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Competitiveness warning siren goes off

Competitiveness warning siren goes off

The responsibility for the ongoing slide in New Zealand's competitiveness can be laid largely at Government's door, the Employers & Manufacturers Association (Northern) says.

"We're going backwards while Australia pulls farther ahead," said

Alasdair Thompson, EMA's chief executive, commenting on the 2004 IMD World Competitiveness ladder.

The index placed New Zealand two rungs lower this year at 18th; Australia went from 7th last year to 4th in 2004.

"Government policies and slow response times are undermining our business environment," Mr Thompson said.

"Any attempts made to offset rising business costs are inadequate.

"New compliance costs are mounting while old compliance obstacles, such those with the Resource Management Act, are not being dealt with.

"Government is also proving very slow to address our infrastructure failings in transport and energy supply.

"We're failing to invest in new productive capacity but the Government seems immune to suggestions that it review the situation. Our manufacturing base needs to diversify further from the present reliance on certain foods and beverages, and housing materials and their furnishings.

"Our call to lower the headline company tax rate to attract investment has fallen on a pre-determined set of responses designed to avoid the issue. Overseas investors use the headline company tax rate to identify attractive regimes; we fail to get past base one.

"Some of the extra compliance costs and paper work introduced lately are:

* Health & Safety in Employment Amendment Act

* Higher power prices in the absence of a genuine electricity market

* Increases in petrol tax

* Increased ACC costs

* New regulations and costs covering hazardous substances

* Holidays Act

* New therapeutic goods regime

* New border security charges

* The Employment Relations Law Reform Bill about to confuse everybody further.

"The Government needs to accelerate its action to unblock our potential for business growth; otherwise our education, health and environment standards will start to slide backwards too."

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