On the Road to Recovery

Whether you’re a small business owner, a graduate looking for a job, or someone at home making ends meet, this economic downturn has been tough. This has been a worldwide recession but it has been felt very much at a local level.

Faced with the worse economic downturn in decades the National-led Government took the necessary steps to support jobs and families, and creating the environment that gave businesses the confidence to maintain and create new jobs.

Our ReStart package gave assistance to those who have lost their jobs during the economic downturn. The nine-day fortnight, the Job Support Scheme and Job Ops initiatives have helped keep people employed and created jobs for our young people.

In addition to the assistance given through government agencies, more jobs have been created through our home insulation package, and bringing forward infrastructure projects. Work is also beginning on the New Zealand Cycle Trails, which will create jobs, and be a real boost for local businesses in those regions.

We have maintained Superannuation entitlements, benefits for low-income families, and Working for Families assistance. It’s important to give people certainty at a time of economic uncertainty. Our decision to maintain spending on entitlements and public services, borrowing on average $250 million a week, has helped cushion New Zealanders from the hardest edges of the recession.

There are signs that the economy is coming out of the downturn. We’ve recorded a positive increase in growth in the last quarter. Business and consumer confidence is improving. And our major trading partners, like Australia and the United States, are also seeing signs of growth.

However, the road to recovery will be quite bumpy and this is reflected in the financial statements issued recently. Certainly, the impact of the recession on the Government's revenue will be felt for some time.

Government spending and short-term initiatives won’t bring about sustained economic growth. That's why it is critical we get a step-change that permanently lifts our economic performance.

We have already started this by removing regulations and streamlining the Resource Management Act, which will make it easier to do business. The tax cuts we delivered this year have helped put more money into the pockets of workers. Our small business package put in place a range of initiatives to reduce compliance costs, help keep up cashflow, and help businesses retain staff.

We need to continue this step-change by cutting the red tape that restricts business growth and prosperity, investing in productive infrastructure, delivering better, smarter public services, lifting education and skills, pursuing innovation and business assistance, and ensuring our tax system promotes economic growth.

This will be the focus of Budget 2010.