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Budget 2014: Key announces new skills spending but signals modest spending increases

The government is upping its apprenticeship programme. 

Prime Minister John Key today announced next week's Budget will include an extra $20 million for another 6000 apprenticeship places.  

This adds to the existing 'Apprenticeship Reboot'  programme which has 14,000 places and which began in January last year.  The scheme pays a subsidy of $1000 toward the cost of tools or off-job course costs, or $2000 for those in priority trades. Employers also get an equal amount. 

Mr Key also announced a move to encourage beneficiaries to shift to Christchurch, because that region has the lowest unemployment in the country and a growing skills shortage as the reconstruction effort gets under way. 

Dubbed '$3K for Christchurch', it provides a $3000 for beneficiaries to move to that city if there is a confirmed job for them there. 

"Outside Canterbury, there are currently around 19,000 beneficiaries required to be available for part-time or full time work in the 18 to 24 age bracket alone," Mr Key told a Business New Zealand lunch in Wellington. 

The $3000 will not be taxable but it could be recoverable in the event of misconduct leading to dismissal or some similar breach.

More broadly, Mr Key said next week's budget will not include much in the way of new expenditure. 

"This government won’t be losing sight of the need to maintain a tight watch on spending. We don’t want to once more see the negative impact of a long period of excessive government spending and debt-fuelled consumption.

"We acknowledge that everyone’s situation is different and some people are finding things challenging. But the benefits of a sustainably growing economy are there to see."

The average fulltime wage has risen 5.8% over the past two years while inflation is up 2.8%, he says 

"We have the opportunity now to lock in the benefits of a growing economy for households and businesses up and down New Zealand."

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