Bill English

Wellington, Jan 30 NZPA - The Government will clear the way for fast and opportune infrastructure and service spending with a view to clearing debt at the end of the recession, Finance Minister Bill English says.

That debt, as a percentage of GDP, could increase by more than a third within the next few years, Mr English said.

He said the National Party would roll out announcements over the next couple of months in response to tough economic times, and unclogging a slow bureaucratic system was part of the plan.

"We have a government system that is not used to being decisive, it is not used to acting quickly, it is used to wandering around pursuing conflicting objectives under fairly manipulative political control," he told Radio New Zealand today.

The system was going to have to be "dragged up by the scruff of the neck", to be able to deliver on opportunities to invest in infrastructure and services.

He said the first "comprehensive" reform of the Resource Management Act in 20 years was due to be introduced within the next month.

"All designed to allow us to make decisions more quickly about whether to do projects -- or not to do them."

Mr English said local government was starting to suffer from the recession and there were plans to forge closer ties between central and local government.

Councils were suffering from dropping revenues and investment income, as well as seeing a drying up of development levies because of a stalled property market.

"They may end up cancelling capital projects, which with a bit of assistance from Government over debt raising and so on, could actually go ahead."

While spending would continue, Mr English said the result would be a significant amount of debt to be cleared when the economy picked up.

Mr English said forecasts predicted Government debt would increase from slightly over 20 percent of GDP to over 30 percent within the next four to five years.

That equated to upwards of $17 billion in extra debt.

He said if public services such as health and education were to be maintained in an environment of dropping tax revenue, large borrowing was needed.

"We are doing that because we are confident that this is an economy that can in the future produce the growth which will enable us to repay debt."

Announcements likely to assist the business community would be made next week, followed by the release of infrastructure plans and the staging of a jobs summit next month.

NZPA PAR co kn