Solid progress in 2014 Budget

Solid progress in 2014 Budget

The Government’s measured approach to economic management is achieving solid progress, says BusinessNZ.

BusinessNZ Chief Executive Phil O’Reilly says the Budget’s accounts and forecasts show key objectives for the economy are being delivered.

“Returning to surplus this year only a short time after the global financial crisis and Christchurch earthquakes is a sound achievement.

“The Government has avoided an election year spend-up, focusing instead on the long game of returning the country to economic health.

“Business wants an environment where government spending is both restrained and appropriately targeted and where policies support competitive New Zealand enterprises. This Budget helps towards delivering those outcomes.

“The reduction in core government spending from 35 percent of GDP in 2010 to 31 percent this year is welcome and will help pave the way for possible future tax cuts.

“The forecast of an average GDP growth rate of 2.8 percent and a 12 percent increase in average wages over the next four years also represents good progress.

“Policies helping people move from welfare to work are bearing fruit and have the support of the business community.”

Mr O’Reilly said despite the improving financial situation, there were still issues remaining in the too hard basket, including costs associated with interest-free student loans, Working for Families, NZ Superannuation and the expanding health budget.

“While the Government’s steady, gradualist approach is delivering good economic outcomes, there is still a risk of being left behind other countries pursuing more ambitious reform.

“Business would like to see signposts towards a reform programme including spending and tax reduction and further policies for productivity and competitiveness, to ensure our current growth story can be maintained long into the future.”

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