• 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
• TRADE
• EDUCATION
• KIWI INNOVATION

During the last year our economy has been affected by the Asian recession and a serious drought.

Growth has slowed, unemployment may increase for a time, and there is a real risk that we will record a fiscal deficit during the next couple of years.

In the last week Moody's have reduced our credit rating to level with Australia and Canada.

The best response to this kind of economic shock is to anticipate it years in advance, with economic policies that allow business to cope with change. That is what the National Government has done throughout this decade. We reduced debt. We reformed the labour market. We sold the railways and the forests. We cut tax rates.

This year the Coalition Government maintained progress on tariffs, ACC reform, airport sales and made $600 million fiscal savings.

These steps have helped, but it is clear there is now need for further progress if we are to see strong economic recovery, more jobs and an ability to remain in surplus.

In the last few weeks we have worked with our caucus and others supporting the National minority government to develop a set of Policies for Progress. I appreciate the help and co-operation that has been demonstrated by all independents, the United and Act Parties and my own caucus colleagues.

These policies set a number of major goals:

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

We have developed a series of measures - our Policies for Progress. Some of these I am announcing today, and later this afternoon the Leader of the House will move that we go into urgency to complete some bills connected to these policies.

We must make rapid progress to show that Parliament can act when necessary. It is only by firm and resolute action that this Parliament can demonstrate that it has the political will and policy wit that New Zealand needs.

Mr Speaker, everyone in this house knows the present arrangements for New Zealand Superannuation are unsustainable in the medium term. However, the Accord process has failed to make any progress in the last year. It is time for a decisive move to establish a new consensus.

This Government will set up a Superannuation 2000 Taskforce, to design a sustainable and fair superannuation regime over the next two years. We will invite all parliamentary parties to nominate representatives to work with independent members and an independent chair.

But urgent action is needed. Next year the cost of Superannuation is set to rise as pension rates accelerate in line with wages. This is not sustainable. That is why we will move to reduce the floor on pension rates from 65% of the net average wage, to 60% from 1 April 1999. This does not cut anybody's pension; their purchasing power will be maintained.

The second area is asset sales. We need more private investment in the electricity generation industry and we need to cut debt. Accordingly, the Government is moving to scope Contact Energy for possible sale, and we will move the necessary legislation to permit sale.

The third area is tariffs. The Manufacturers' Federation and the Government have agreed on a phase out of tariffs so that by 2006 New Zealand will have zero tariffs on all items. We will introduce legislation to define the timetable for tariff reductions.

In addition to these urgent economic matters there will be a series of social policies which will be announced over the next six weeks. These will include announcements on education and housing.

We will also be announcing a series of measures in immigration, tourism, investment and trade, which will improve the ability of our businesses to operate on the world scene.

We are not changing the policy on free health care for under-6s. This policy was always intended to be reviewed later this year. No change will be considered until that review is complete.