Economy gets into shape

Budget 2014, to be presented to Parliament on May 15 will be the National-led Government’s sixth budget. Some of those budgets have felt at times like an exercise in crisis management.

Finance Minister Bill English has done a great job of steering the country through the recession, the global financial crisis and the aftermath of a very destructive and expensive natural disaster.

Everyone’s circumstances are of course different and some people are still finding it hard.

But on the whole, New Zealand has come through the trials of the past few years in remarkably good shape.

Yes, we have taken on more debt to protect the most vulnerable families, to maintain living standards and to support the rebuilding of Christchurch.

But that period is coming to an end.

Budget forecasts will show that in the coming financial year the Government is going to post a surplus, albeit a small one.

Once that has been achieved, we can start getting our debt down.

The Budget will show that we remain on track to reduce net government debt to below 20 % of GDP by 2020.

At the same time, over successive budgets, we have set out on a longer-term path to repair the damage to our economy from the excessive borrowing, consumption and government spending of the mid-2000s.

That path has involved reforms like the tax switch of 2010 that significantly reduced personal income tax rates across the board, and encouraged savings and work.

John Key is Prime Minister of New Zealand. The above is a small portion of his speech delivered at the North Harbour Club at the North Harbour Stadium on April 2, 2014.

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