Debt, education focus of New Zealand PM's state of nation speech

The New Zealand government will stay focused on paying down debt as the national economy continues its forecast growth, Prime Minister John Key said in his annual state of the nation speech Thursday.

However, facing a general election sometime before the end of November, Key also unveiled a major new investment in education and promised other programs in the near future.

"The economy will grow strongly this year.Our economic growth is forecast to be one of the highest in the developed world in 2014," Key said in the published speech to the West Auckland Business Club.

"The government will produce a budget surplus next year, when most other countries will still be in deficit and building up debt, " he said.

"The government will get back to running surpluses next year. At first they will be very small but they will build up over time. There might be some room for modest spending or revenue initiatives, but the top priority has to be getting our debt down. "

The government had borrowed around 50 billion NZ dollars (41.41 billion U.S. dollars) over six years to get the country safely through the greatest financial crisis since the 1930s, and one of the most expensive natural disasters in history, he said referring to the Global Financial Crisis and the Christchurch earthquake in February 2011.

Key also announced the government would invest 359 million NZ dollars (297.45 million U.S. dollars) over four years to improve education in the country's schools.

"New Zealand stands out among other countries for the wide gap we have between our top students and our lowest-performing students," he said.

"International studies also show that we are not keeping pace with achievement in other countries, particularly in maths and science. In fact, we have been on a gradual downward slide since the early 2000s."

Opposition parties criticized the education announcement, saying it failed to recognize the real problem in education, which was growing economic inequality.

"The Prime Minister omitted to mention that there are 150,000 people unemployed, not to mention the scores more that are underemployed throughout the country," leader of the opposition New Zealand First Party Winston Peters said in a statement.

"He also failed to talk about the lack of action over the net 150 billion NZ dollars (124.26 billion U.S. dollars) of overseas debt that New Zealand has."

Peters is widely expected to play a "king-maker" role in deciding a coalition government after the election, which pollsters say is too close to call.