Budget 2018 announced revealed that the country’s books are in good order and the Government intends to maintain surpluses over the coming parliamentary term.
In his first budget, Finance Minister, Grant Robertson, predicted continuing growth of 3.0 per cent, along with a surplus of $3.1 billion for this financial year.
“We are pleased to see a balanced budget being announced off the back of the strong economic fundamentals supporting the New Zealand economy. And naturally, we would expect a Labour-led Government to look to redistribute wealth as was announced in the social housing and health allocations in this budget,” says Kim Campbell, CEO, EMA.
“From a business perspective, many of the big announcements have already been made, such as the tax incentives for research and development, the $28 billion transport package for Auckland over 10 years along with increases to the minimum wage, pay equity settlements and so forth.
“We note that $24 billion more expenditure is planned over the next four years as part of this announcement.
“However, the big question from this budget is how will this drive productivity?” says Mr Campbell.
“The Government’s ability to deliver strong results does come off the back of rising corporate profits and subsequent tax take. If business confidence starts to turn, or we see a hunker down mentality where plans for growth and investment are shelved, where will this leave us? ,” he says.
“For example, how resilient are we if another global financial crisis or natural disaster hits our economy?
“Also, one of the biggest issues on the mind of business is how the proposed changes to industrial relations will impact their operations. No one would disagree with wanting to build a more productive, more sustainable and more inclusive economy, but we are deeply concerned with how the various changes proposed for the workplace will enable this,” says Mr Campbell.
Mr Campbell added that business would be wanting further clarity on the plan to introduce a legally binding emissions reduction target.