Finance Minister Grant Robertson. PHOTO/GETTY IMAGES
New Zealand’s economy was “sound” but Finance Minister Grant Robertson acknowledged changes can be made for a more inclusive economy.
“A big part of Budget 2018 is focusing on getting the basics right, making sure everyone has a warm, dry, safe place to live,” Mr Robertson told Wairarapa Chamber of Commerce members and guests at a lunch meeting in Masterton on Monday.
In a presentation ahead of the Budget 2018 announcement next month, Mr Robertson spoke about New Zealand’s economic status and what the future was looking like.
The country’s prospects were “good” as a trading nation, “but we always have to be mindful that we live in a world of uncertainty”.
“That means we need to diversify where we send our exports and what we export, because in that environment of uncertainty, having options is absolutely critical,” he said.
The government has a new line of focus around research and development.
The country cannot afford to be an exporter of raw commodities, rather creating added-value products before exporting, he said.
New Zealand’s economy is the “envy” of many countries across the world, despite going through the global financial crisis, and the Canterbury earthquakes.
“The basis of New Zealand economy is sound.”
Transforming the country’s economy to be “sustainable” is the next goal, he said.
“I don’t just mean environmentally sustainable, I mean sustainable for future generations to generate high paying jobs, and then we will have an economy that will deliver through thick and thin.
“We need to change to be more productive, more sustainable and more inclusive.”
Talking money with the minister
Finance Minister Grant Robertson spoke to Times-Age reporter BECKIE WILSON ahead of May 17’s Budget announcements about Wairarapa’s economy and the government’s plans to boost it.
BECKIE WILSON: The biggest question is, when is Wairarapa going to get some government money?
GRANT ROBERTSON: You can be rest assured we are very well aware of the importance of the rail line for both the people and the economy of Wairarapa.
The other part of it is the Provincial Growth Fund, and look, there is a real opportunity for Wairarapa there.
I think the region needs to come together on that, which they are.
The big thing there is, there are some other infrastructure areas such as telecommunications and making sure that actually wherever you are in the region that you can work and do business.
We want to see investment moving into those areas.
But also, what are the industries that are going to really lift the incomes of people who live in this area?
How can we add value to what Wairarapa does? I think that’s what we are really excited about.
BW: The Greater Wellington Regional Council submitted a $100m bid for this year’s Budget to help upgrade the Wairarapa train service. Are you able to give an indication on the possibility of securing this funding?
GR: Because we have redone the Transport Strategy – that’s what we announced the other day – it will just take a little longer now that that’s out there.
But all I can say is that we are very much aware of it and we understand the importance to this region of getting the rail line improved.
BW: The three district mayors are discussing their submission for the Provincial Growth Fund, and have highlighted the importance for an airline service for the region. You mentioned the announcement of the Transport Strategy, is there any point in the region doubling up on funding support for an airline?
GR: I absolutely encourage the mayors to continue with that [Provincial Growth Fund] proposal.
Getting a good understanding on what they want is important to the decisions we are making.
I’m interested in looking at what role we can play in making sure the infrastructure is right, such as the airport buildings and runways, so providers, be it Air NZ or someone else, can actually know with confidence they can come into a region.
BW: Wairarapa is known for its low income base, what packages can families and individuals be supported with?
GR: From July 1, most of the impact of our Families Package comes into being.
Looking at one aspect of that, changes to the accommodation supplement, a family of three getting the supplement will be $85 a week better off.
As well as the family package we have other packages such as the Winter Energy Payment, meaning pensioners and beneficiaries can get between $450 to $700 a year.
All that money will be coming into the Wairarapa region from July 1 and will make a really big difference to incomes each year.
BW: Since you have got rid of the tax cuts, is there a time frame we can see a wage increase?
GR: In terms of wages, what’s forecast over the next few years is that wages will grow by about 3 per cent a year, and so that’s better than it has been.
We lifted the minimum wage to $16.50 an hour on April 1, we plan to raise that to $20 an hour by 2021.
But we also have to support business to pay those wages.
I think if you look at the direct stuff we have done through the Families Package, and the work we are doing to help stimulate regional economies, I’m hopeful those average wage increases should be being felt in years to come.
But immediately, the package comes into force on July 1.
BW: What advice can you give Wairarapa residents to help improve their living standards?
GR: When we are deciding what the government is spending resources on, we are going to make those decisions with overall health and well-being in mind.
It’s quite easy to get fixated on a certain rate of economic growth, but for us that is not success.
It’s what you do with that economic growth, and making sure everyone in society benefits from it.
And I think that’s what has been missing over the past decade.
People in Wairarapa will see the benefit of that because our priorities will be different.
Our priorities are about making sure that housing and health and education are funded properly, and they will see the benefit of that.