Budget 2007 – too little, and maybe too late
Canterbury Manufacturers’ Association
17 May 2007
Budget 2007 – not enough fight it, too little, and maybe too late
The Canterbury Manufacturers’ Association says while today’s Budget statement offered something for manufacturers and exporters; it remains a case of doing less than our competitors and we have to fight harder to keep activity in New Zealand.
“Today’s statement is a step in the right direction”, says Chief Executive John Walley. “R&D, headline tax, export development and the development of skills and training are all things that need, and will continue to demand attention and Dr. Cullen has acknowledged these. Efforts to support savings are generally positive, as is the increased focus on profits being characterised as capital gains. Such measures will help reduce inflationary pressure, but unless we learn to control inflation without driving the currency through the roof, none of this will matter”.
“We need to remember that the adverse impact of the currency movements over the past year amounted to around $5bNZ, compared to the innovation elements of the budget, worth $3.4b over four years. So perspective matters, really matters, when the numbers are so big”.
“Inter jurisdiction competition for productive activity is real and increasing. Earlier this year, Australia and the UK increased R&D deductions to 175% - they clearly want and value industry more than New Zealand does”.
“While this Budget is a step in the right direction, more needs to be done to support our tradable sector and find better mechanisms to control domestic inflation, because if we fail to keep industry in New Zealand, we screw people’s lives around as firms up and leave, and worse, we condemn our children to an impoverished future”.