Media release from finance minister Bill English

The Government is addressing a number of policy challenges highlighted in the Organisation for Economic Co-operation and Development's annual economic survey of New Zealand, Finance Minister Bill English said today.

The OECD has set out several recommendations, including the importance of refocusing policy, tax and regulations on economic growth. It also highlighted the importance of public sector efficiency.

"We acknowledge that even before the severity of the global downturn became apparent, there was pressure on New Zealand's economic policy settings," Mr English said.

"In particular, the private sector's reliance on the external funding and government financial sector guarantees have increased the importance of a strong public sector balance sheet.

"Falling revenue has created a period of projected government deficits and rising Crown debt to levels that are unacceptable to the Government.

"The Budget on May 28 will set out a credible plan for recovery and a sharper focus on improving productivity and economic growth."

The OECD also sets out some options for meeting future challenges in the health system, including the smarter purchasing and delivery of health care services.

"We note the challenges the OECD has described in the health sector. We're already implementing some of the ideas and we will consider others," Mr English said.