Thursday, 15 May 2003
Appropriation (2003/04 Estimates) Bill
Appropriation (2002/03 SUPPLEMENTARY Estimates)
Bill
Mr Speaker took the Chair at 2 p.m.
Prayers.
Appropriation (2003/04 Estimates) Bill
Hon Dr MICHAEL CULLEN (Minister of Finance): I move, That the Appropriation (2003/04 Estimates)
Bill be now read a first time.
Bill read a first time.
Appropriation (2002/03 SUPPLEMENTARY
Estimates) Bill
Hon Dr MICHAEL CULLEN (Minister of Finance): I hereby present the
Supplementary Estimates of Appropriations for the Government of New Zealand for
the year ending 30 June 2003 (B.7). I move, That that paper be published.
Motion agreed to.
Hon Dr MICHAEL CULLEN (Minister of Finance): I move, That the Appropriation (2003/04 Estimates)
Bill be now read a second time.
Mr Speaker, this year's Budget has been
prepared amidst the most uncertain political and economic situation
internationally for a very long time. The long bull market of the 1990s, fed by
international political and economic liberalisation and growing integration,
seems now a distant memory.
In their place, older and more malign
factors have reasserted themselves: war, terrorism, and their associated fear
and uncertainty; disease; and economic stagnation in many of the world's most
important economies.
Against this international backdrop the
primary objective of Budget 2003 is to tell our own national story of certainty
and stability. Budget 2003 delivers results in terms of gross debt, net debt,
and the operating balance exclusive of revaluations and accounting changes
which exceed the targets set in Budget 2002. It also looks forward to key
fiscal indicators for the coming three year period which are broadly in line
with the most recent December Economic and Fiscal Update. If events unfold over
the next year as forecast this will give room for some targeted and significant
moves in Budget 2004 and beyond.
Since the presentation of last year's
Budget the world has been through a period of turmoil and increasing
uncertainty. The world's key economic engine - the United States - has not only
slowed down but is sending very mixed signals about the short to medium term
outlook. The build up to the conflict in Iraq exacerbated that situation.
Equity markets continue to drift downwards or, at best, sideways, punctuated by
short, unsustained recoveries.
A growing U.S. current account deficit
and a return to deficit financing at the federal level have led to a weakening
in the U.S. dollar which has been the main factor driving an appreciation of
the New Zealand dollar. This has placed further pressure on our tradeables
sector.
In addition to these broader
influences, others, including more local factors, are likely to impact on
growth during 2003 and into 2004. Drought across much of the country,
particularly in areas not normally subject to drought, and late frosts have led
to reductions in land based production. Falling milk prices have combined with
the rising New Zealand dollar to reduce returns to dairy farmers for the
current year well below the very high levels experienced over the previous
couple of years. The SARS epidemic appears to be impacting on the growth in
tourism. Finally, the very real prospect of a dry winter in combination with
the independent redetermination that has reduced the Maui gasfield's reserves
may be expected to impact on growth in the short term.
All these factors will moderate the
very strong growth New Zealand has experienced over the last year or so. Year
to March growth is expected to have been 4.4 per cent, placing New Zealand at
the very top of the OECD growth ladder. The weakening factors already referred
to are expected to be offset in part by a range of domestic factors.
Net migration inflows remain strong and
house prices are rising. Both will support domestic demand. Business and farm
balance sheets are in good shape providing an important buffer. Monetary
conditions are expected to continue to ease over the year ahead.
On balance, it is anticipated that the
domestic factors will create a soft spot in quarterly GDP growth in the middle
of this year, dragging growth down to 2.2 per cent for the year to March 2004.
Growth is then expected to rebound in the following year to 3.2 per cent as the
downside factors unwind and the external sector recovers. It is expected that
easier monetary conditions in conjunction with a recovery in trading partners'
growth will help support the rebound in GDP growth from the latter part of 2004
onwards.
This pattern of economic growth, though
it is likely to continue to be high by OECD standards over the forecast period,
is expected to lead to some weakening of the labour market with unemployment
rising to 5.6 per cent by March 2004 and holding at that level before dropping
from mid - 2005 onwards. This is also likely to be a very strong performance by
international standards.
The strength of the economy over the
last year is reflected in the fiscal forecast for the operating balance
exclusive of revaluations and accounting changes. That figure, forecast to be
$2.29 billion in Budget 2002 and $3.52 billion in the 2002 December Economic
and Fiscal Update, is now expected to be $4.04 billion or 3.1 per cent of GDP.
This results in a gross debt forecast
for 30 June 2003 of 27.3 per cent of GDP, compared with the forecast of 28.6
per cent in Budget 2002. The corresponding figures for net debt are 14.0 per
cent and 16.8 per cent. Thus, for the third year in a row, performance has
exceeded expectations.
The final operating balance for the
year, including revaluations and accounting changes, is likely to be severely
affected by revaluations, including those in the Government Superannuation Fund
and Accident Compensation scheme. Revaluations are presently estimated to total
$2.68 billion, reducing the final operating balance to $1.36 billion. This does
not, of course, affect the cash position.
These revaluations flow in large part
from changes to the discount rate arising out of changing interest rates. As
such they are the reverse effect of the positive impact on the operating
balance of rising interest rates in earlier years and themselves are likely to
be at least partly reversed out over time. The ACC revaluation is also
substantially affected by recalculations based on, for example, a reassessment
of experience of the very long tail of the most serious cases from the 1970s
and 1980s.
The forward forecasts for the operating
balance have to be compared with this year's OBERAC. For 2003/04 a small drop
to $3.8 billion is forecast, rising thereafter to $4.5 billion in 2004/05, $5.3
billion in 2005/06, and $6.2 billion in 2006/07. Gross sovereign issued debt is
projected to fall to 23 per cent of GDP in 2006/07.
This is well below the government's
stated prudent gross debt upper limit. In this light it is useful to provide
some additional focus around the debt target and the fiscal possibilities that
exist over the forecast horizon.
The broadly stated target is to keep
gross debt below 30 per cent of GDP. However, given prudential management with
a margin for risk, the bias is more against increasing debt than lowering it so
that there will be a natural tendency for the gross debt percentage to trend
downwards over time.
The projected decline does indicate the
likelihood of sufficient fiscal headroom in Budget 2004 for some significant
initiatives beyond the amount presently allowed. Whether these will in fact
proceed will depend on a number of judgements about the economic and fiscal
position, including the level and direction of the structural surplus.
Should present indicators prove to be
accurate, the Labour Progressive Government will be in a position to make some
significant improvements in the level of family assistance to low to middle
income families and in the incentives to move off welfare benefits into
employment. Work will be proceeding on a range of possibilities over the next
year with the final choice of measures in part dependent on the amount of money
available. The United Future Party will of course, be consulted about the shape
of the proposed changes.
One decision has already been taken in
the context of this year's budget. The strength of the government's fiscal
position has enabled us to move to full funding of contributions to the New
Zealand Superannuation Fund a year earlier than anticipated. The Fund is
expected to go to market in the final quarter of 2003 in what seems likely to
be a favourable combination of a relatively strong New Zealand dollar and
moderate equity prices.
The New Zealand Superannuation Fund is
part of the government's capital budget. Another large part of that is occupied
by the State-owned enterprises.
This Labour-led Government indicated,
on taking office, that it was no longer in a "preparing-for-sale"
mode with respect to the SOEs, but a "long term hold" one. Some 18
months ago work began on the implications of that stance for both the Crown and
the SOEs.
Because of the size and strategic
significance of the SOEs, it is crucial to the success of the economy that they
perform well and are able to achieve their full potential to best advance the
government's economic objectives.
There is no intention to abandon the
basic framework established in the 1986 State Owned Enterprises Act, or to
become involved in operational matters or compromise the accountability of SOE
boards.
But we do need to adjust to the
post-privatisation environment. Specifically, we need to get the balance right
between allowing SOEs to grow and diversify, and ensuring that Crown capital is
available for the government's other priority areas.
In particular, I will be seeking to
incorporate SOE requests for equity for significant investments into the normal
budget process, where commercial realities allow, so that the Crown can better
integrate its capital management.
Mr Speaker, the SOEs make a significant
contribution to the Crown’s revenue, the bulk of which, of course, comes from
tax.
We have shown that we are prepared to
listen to rational arguments where tax is creating unnecessary problems for
businesses. Our tax simplification
initiatives are an example of that but most tax acts have a number of measures
that are a response to problems raised by the business community.
This is an ongoing process. Early in our first term of government,
legislation was enacted that allowed a deduction for research and development
expenditure that is reported as an expense for accounting purposes. A private sector group has been established
to report to the government on how well this is working. It would not be surprising if this results
in some modifications to the law to remove any identified problems.
The next tax bill will include a
proposal to subject to GST some imported services and to remove multiple layers
of GST that can be imposed on the financial sector. These are issues that have been worked through with private
sector co-operation and remove deficiencies in the GST rules that were
recognised but not resolved when GST was first introduced.
A key concern of tax policy in the
future will be to underpin in the tax area the government’s overall commitment
to an open economy with strong international links.
The next tax bill will include
legislation to put into effect the agreement we have reached with the
Australian government on trans-Tasman imputation. This agreement is a landmark.
It is the first time our two governments have coordinated a common
approach to tax issues. We shall look
for any future opportunities to build on this.
A tax policy priority this year is to
bring forward proposals to enable overseas venture capital to be invested in
New Zealand in accordance with normal international tax rules. This will ensure
that New Zealand does not lag behind similar Australian initiatives in this
area. Similarly the government will
this year consider measures to provide a temporary exemption for migrants from
tax on foreign income, the cost of which, in many cases, must now be paid by
New Zealand businesses that require the skills of those migrants.
These are various ways the government
is updating our tax system in line with our economic objectives.
The fundamental objective of our tax
system remains the raising of revenue to meet our social and economic objectives. This needs a constant programme of measures
to counter the ingenuity of those who will go to great lengths to avoid tax.
The next tax bill will include measures
along these lines. One of these is
aimed at schemes that are structured to offer high income investors a return
from tax deductions to the extent that the investors need not be concerned with
the underlying economics of the arrangement.
Many of these base maintenance measures have been targeted at individual
taxpayers. Large companies and the financial sector benefited from New
Zealand’s strong economy over recent years.
Budget 2003 provides Inland Revenue with the resources to apply the law,
and proposes changes to the law if that is needed, to ensure that these high
profits are being matched by tax payments.
One other significant initiative in the
tax area this year is the inclusion of legislation to provide for a new lower
rate of tax on employers’ contributions to superannuation schemes for employees
earning less than $38,000.
One very useful way to think about
providing an adequate income in retirement is the World Bank approach, which is
based on three tiers: public provision, employment-related provision, and
private provision.
The Government’s current focus is on
the second tier of the World Bank model, employment-based superannuation. This has the most potential for getting New
Zealanders into long-term savings patterns.
The Government acknowledges that there
are a number of disincentives to saving through employment-based schemes and
for employers to offer these schemes.
Within the next few weeks, the
Government will be introducing legislation to remove the current over-taxation
of employers’ contributions to superannuation funds on behalf of low-income
savers. The present tax rate on
employer contributions is a flat 33 per cent, regardless of income.
From 1 April next year, employers can
apply a lower tax rate of 21 per cent on contributions made to superannuation
funds on behalf of employees earning under $38,000 a year. This should remove one of the disincentives
for low-income earners to save through employment-based schemes.
The direction of the Government’s
future work in this area is to look at removing the disincentives for employers
to offer these schemes, and the inequity of the current tax law in overtaxing a
fund’s earnings in relation to low income savers.
The savings industry and the government
are cooperating on this work which is moving in parallel with that being
undertaken by the Periodic Review Group on retirement income policy.
Mr Speaker, fiscal certainty and
prudence have been the hallmarks of this Government. We have resisted pressures to spend surpluses before they arrive,
or to give them away by means of unsustainable tax cuts. Other jurisdictions are demonstrating how
easy it is to slip back into substantial deficits. It is a path we do not choose to follow if for no other reason
than that we are in the most favourable demographic position we are likely to see
for the next two generations or more.
At the same time as saving for the
future we need to be actively building it as well. Budget 2003 does this through a series of targeted spending
initiatives aimed at smarter growth helping to build stronger and more secure
communities.
Much of the additional spending
underpinning smarter growth is directed towards strengthening the Government’s
Growth and Innovation Framework.
Fostering innovation is critical to New
Zealand’s growth potential. The 2003
Growth and Innovation package contains measures to increase the applied value
of publicly funded research, promote greater private sector investment in
research and development, and develop closer links between public sector
research institutions and industry.
$140 million, plus $12 million capital, is committed to new investment
in Vote: Research, Science and Technology over the next four years.
A new pre-seed Acceleration Fund will
be established. This fund will have $19
million to invest over the next four years, in partnership with the private
sector, in the early commercial development of promising discoveries in our
research institutions.
Existing research funds such as the New
Economy Research Fund and the Marsden Fund are being boosted substantially
again.
The 2003 Growth and Innovation package
also makes a significant contribution to building skills and talent. For example, the package includes an
initiative to enable more active marketing of skilled potential immigrants and
measures to strengthen the interface between industry and the education sector,
including additional resources for training schemes.
As part of the implementation of the
Growth and Innovation Framework in 2002 the government established four private
sector taskforces to develop sector specific strategies. Within the 2003 Growth and Innovation
package there is provision for a $110 million contingency over four years to
enable the implementation of initiatives that the government undertakes in
response to the taskforces’ reports.
Business incubators are shaping up as
important sources of innovative new businesses so the government is again
increasing the support for them. Budget
2003 contains $6.4 million over four years to accelerate the work of the
existing 15 incubators and to facilitate the development of new ones.
Inevitably most of the businesses which
emerge out of these incubators will be small businesses. They will, therefore,
face many of the challenges that small businesses do.
Such businesses will be assisted by the
integration of Trade New Zealand and Industry New Zealand into New Zealand
Trade and Enterprise, the funding for which is provided in Budget 2003. New Zealand Trade and Enterprise will be
able to provide seamless support for such companies from start up to the time they
go global.
While international studies suggest
compliance costs for business are lower in New Zealand than in most other
developed countries there is still a lot that can be done. Budget 2003 provides funding for the
establishment of a Small Business Advisory Group drawn directly from the business
community. This group will work with
and advise the new Small and Medium Sized Enterprise Unit that has been
established in the Ministry of Economic Development.
Much work has already been done in the
tax area to make it fairer for SMEs.
Legislation has been passed to ensure fairer treatment for businesses
having tax payment problems; measures have been introduced to allow tax pooling
through commercial intermediaries and to make it easier to use payroll firms to
deal with PAYE.
In the course of development and due
for release for discussion over the coming months are a number of more
innovative measures to help small businesses.
The first of these will be a proposal
to align the payment date for provisional tax with that for GST, at least for
small and medium-sized businesses. This
will assist with cash management and reduce compliance costs. A further proposal to base provisional tax
on a percentage of GST turnover will add to this by allowing qualifying small
businesses to match tax with cash flow more closely.
The third proposal involves a
significant cost to the Government but with significant benefits to small
businesses. That is to subsidise the
cost of an employer engaging a payroll firm to manage the payroll and associated
tax obligations. The subsidy would be
for up to the first five employees. It
is possible the payroll firm would be able to take on other compliance costs as
well thus further assisting small businesses.
For new businesses a proposal to
provide an incentive to pay provisional tax in the first year of business
should help smooth the transition through the following year.
It will also be proposed to simplify
the multirate FBT calculation by removing the present complex mechanism that
involves taking account of the employee’s total remuneration at the threshold
of their marginal tax rate and by enabling FBT returns to be filed
electronically.
A range of other initiatives have begun
or are in train. These include the Department of Labour developing best
practice employment information; the development of a training and
accreditation scheme for councillors and commissioners involved in Resource
Management Act decision making; the launching of a business portal as a
web-based one stop shop to provide all relevant government information; an
e-commerce guide for SMEs with over 8,000 copies already distributed; and
simpler and more modern payment systems for road user charges.
The purpose of all these initiatives is
to assist businesses to meet the responsibilities of living in a well-ordered
and progressive society at minimal costs in terms of both time and money. It does need to be said, however, that some
compliance costs are an intrinsic part of living in such a society. Recent experiences with the building
industry show the dangers – and the costs to the public – of an unthinking
adherence to deregulation and front end cost minimisation.
Mr Speaker, the greatest need that
businesses have is for skilled and well-trained employees. Labour is now the most important input in
any modern economy and the quality and quantity of skills demanded continue to
rise. Educating for a successful,
innovative economy is, therefore, a crucial theme of Budget 2003. But education is also about the development
of each individual to his or her full potential and about the pursuit of values
that cannot be expressed in purely monetary terms.
Total education funding rises by $393
million to $8.2 billion for the 2003/04 year.
Further increases in out years are provided for as policies that start
early next year take full effect.
Our first priority is to reduce
inequalities in educational achievement by ensuring that all New Zealanders can
reach their potential, regardless of their background.
We have the foundations, including new
assessment systems, in place to do the work. Now we are shifting our focus to
strengthening our education system’s ability to deliver quality education,
better teaching, and better learning for students of every age.
We continue our commitment to
increasing participation in quality early childhood education with an extra $55
million in spending over the next four years.
This includes increased funding for early childhood centres and
initiatives to improve the supply of qualified teachers, in particular for
Māori and Pasifika communities.
Total education funding for early
childhood for the 2003/04 year rises to $421 million, an increase of 8 per cent
compared with the previous year.
Budget 2003 will also drive a concerted
approach to improve effective literacy teaching and learning in primary
schools. It is essential that all
children have the right foundations for success later in life, in education and
in the workplace.
$15 million
will be injected over four years, bringing total spending on literacy
initiatives to $25 million over that period.
Budget 2003 sees an additional $167
million over the next four years to fund extra teachers, over and above roll
requirements, in order to ease staffing and teacher workload pressures. From next year schools will be provided with
an additional 774 primary and secondary full time teacher equivalents, as part
of the ongoing implementation of schools staffing improvements.
An additional $22 million over four
years will fund existing initiatives to increase the supply of teachers,
bringing total investment in teacher supply to over $66 million. This
investment will increase recruitment and retention, particularly in
hard-to-staff areas or areas of subject shortages, as a bulge in student
numbers moves through the secondary school system.
Our second goal is to build an
education system that equips New Zealanders with 21st century skills.
To this end, we will be building the
capability of students, educators and institutions to take advantage of the
vast opportunities available through information communications technology.
A new investment of $42 million over
four years will enable schools to connect in a safe and secure environment so
they can effectively participate in the knowledge society. This initiative will help schools build their
information technology and networking infrastructure so they can connect easily
and efficiently to online resources.
This ICT investment is over and above the government’s investment in the
rollout of high speed, broadband internet access to rural and urban communities
nationwide by the end of 2004.
Budget 2003 continues the work of
previous budgets in putting in place a comprehensive reform of the tertiary
education system. Post-school learning
is undeniably important for its own sake, but also has pivotal role in
contributing to the skills and knowledge New Zealand needs for both its
economic and its social development.
The key decisions about the reform
process have now been made and the focus of this budget is to provide
predictability to the sector to enable it to concentrate on the goals of
excellence, relevance and access.
We are spending over half a billion
dollars to support excellence in the areas of both research and teaching.
Budget 2003 commits $422 million to
implement further increases to tuition subsidies in each of the next three
years in order to maintain and enhance the quality of teaching. For the first time, we are setting the
funding rates for the student component on a rolling triennial basis. This means that universities, polytechnics
and other providers will have much greater predictability about their tuition
income.
Tertiary education organisations’
ability to achieve excellence will also be assisted through an extra $58
million over four years in capital and operating funding to support innovation
and development, and in particular e-learning capability.
We are determined to make the workplace
a key site of learning. We have
committed $84 million over four years to give predictable multi-year funding
for the Industry Training sector and to reach our goal of having 150,000
trainees in place during 2005. From
there, we intend to work towards the even more ambitious goal of 250,000
trainees in 2007.
We will ensure that we have enough
people with the right skills, and we want to ensure that they use those skills
in New Zealand. This Government
recognises the need to address labour shortages and skill shortages in critical
vocations. Communities need to be assured
that critical skill gaps will be addressed.
From 2004, scholarships and research fellowships will provide financial
incentives to influence potential students, learners or recent graduates to
stay and work in vocations critical to the country. The Government is committing $23 million over four years to this
initiative.
The fee maxima policy, the details of
which are announced today, is an integral element of the government's objective
of ensuring that tertiary education remains affordable. It will provide some certainty and
predictability as to the future costs of tertiary education, while also
providing some flexibility to providers in terms of their fee-setting behaviour
and their future guaranteed income.
Improving the transition for young
people from school into employment or training is a government priority. This Government aims to have all 15 to 19
year olds engaged in appropriate education, training, work, or other activities
leading to long-term economic independence and well-being by 2007. A multifaceted approach is being taken that
recognises the individuality of our young people. More than $40 million extra
over the next four years will be spent to expand the Gateway programme,
increase the number of modern apprenticeships, provide additional
post-placement support services for youth trainees and pilot an individually
planned and managed approach to assist at risk youth with career planning.
Mr Speaker, equipping our people with
the skills necessary for success in the 21st century is a key part of the
government’s social development programme.
Realising the vision of New Zealand as
an innovative, knowledge based society begins and is nurtured in the home. The support, and expectations, of families
provide the base from which children and young people build successful and responsible
adult lives.
The Families Commission initiative
developed by the Labour Progressive coalition and United Future New Zealand is
intended to raise the profile of family and parenting issues.
This Budget also provides the first
steps towards improvements in family income assistance. This year we are improving support for low
income parents entering full time work by increasing the maximum number of
subsidised childcare hours from 37 hours per week to 50. The income thresholds
for Family Support, Child Tax Credit and Parental Tax Credit are to be
increased, making this assistance available to more families. While these are very modest steps, amounting
to some $59 million over four years, they signal this Government’s clear
intention to make improvements to benefit and tax based family income
assistance in the 2004 Budget, subject to the qualifications I made earlier.
In this Budget we are instituting two
new measures to protect the integrity of the social security system. New data matches with the Department of
Internal Affairs, ACC and Housing New Zealand will augment current data matches
with a range of agencies and ensure benefit accuracy. Payment accuracy will also be checked through early intervention
initiatives and new reviews of benefit entitlement carried out by additional
Work and Income benefit control staff.
Alongside ensuring benefits are
properly administered, Work and Income staff have a vital role assisting people
to move from benefit into sustainable employment. Our healthy labour market over the last year has helped Work and
Income to achieve record employment placement results.
Work and Income will be applying more
resources to employment services for job seekers. Work and Income clients will benefit from additional assistance
in areas such as more active work brokerage and support, industry based work
assessments and career coaching.
Employers will gain, as more people will be work ready to fill
employment needs and opportunities.
Some groups, however, still face
additional barriers to gaining employment.
In this year’s budget $21.2 million over four years is being made
available to help more refugees and migrants access job opportunities and for
more employers to tap into this skilled labour pool.
Housing and health are key aspects of
social development. Funding is provided
in Budget 2003 for an additional 318 state houses, to reconfigure 80 existing
houses, and to begin a major modernisation programme.
Funding is also provided for an
additional 77 community houses and for supporting the expansion of local
government and third sector housing.
Inevitably, the increases in Vote:
Health are very much larger. Total
health operational and capital spending rises from $8.63 billion in 2002/03 to
an estimated $9.61 billion in 2003/04.
The Health Funding Package, at present
an additional $400 million a year up to 2004/05, is rolled out a further year
to 2005/06 with an additional $535 million being provided in that year on top
of funding for the first year of the phase-out of asset testing for long-stay
geriatric care. This means that total
health spending is forecast to rise to $10.56 billion in 2005/06.
This continues a tendency over recent
years for increases in health spending to be well above the rate of growth in
nominal GDP. Operational health spending is projected to move from 5.4 per cent
of GDP in 1995/96 to 6.5 per cent in 2005/06.
District Health Boards, in particular,
need to ensure that they manage within these forecast spending limits. Some success is being achieved in winding
back DHB deficits but further efforts will be required. In particular, DHBs need to understand that
wage and salary increases must be met within their current forecast incomes.
As I indicated last year, the Health
Funding Package is to allow for certainty in planning. It does not represent the Government’s
opening offer on funding.
Within these very large amounts
particular attention is being paid to primary health care. In 2003/04, $165 million has been allocated
to primary care funding and this amount will grow significantly over the next
three years. There are more than one
million New Zealanders enrolled in Primary Health Organisations with more than
700,000 in Access PHOs that give them low patient fees.
Around $20 million of this extra
funding is allocated this year to allow PHOs to charge low patient fees for
young people aged between six and seventeen, to lower prescription charges to a
$3 maximum for children and young people and Access PHO users, and to roll out
the CarePlus programme.
Particular initiatives promoted by the
Progressive Party are those aimed against drugs, including funding for
community programmes to combat the use of cannabis and other illicit drugs, a
national drug information analyst, and a youth residential treatment centre to
serve the South Island.
Other programmes promoted by the
Progressive Party include measures to support families, carers, and whanau
following a suicide or serious suicide attempt and assistance to Youthline.
Mr Speaker, a primary duty of
government is to keep its citizens safe.
Budget 2003 commits $192 million operating funding and $64 million in
capital funding over the next four years on a range of initiatives to reduce
crime and the impacts of crime, improve the effectiveness of youth offending
interventions, implement public law and criminal law changes already agreed by
Cabinet, speed up Treaty of Waitangi negotiations processes, and maintain core
service levels.
There will be funding for an additional
50 Auckland-based police officers as well as a specialised Auckland DNA
collection squad. There will be funding
for two specialist police teams to deal with the rapid increase in
methamphetamine laboratories plus funding to boost the capacity to investigate
organised crime and terrorism.
Victim support organisations funding
will be increased, as will support for youth justice programmes and pilot
programmes with good prospects for success in reducing crime and improving
outcomes for young offenders.
Security at the border also receives
attention.
The Government is investing in
protecting New Zealand’s reputation as a safe trading partner through a
significant boost in the staffing and funding of the New Zealand Customs
Service. This investment is to provide
capability to inspect and x-ray high risk import and export shipments at all
New Zealand sea ports.
This year’s budget sees an increase in
Customs operating expenditure for trade security of almost $9 million and a
significant capital investment in x-ray technology, in the order of $15 to $25
million, which will be completed via a tendering process.
Up to 130 additional staff will be
employed.
Customs will take advantage of the
latest developments in mobile x-ray technology, so that it can be used at all
New Zealand sea ports. High risk cargo
for screening will be identified by Customs intelligence analysis of all
available data.
Customs has a central role in
responding to heightened international security concerns. The Service has a
long history of managing the flow of people, goods and craft into New Zealand
to protect the community.
Now, internationally, the expectation
is that countries will also take action to secure the export supply chain. We
must take action to ensure our vital export trade continues to flow as freely
as possible in the light of new international security demands.
Mr Speaker, New Zealand's identity as a
nation rests in large part on the preservation of our environment, the
promotion of our culture and heritage, and the full participation of its
indigenous people in the life of the nation.
Preserving our environment is no longer
just a matter of conservation as traditionally understood. It also encompasses
participating in the international effort to slow and halt the process of
climate change. Budget 2003 provides for the establishment of the Climate
Change Office, additional funding for the carbon monitoring system, developing
policy and incentives to help small and medium sized enterprises reduce
emissions, and the allocation of 4 million emission units to provide incentive
funding for emissions reduction projects.
Energy efficiency, a key element in the
climate change programme, is assisted by a doubling of the size of the Crown
Energy Efficiency loans scheme.
Biosecurity capability and new organism
enforcement is enhanced. Measures to achieve this include extra resources for
the enforcement of the new organisms component of the Hazardous Substances and
New Organisms Act, and additional funding of $2.5 million a year to allow the
Environmental Risk Management Authority to transfer hazardous substances to the
new central regime. Other initiatives will assist in sustainable resource use.
Budget 2003 continues the trend for the
last three years in providing substantial increases in funding for Vote: Arts,
Culture and Heritage. Over the next four years the extra funding totals $75.9
million. This includes $11.6 million for Creative New Zealand; $2 million for
the Royal New Zealand Ballet; and $8 million for the Historic Places Trust.
The Government is committed to ensuring
public service broadcasting is a key component of the country's cultural life
and a vital contributor to New Zealanders sense of national identity. The
additional funding for Television New Zealand and Radio New Zealand support
their mandates to improve the quality of public broadcasting, increase levels
of local content, and meet the needs of diverse audiences.
The Television New Zealand Act 2003
which came into effect on 1 March 2003 creates new objectives for Television
New Zealand. An extra $17 million over the next four years supports TVNZ in
giving effect to the Charter by adding depth and quality to its existing
programming and by adding programming intended to serve a greater range of New
Zealanders. An additional $8 million over four years to New Zealand On Air will
enable the agency to maintain levels of contestable funding for local
television programming.
An additional allocation of $14 million
over four years to Radio New Zealand will enable the public broadcaster to
establish FM broadcasting for National Radio and to maintain and enhance news and
other programming services at a level consistent with all aspects of the Radio
New Zealand Charter. The move to FM will ensure that RNZ is able to compete
successfully in the national and international marketplace, particularly in
attracting younger audiences.
Mr Speaker, significant improvements in
the position of Maori in New Zealand society have occurred over the last few
years. Substantial reductions in unemployment, very large growth in tertiary
education enrolments, and the government's programme of capability funding and
devolved services delivery have all contributed to this.
The Treaty settlement process has moved
to a stage where settlements are now occurring on a regular basis. The
settlements achieved under successive governments have sufficient variety to
provide useful precedents and benchmarks for those to come. To assist in the
process, funding has been provided for an additional negotiating team.
$6.5 million over three years is
allocated for a programme of public information on the Treaty of Waitangi. This
should assist both Pakeha and Maori in arriving at a better understanding of
the Treaty and its relevance to contemporary issues. At the same time the
Government has been refocusing capacity building funding to a more strategic
basis. This will enhance the integrity and credibility of government funding by
ensuring the management structure of government funded Maori organisations is
strengthened.
Work will continue on a commonsense
approach to facilitating collaboration between government agencies and Maori
community organisations. Solutions delivered by Maori for Maori are more likely
to be successful in achieving the desired outcomes.
Mr Speaker, this Government has followed a consistent economic policy stance for the last three and a half years. That has centred around the three pillars of stable and certain fiscal policy, rebalancing and moving to the mainstream previously unbalanced policies, and adopting a more active role for government in facili