Rt Hon Jenny Shipley
Prime Minister

• MINISTERIAL STATEMENT
• OUR POLICIES FOR PROGRESS
• MEDIUM TERM FISCAL GAINS
• TARIFF REMOVAL BY 2006
• SCOPING OF CONTACT ENERGY LTD
• SUPER CHANGES
• SUPERANNUATION 2000 TASKFORCE
• HOUSING PACKAGE
• IMMIGRATION PACKAGE
• TOURISM PACKAGE
• KIWI INNOVATION

"Our Policies for Progress see us managing our budget so we can invest in our future while still acting responsibly in relation to international economic realities."

Mrs Shipley says that in order for New Zealand to have a positive economic and social environment in the 21st century, where all of us can make the most of our opportunities, the new National Minority Government has set a number of goals. The Government wants to:

• Make a difference with social assistance which genuinely breaks cycles of disadvantage;
• Ensure low-income people are not taxed to pay benefits to the better off;
• Improve business competitiveness and increase the living standards of New Zealanders;
• Strengthen our economic and fiscal management.

"Today we are announcing the first part of our Policies for Progress that will contribute to improving the outlook for our country over the medium term, by delivering $400 million savings in Government spending over the next three years," said Mrs Shipley.

"We are earmarking $80 million of those savings for spending in important areas of social assistance for those most in need, in the areas of housing, education and employment. Over the coming weeks we will announce our Policies for Progress in these areas. Our programme is comprehensive, fair, and good news for New Zealand.

"The savings will also help us pay off debt and get "back in the black".

"Our Policies for Progress also include a range of measures which will help boost our economy by promoting New Zealand in the world. Future announcements in this area will add to the many initiatives already announced to improve the competitiveness of business. A package of measures relating to immigration will also be released as part of the programme over coming weeks.

Mrs Shipley says the Government is today announcing Policies for Progress as follows:

Contact Energy

Government has agreed to work towards the sale of Contact Energy, partially by public float. Money from the sale will help get us back into surplus and pay off debt and it's expected that reduction in debt servicing costs will free up around $35 million a year for other purposes.

Tariffs

Government has reached agreement on a timeline for the reduction of tariffs to zero by 2006. This has the support of the industry as well as a majority of Members of Parliament. The Government rejected the suggestion of removing all tariffs immediately in 2000 and has chosen a pathway that balances fairness to industry, workers and consumers. This track also sees New Zealand meet its international obligations in good time.

Superannuation

Government has agreed to setting up the Superannuation 2000 Taskforce to find a sustainable and affordable solution to providing superannuation for our children and grandchildren. The team will have an independent chair and involve non-partisan members of the community and will work alongside politicians over the next two years. They will report in late November 2000.

Research shows that 85 per cent of New Zealanders want a consensus on superannuation. Over the next two years, it should be possible to achieve this. Sweden and the United States have just been through a similar process with successful results.

While this work on long term solutions is underway, the Government has today agreed on a move that will give certainty in the medium term. The Government will continue to pay superannuation at current levels, with an increase each year in line with inflation.

This will protect superannuitants purchasing power. The Government's decision to move the floor for superannuation from 65 per cent of the average wage to a minimum level of 60 per cent of the average wage will help to ensure the affordability and sustainability of the current scheme. No pension or benefit will be cut and the usual inflation-related adjustment will occur in April.

"As we move ahead with our Policies for Progress I am confident New Zealanders will see that this minority Government is continuing National's hallmark of good housekeeping which allows us to invest in a positive future for all of us.

"I want to acknowledge the responsible and sensible attitude of the nine Independent MPs and the Act and United parties, who have worked with National MPs and have all been prepared to put politics aside and focus on the best long term interests of our country.

"They are making a significant contribution to the economic and social wellbeing of our country and the agreements we have reached will bring a new sense of hope and progress for many New Zealanders," the Prime Minister concluded.

Ends