Swain Paul: Supplementary Estimates — Imprest Supply Debate 
Swain Paul: Supplementary Estimates — Imprest Supply Debate 
[Volume:618;Page:13785] 
Hon PAUL SWAIN (Minister of Labour) 
 on behalf of the 
 Minister of Finance 
: I move  
That the Appropriation (2003/04 Supplementary Estimates) Bill and the Imprest Supply (First for 2004/05) Bill be now read a second time 
. I want to make some comments and range over a number of issues relating to these bills. 
First of all I will deal with the broad economic situation. New Zealand grew by 3.5 percent in 2003 making us one of the fastest-growing nations in the OECD. Near-term strength and growth are still present but growth has passed its peak. However slowing net migration slower employment growth and the lag effect of a high exchange rate are expected to slow growth to 2.8 percent in the year ending March 2005 and to 2.5 percent in the year ending March 2006 but a rebound is expected from the year ending March 2007 due to a lower exchange rate and continuing global growth. Unemployment is forecast to remain under 5 percent for the next 4 years—a fabulous effort—inflation is forecast to peak at 2.6 percent before falling to 2 percent by 2008 and wage growth averages are expected to be 3.8 percent per year over the period. 
In the fiscal area gross debt is our fiscal anchor. It influences our spending decisions. We are committed to managing gross debt at prudent levels; we expect it slowly to reduce over the longer term and to pass through 20 percent of gross domestic product before 2015. We are on track to do this. Our Budget allocations have been significant this year at over $2 billion per year. New spending will be lower in future Budgets at about $1.8 billion. This will enable us to continue to meet our fiscal goals. Net debt including New Zealand Superannuation Fund assets falls to zero by 2007-08 and we continue to run an operating surplus in line with our fiscal goals. Our forecast surpluses largely finance our capital-spending programme including the Superannuation Fund Reserve Bank reserves 
and 
advances and other new capital spending. This means that the Government has to borrow only a relatively small amount of $808 million in 2004-05. 
As far as the Budget package is concerned it has of course been well received all around the country. Working for Families which was the key Budget announcement has three main aims. The first is to make work pay by ensuring that people are better off by being in work and are rewarded for their work effort; the second is to ensure income adequacy with a focus on low to middle income families with dependent children; and the third is to ensure that people get the assistance they should to support them into and to remain in work. We expect to see the following from the Working for Families packages: we expect to see nearly 300000 households assisted by April 2007; we expect over 60 percent of families with children will receive increases in family income assistance by 2007; we expect average increases to be around $66 per week; and we expect families in the lower income range of $25000 to $45000 will gain almost $100 per week on average. No wonder this Budget has been well received around the country! 
Spending on economic development tourism research and trade promotion has increased by over 25 percent since the Government took office. This year we are investing a total of over $1.21 billion in these areas including new funding in this Budget of $181 million. We have also made significant investments in other growth-related areas such as education—for example Modern Apprenticeships—and revenue with for example compliance cost reduction. Close to $900 million extra funding in 2004-05 in our key social-spending areas in addition to Working for Families includes $306 million for health $480 million for education and $91 million for housing. There is significant new capability funding over the next 4 years for a number of agencies. 
In-year decisions picked up in the supplementary estimates are of particular note in the bill and they include $260 million for the Department of Child Youth and Family Services $146 million for the Department of Corrections—which is close to my heart—$144 million for the Defence Force $76 million for the Ministry of Foreign Affairs and Trade and $28 million for the Customs Service. The strong public services funding which includes capability funding and strong social services funding includes $443 million in the supplementary estimates for operating funding in 2003-04. The supplementary estimates also include $186 million additional capital funding in the 2003-04 year of which $101 million is assistance to business mostly arising from the rail decisions and $148 million is to strengthen public services—$55 million for the justice sector being the largest single component. 
As far as the Imprest Supply Bill is concerned supply is sought for 2 months—one-sixth of the total appropriations contained in the main estimates. This is the usual amount sought in the first Imprest Supply Bill. 
I commend the Imprest Supply (First for 2004/05) Bill and the Appropriations (2003/04 Supplementary Estimates) Bill to the House.