The 2011 Budget

First listen to news about previous budgets:
What is the Budget, May 19 2010 and The Budget, May 28 2009.

The Minister of Finance, Bill English, read the Budget today in Parliament. Just like the last few years, there were not many surprises. We already knew that the government would cut some money to families who receive extra funding from Working for Families. We knew that the government planned to sell a part of state-owned energy companies and Air New Zealand although it will still keep more than a 50% share. Listen to Jan 30 2011 for more about this.

We also knew that the government would cut some of the funding of Kiwi Saver although it will still put $1000 into the fund for any new workers joining Kiwi Saver. Workers and their employers now have to pay 3% instead of 2% of the worker’s wages into the savings fund.

We knew too that the government would need money for the Earthquake Recovery in Christchurch. Some of the money from selling shares in state-owned companies will go to Christchurch.

There will be more money for Health, for schools and early childhood education, for job training for young people, for fast broadband and for Kiwi Rail.

Mostly, though, the government needs to cut spending because of the large debt. It has to borrow $380m a week but that will drop to $100m next year and by 2014, the government plans to start to repay the debt.

Questions
1. Why does the government have to reduce debt?
2. About 1.7 million workers have joined Kiwi Saver. Why has it been so popular?
3. Do you think the government should sell shares in state-owned companies?