Tilting the economy towards saving and investment

The Government’s financial statement for the year ending 30 June 2010, released today, shows the Crown's finances are broadly in line with forecasts published with the Budget in May.

Compared with the previous year, government spending was flat, revenue was down and deficits increased. This reiterates the need for the Government to stick with its broad-based programme to manage its finances responsibly and to tilt the economy towards savings, investment and exports.

Early signs are encouraging. Households are starting to reduce borrowing and inject income into homes and saving. Last year alone that injection was worth $5 billion. This is reversing the trend seen between 2003 and 2008 where households were borrowing to boost their disposable income.

This shows New Zealanders understand our need to rebalance the economy away from debt and spending towards savings and investment. While this is challenging for retailers and domestic industries in the short term, it is better for the economy in the long term.

We will continue working to boost growth to create jobs and raise incomes, encourage savings and investment, and help families get ahead.