course to return to surplus.”

Mr Key said the Government is taking the same moderate and balanced approach it has to its three previous Budgets.

“We have constantly reprioritised spending towards things that work and we also have a firm focus on results rather than just inputs.

“Budget 2012 will continue that approach – and for the first time since the global financial crisis and the worldwide recession, the Government’s books are set to be in the black in 2014/15.”

“Returning to surplus means we can start reducing debt. That is no small achievement. It has taken a combination of disciplined fiscal policy and a willingness to make trade-offs. We have had a plan to rebuild and strengthen the country, we have stuck to it and it is working.”

Mr Key said there will be an overall increase for health and education in the Budget, although savings will also be made within these areas. The savings will be reinvested back into frontline services.

“There will be an upfront investment in welfare reform – we are going to spend money on supporting beneficiaries into work but we expect that this will be more than recouped over the forecast period through a lower welfare roll.

“We will also spend some more on science and innovation, as we promised at the election, to help build the research and innovation base of the economy.”

Mr Key said the Government’s overall spend on tertiary education will be rebalanced in Budget 2012.

“The Government remains committed to keeping student loans interest free but we are also determined to reduce the cost of the overall loan scheme to taxpayers.

“Savings will be reinvested in improving teaching and research within our universities and other tertiary institutions.

“Budget 2012 will reflect the Government’s four priorities of responsibly managing the Government’s finances, building a more productive and competitive economy, delivering better public services, and supporting the rebuilding of Christchurch.”