Lessons From The Australian Budget

Wednesday, 23 May 2001, 4:13 pm
Press Release: Business New Zealand

The Australian Budget released yesterday holds several lessons for New Zealand, says Business NZ.

Business NZ Chief Executive Simon Carlaw says Australia's decision to reduce the company tax rate to 30% makes New Zealand businesses less competitive than Australian ones.

"The importance of this differential between New Zealand and Australia cannot be overestimated," Mr Carlaw said.

"Australia is suddenly a more desirable place to do business, and New Zealand is suddenly less desirable, in terms of attracting and retaining enterprise.

"Another difference between our countries that has been highlighted in the Australian Budget is in two key indicators - the ratio of government expenditure to GDP, and the ratio of government debt to GDP.

"While Australia's government expenditure equates to 22% of GDP, ours is 34%. And while Australia's government debt equates to 7% of GDP, ours is 20%.

"These trends, if continued, will make Australia even more competitive, and New Zealand even less competitive."

Ends

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