Beehive Bulletin For Week Ending Friday 16 May 2002
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Also Available On-Line
Budget 2003 builds capacity for growth
Budget 2003 demonstrates the government's commitment to managing the country's finances responsibly and lifting New
Zealand's economic performance, says Prime Minister Helen Clark. It has a coherent and highly credible programme for
2003/04, strongly supports economic growth through innovation, and funds good public services and infrastructure. Helen
Clark says the budget also provides confidence that New Zealand is well placed to deal with the challenges of a
turbulent international environment.
Some Budget 2003 detail
Finance Minister Michael Cullen's fourth budget includes a projected surplus of $3.8 billion in 2003-04. Gross debt at
lowest recorded levels and forecast to continue to decline steadily as a proportion of GDP ? from 27.3 per cent this
year to 23 per cent in 2006-07. The budget brings ahead by one year the full contribution rate to the New Zealand
Superannuation Fund with a $1.879 billion payment for 2003-04. The rate of economic growth is expected to halve over the
next 12 months to 2.2 per cent before rebounding to 3.2 per cent in 2004-05.
New Zealand well placed to weather economic headwinds Michael Cullen says influences including weak world demand, SARS,
drought, possible electricity disruptions and a stronger dollar are already weighing on business confidence and
activity. But New Zealand is better placed to weather these headwinds than many other economies. Michael Cullen says
there is likely to be scope in next year's budget for substantial new initiatives, particularly to assist low and
middle-income families and to smooth the transition from welfare to work. Before significant new spending, the
government must be satisfied this is sustainable, says Michael Cullen.
Some Budget 2003 highlights
Total education spending increases by $393m to $8.2 billion in 2003-04 including an increase of 8 per cent for early
childhood education, $167m over four years to provide an extra 774 teachers, $422m over four years for tertiary
students, $85m to raise to 150,000 the number of people in industry training during 2005. Total health spending rises
$711m next year to $9.6 billion. There's an additional $140m over four years, plus $12m capital, for research, science
and technology, $110m over four years to respond to the sector taskforces on Biotechnology, Design, Screen Production
and ICT. Another 318 new state houses will be built above the nearly 3000 already planned, plus a large modernisation
programme for existing stock. There's a $256m package over the next four years to fight crime and the impacts of crime
and $73m over four years to promote overseas trade.
Youth training package
A comprehensive budget package of youth training initiatives was announced by Prime Minister Helen Clark. The $56.6m
package will make the Gateway programme ? senior school students in work-based training - available to all 1-5-decile
schools by 2007. There's funding for 2,500 additional Modern Apprenticeships annually. Helen Clark says the government
is committed to having all young people in education, training, or a job by 2007.
New Cabinet responsibilities
Prime Minister Helen Clark has announced new portfolio allocations following the resignation from the Cabinet of Mark
Gosche for family reasons and his replacement by Rick Barker. Steve Maharey becomes Minister of Housing, Phil Goff
becomes Minister of Pacific Island Affairs, Margaret Wilson relinquishes the Courts portfolio but retains an associate
role, Paul Swain becomes Minister of Corrections, Ruth Dyson takes responsibility for the Children, Young Persons and
their Families Service, John Tamihere becomes Minister for Small Business, Rick Barker retains the Customs portfolio and
his associate portfolios, and takes on Courts, Damien O'Connor becomes Minister of Racing. New ministers outside the
Cabinet are Taito Phillip Field as Associate Minister of Pacific Island Affairs, Justice and Social Development and
David Cunliffe, who becomes Associate Minister of Finance, Revenue, Communications and Information Technology. Winnie
Laban becomes Parliamentary Private Secretary to Marian Hobbs, Minister for the Environment and Associate Minister of
Foreign Affairs and Trade and to Jim Sutton in his trade-related responsibilities.