© The Treasury

2009 Job SummitJohn Whitehead, Secretary to the Treasury

© The Treasury

Objectives

• To get out of recession as quickly as possible

• To limit the impact on people

• For New Zealand to be better off long-term and well placed to take advantage of world recovery

2

© The Treasury

Growth in GDP per capita 2001-2006

Productivity growth

3

0

1

2

3

4

Cze

ch R

ep

ub

lic

Po

lan

d

Ice

lan

d

Ire

lan

d

Fin

lan

d

Un

ited

Kin

gd

om

Un

ited

Sta

tes

Jap

an

OE

CD

Fra

nce

Be

lgiu

m

Au

stria

Au

stra

lia

Ca

na

da

Sw

itze

rlan

d

Ne

w Z

ea

lan

d

Po

rtu

ga

l

Me

xico

Ita

ly

© The Treasury

Regulation

4

2007

0 1 2 3

United Kingdom

United States

Canada

New Zealand

Australia

Denmark

Ireland

Netherlands

Iceland

Norway

Sweden

Germany

Finland

Belgium

Japan

Austria

Portugal

Hungary

Korea

Mexico

Switzerland

0 0.5 1 1.5 2

United States

United Kingdom

Canada

Iceland

Netherlands

Denmark

Spain

Japan

Norway

Finland

Australia

New Zealand

Switzerland

Sweden

Germany

Italy

Austria

Hungary

Belgium

France

Korea

1998

4th

12th

© The Treasury

No Qualification

20%

School Qualification

23%

Post School Qualification 57%

Employed

Workforce - Education

5

Unemployed

No Qualification

23%

School Qualification 29%

Post School Qualification

38%

© The Treasury

Workforce - Ethnicity

6

Unemployed

Pakeha 55%

Maori 19%

Other 18%

Pacific 8%

Pakeha 75%

Maori 10%

Employed

Pacific 4%Other 11%

© The Treasury

Operating Balance

7

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

93/94 95/96 97/98 99/00 01/02 03/04 05/06 07/08 09/10 11/12 13/14 15/16 17/18 19/20 21/22

% GDP

Fiscal Year

HistoricalYears

ForecastYears

ProjectedYears

OBEGAL to GDP

© The Treasury

Debt

8

0%

10%

20%

30%

40%

50%

60%

70%

80%

93/94 95/96 97/98 99/00 01/02 03/04 05/06 07/08 09/10 11/12 13/14 15/16 17/18 19/20 21/22

Fiscal Year

% GDP

HistoricalYears

ForecastYears

ProjectedYears

GSID to GDP

© The Treasury

Demographics

9

0.0

0.1

0.2

0.3

0.4

0.5

0.6

1880 1900 1920 1940 1960 1980 2000 2020 2040 2060 2080 2100

Older (65+)Projection

Ra

tio t

o p

op

ula

tion

ag

ed

15

-64

Source: Statistics New Zealand

2009

Ratio of those aged 65+ to 15-64

© The Treasury

Spending changes – 2008 to 2050

10

GDP %

2008

2050

0

2

4

6

8

10

12

14

16

NZ Super Health Finance costs

Source: New Zealand long-term fiscal model

© The Treasury

The way forward

11

Do prepare for the future – skills and innovation

Do protect the vulnerable – not the status quo

Don’t pass on a burden of debt

© The Treasury

2009 Job SummitJohn Whitehead, Secretary to the Treasury