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Less Dollars and More Sense Good for New Zealand

Less Dollars and More Sense Good for New Zealand

Statement Made by Jan Dawson Chief Executive, KPMG

The tax initiatives announced today are the most wide reaching in the last 20 years and the National Government has taken a smart but bold approach to bringing in the changes in those areas where the Government believes that they can build the recovery of the New Zealand economy.

Today’s budget announcement, we agree, represents a once in a generation opportunity because of fiscal circumstances and public opinion, to achieve a major shift in the New Zealand tax system.

It is pleasing to see the Government was guided by the direction set by the Tax Working Group and public opinion on a range of issues.

Business should view this as a positive package. The property sector will understandably not welcome some aspects of this budget but overall business will benefit from the surprise early adoption of a reduction to the company tax rate and this will go someway to balance the effects of the changes.

The story of the Budget 2010 for the state sector is that fiscal pressures cannot be ignored or wished away. What is ineffective and inefficient is now unaffordable. The new reality for the state sector is that continuous improvement and enduring change is the new ‘business as usual’. It is good to see state sector stepping up to play its part as evidenced by the significant reduction in requests for new money and the ongoing focus on value for money. The last two Budgets have seen around $4 billion in savings through re-prioritisation.

Overall, we are positive that the Government’s package is sending the right signals for the economy, for business and for workers. It is taking steps towards encouraging work and savings, focusing spending on targeted areas like R&D, and ensuring that the state sector is efficient.

Plotting a new course for growth is good for New Zealand; however the global economy remains a concern as we are still susceptible to any future shocks.

Just as Government is plotting a new course, the time is right for business to look forward, re-calibrate and set a new direction also.


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