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CPA Australia rates Budget as positive overall

17 May, 2007

CPA Australia rates Budget as positive overall for business but doubts its ability to attract and retain talent in New Zealand

The New Zealand branch of CPA Australia, the pre-eminent body representing the diverse interests of more than 112,000 finance, accounting and business professionals working in the public sector, public practice, industry and commerce, academic and the not-for-profit sector throughout Australasia and the world brought together their top specialists in New Zealand to analyse and comment on Budget 2007 today, Thursday 17 May.

The team hoped for a budget that would make New Zealand internationally competitive for business, and make the country a better place to live, work, save and invest.

Chye Heng, New Zealand branch council president and CPA Australia fellow applauds the increased Kiwisaver initiatives and the long term effect of investment in capital markets and a move away from reliance on property investment. “Overall CPA Australia is encouraged by the enhanced Kiwisaver initiatives and superannuation fund concessions which will encourage savings. This is definitely a step in the right direction and must be a great thing in the long term.”

The reduction in the company income tax rate was viewed very favourably, even when weighed up against the increased cost of Kiwisaver contribution and compliance, particularly for small business. “We are delighted that the company income rate has come down to match Australia. This finally makes us internationally competitive in line with our nearest ‘rival’,” Heng mused.

Other productivity gains will occur as a result of the research and development tax credits and the international tax reforms. Heng is encouraged at moves to reward businesses who innovate saying, “If a company has a great idea and develops its own software to enhance overseas hardware, which is the Kiwi way, finally they will be rewarded. This incentive combined with the market development scheme for exporters should ensure our innovative thinking is not only kept onshore, but the end product is taken to the world. These measures will not only encourage business to come to New Zealand, but will encourage business to stay in New Zealand. This has to be enormously beneficial in the long term.”

CPA Australia members were also encouraged by the focus and commitment to infrastructure development especially in Auckland, which they say is long overdue, with current infrastructure have proven itself inadequate many years ago. Heng, however, remains cautious saying, “While not a done deal we are pleased that the need has been recognised and a commitment to get our largest city moving has been acknowledged.”

Heng’s review of Michael Cullen’s eighth offering falls short of outright praise as he continues, “While CPA Australia appreciates the need for a non inflationary budget which, obviously, personal tax cuts would have led to, we are nevertheless disappointed. A lower tax rate would have helped New Zealand attract and retain the best and brightest talent to our shores.”

He is also wary of the number of tax rates now on offer, remarking, “I find the complexity of the tax rates across entities quite absurd. Surely the Minister could have surprised us with a single low rate.”

When asked if he found anything else positive to observe about the Budget 07 broadcast he smiles wryly. “Oh yes, Michael Cullen’s budget was John Key’s finest hour.”

Analysing the budget were:

- Chye Heng, CPA Australia New Zealand Branch President and CFO Executive Director and Head of Legal, Beca Group, and other members of the New Zealand branch council including:
- Craig Richardson, CFO Coca-Cola Amatil New Zealand and Fiji
- David Searle, Partner Audit and Assurance Services, Staples Rodway
- Craig Anderson, General Manager Corporate and Specialist Risks, QBE Insurance International.

- END -

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