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Finance Sector Mixed Views on Govt Tax Package

For immediate release - 6 June 2007

Finance Sector Holds Mixed Views on the Government's Tax Package

NEW OPINION POLL RELEASED

Senior finance industry representatives have questioned whether NZ's Budget 2007, and particularly the reduction in company tax, will boost innovation and productivity. That’s according to industry opinion polling released today by Finsia – the Financial Services Institute of Australasia – which represents 20,000 finance industry members in New Zealand and Australia.

The launch of the polling, conducted by Roy Morgan Research*, coincided with Finsia’s ‘Government Speaks’ event in Auckland today. The theme was ‘a Post-Budget Analysis – a health check-up for NZ’$ economy’. Releasing the Finsia/Roy Morgan Industry Poll findings, Finsia’s CEO, Mr Brian Salter said the finance sector has raised concerns about the Government’s business tax package.

“While Finsia supports Budget policies that create a stronger and more productive economy in New Zealand and policies, such as KiwiSaver, which deepen the ‘capital base’, Government needs to consider the concerns of the finance sector towards the business tax package. At the end of the day, the package is crucial for ensuring long-term economic growth and therefore financial security for New Zealanders,” Mr Salter said.

Key findings of Finsia’s ‘Have Your Say’Industry Opinion Poll:

- Overall Budget snapshot: 53% believe it will raise household savings, 49% believe it will create a more secure retirement for Kiwis and 44% believe it will address the future costs of an ageing population. 62% believe it won’t significantly boost business productivity and 54% believe it doesn’t address long-term challenges responsibly.

- Reduction in company tax: The majority (66%) believe that to little or no extent the Budget will provide sufficient incentives for NZ businesses to increase innovation. 62% believe it will increase productivity to little or no extent.

- KiwiSaver scheme: the majority (57%) believe that more incentives are needed to be built into KiwiSaver to meet the aim of improving the New Zealand saving rate and provide capital for future investment.

- Macroeconomic imbalances: the majority (55%) endorse the Government’s forecast that growth will pick up by 2010.

Finsia’s ‘Government Speaks’ event, proudly sponsored by New Zealand law firm Buddle Findlay, a long-time supporter of Finsia, featured keynote addresses by the Hon Phil Goff MP, Associate Minister of Finance, the Hon Bill English MP, Deputy Leader National Party and Finance Spokesperson and Mr Tony Alexander, Chief Economist Bank of New Zealand. Mr Michael Dineen, a senior partner in Buddle Findlay’s national banking and finance team, said, "Buddle Findlay is pleased to support an event which will not only deliver an in-depth analysis of the Budget, but which also will reveal how the financial services industry is responding to it. Their views will be a strong indication of how this Budget is likely to affect New Zealand's economy”.

“Finsia thanks Buddle Findlay for its support and looks forward to continuing dialogue with key stakeholders on major regulatory, policy and legislative issues affecting NZ’s financial services sector”, Mr Salter said.

ENDS

*For copies of Finsia’s Opinion Poll visit: http://www.finsia.ac.nz/About/Media_Room

*The research was conducted online between 25 and 30 May 2007. The sample size was 61 respondents from within Finsia’s NZ membership.

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