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Business Update

Business Update

HIGHER PRIORITIES THAN COMPANY TAX The Finance Minister has ruled out Labour going along with Jim Anderton's call for lower company tax, saying: "There are higher priorities." Business was surprised by Mr Anderton's call, but fully supports the proposal, which would allow companies to reinvest to achieve higher productivity and more economic growth, to the benefit of all New Zealanders. It would begin to make us more competitive with Australia and all other trading competitors. Having a senior member of the Government acknowledge that NZ's company tax rate is one of the highest in the Asia-Pacific region is a good start, said Business NZ CEO Phil O'Reilly.

BETTER STATS NEEDED Employers and employees deserve better statistics on workplace injury and illness. A report released this week by the National Occupational Health and Safety Advisory Committee showed the lack of NZ data. The Committee's report itself is largely based on overseas data and much is 'estimates based on estimates'. Employee health and safety should be based on something better than guesses, and employers shouldn't be held to account for health and safety outcomes measured by guesswork, no matter how informed. It's important that the Labour Department's OSH service works as effectively as possible with employers, employees and unions to gather better information to minimise risk of harm.

YOUNG SUPPORT BUSINESS Last year NZ Trade & Enterprise ran a survey on attitudes to business that showed adult New Zealanders as being indifferent or even negative to business. This year NZTE has followed up with a survey of young people that reveals a different picture. Those surveyed (500 respondents aged 15-21) showed strong support for business, said they appreciated businesspeople taking risks to create jobs, and showed more interest in running their own business than the "more wary and disinterested adult New Zealanders" of the 2003 survey. A significant minority (22%) of the young group felt media portrayal of business was negative.

CLEAN SLATE COMING The Clean Slate Act comes into force at the end of this month. Those who've committed minor offences more than 7 years ago can apply to the Ministry of Justice to ensure those details have been wiped from their record. Employer requests for information on past offending will have to be authorised by the employee or prospective employee. More information is on www.justice.govt.nz

PAID PARENTAL LEAVE EXTENDED The paid parental leave scheme has been extended. For babies due or born or adopted from 1 Dec: - paid leave increases from 12 to 13 weeks, and to 14 weeks by 1 December 2005 - mothers will get paid parental leave if they have worked for the same employer for 10 or more hours a week for the last six months (instead of 12 months) - partners can get one week's unpaid leave if they've worked for the same employer for 10 hours or more a week for the last six months Eligible women can get up to $346.63 gross per week. Criteria for unpaid leave up to 52 weeks are still the same. The next step for the government will be to extend paid parental leave to self-employed women, Associate Labour Minister Ruth Dyson said. More info is on www.ers.dol.govt.nz

STATUTORY MINIMUM WAGE INCREASING Over the last four years the adult minimum wage has increased 28.6% and the youth rate has increased 71.4%, with the threshold for getting the adult minimum wage rate dropping 20 to 18 years, and the youth rate now available for many in formal training. The problem with these increases is that if you make the minimum wage close to wage levels for skilled workers, then an employer will more often choose the more skilled worker. Business NZ's submission on the annual review of the minimum wage points out that for this reason, ongoing increases in the minimum wage could harm the people it's meant to help, making it harder for them to break into the employment market.

EMPLOYERS LEVY UNLIKELY TO RISE ACC has recommended an unchanged employers' levy and increases in the self-employed average levy ($3.19 to $3.22), the motor vehicle account and the petrol levy average for 2005/06. ACC recommends that the workplace safety initiative for small employers and the self-employed (10% discount if certain steps met) should proceed. The ACC Minister will release a decision next month.

DO THE SURVEY FOR IRD Please send your compliance questionnaire back to the IRD! Of the 5,600 small businesses who were sent the survey, around a third have responded - more are needed to take part. The survey asks about the amount of time and money spent on tax compliance and results will be used to help cut compliance costs. The survey closes on 19 Nov. Confidentiality is guaranteed - Inland Revenue will not know who responded. Anyone wanting to take part should call IRD on 0800 833 445.

GROWTH STATS

SECOND LARGEST TRADE DEFICIT ON RECORD

The provisional value of imports for Sept 2004 was $3,170m, up 7.3% (or $216m) from Sept 2003. The trend for the value of imports has risen 10.5% since June 2003.

The provisional value of exports for Sept 2004 was $2,158m, down 1.9% on Sept 2003, giving a deficit of $1,012m - equating to 46.9% of exports. A deficit is typical for a September month, but the Sept 2004 result was nearly three times larger than the average deficit as a percentage of exports for the past 10 September months.

The main contributors to September's lower value of exports, compared with Sept 2003, were milk powder, butter, crude oil, and casein and caseinates, partly offset by higher export values for kiwifruit and hot rolled steel coils.

Belgium (-56.9%) and China (-16%) were the two main export destinations contributing to a fall in exports when compared with Sept 2003, however higher export values were recorded to South Korea (+37.4%).

Imports increased for 17 out of the top 25 countries NZ receives merchandise from, when comparing Sept 2003 with 2004. Australia (ranked 1st in terms of import value for Sept) increased 13.7%, while the US (ranked 2nd) had a minor increase (+0.6%). China continued to record strong export growth to NZ (+10.9%).

During the Sept 2004 year, the value of merchandise imports was $34,135m, 6.9% ($2,191m) higher than for the Sept 2003 year. With the value of exports at $30,052m, the annual trade deficit stands at $4,083 million, or 13.6% of exports.

BUILDING CONSENTS CONTINUE TO SLIDE

There were 2,291 building consents issued in Sept, compared with 3,003 in Sept 2003 and 2,420 in Sept 2002. Consents for new dwelling units (excluding new apartmentswere 1,996 for Sept 2004 - lower than the 2,356 recorded for Sept 2003.

Over the Sept 2004 year consents for 31,464 new dwelling units were issued - the highest total for a Sept year since 1974. Despite these strong figures, the trend for new dwelling units has been declining since the beginning of the year, after steady increases since April 2003.

There were increases in new dwelling units from Sept 2003 to Sept 2004 in half of the 16 regions, but there was a decrease of 633 units in the Auckland region.

Non-residential building consents in Sept 2004 were worth $366m, compared with $258m in Sept 2003 and $279m in Sept 2002. Shops, restaurants & taverns led the value stakes in Sept ($78m), followed by office & administration buildings ($56m) and factories & industrial buildings ($49m). Over Sept 2004 year, the total value of factories & industrial building consents was $464.5m, compared with $336.5m in the previous year. For 18 of the last 20 months the value trend for non-residential buildings has increased, with continuous growth since Dec 2003.

WHAT'S NEW on http://www.businessnz.org.nz * Workers and employers deserve better * Lower company tax would benefit every New Zealander * Submission on work-based saving * Minimum wage annual review submission * Holidays Amendment Act summary

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