Business is not totally left out of the Wellbeing Budget
30 May 2019
The Wellbeing Budget was never going to be primarily about business, but businesses were not totally left out, said Peter Vial New Zealand Country Head of Chartered Accountants Australia and New Zealand.
“Ultimately employers will benefit from the Government’s broader wellbeing initiatives directed at improving health and wellbeing outcomes and lifting people out of poverty,” he said.
“Those most in need are the big winners and nobody is quibbling about that. It is no surprise that this Budget is full of initiatives, policies and spending on mental health, child poverty reduction and lifting outcomes for Maori and Pasifika.”
Vial said if all those initiatives and policies deliver on the promises, “the long-term benefits for the country and businesses will be significant, and so they should be given the size of the spending.”
How does the Budget address the needs and concerns of businesses? How does it anticipate the Government partnering with business to improve productivity, to facilitate access to capital, to be more innovative and to grow exports?
“The most important question for business is about the economic fundamentals,” Vial said. “They look to be in reasonable shape despite global headwinds.”
Mental health and the workforce
“Healthier and happier workforces and safer workplaces are good for business.”
The Government cites mental illness as costing the economy $12 billion (5% of GDP) in 2014. “Currently employers bear much of the upfront and ongoing costs of supporting their staff through mental health, addiction, domestic violence and other societal problems often linked to poverty.
“Better resources, more investment and wrap around services will alleviate some but not all of the costs borne by employers.
“However, the Government needs to keep its eye on the costs faced by businesses here and provide support,” Vial said.
“Across the country businesses are concerned about shortages of skilled staff and productivity. There is some support in the Budget for apprenticeships: a $50 million boost for the Mana in Mahi programme to expand its reach from 150 to 2,000 participants.
“The underspend on the first year tertiary Fees Free programme is redirected to implementing changes to vocational training to address the shortage of tradespeople. Higher quality, better coordinated and more effective vocational training is good for business.”
Vial said, “The details here are scant, but it is good to see the Government emphasising the need for it to work with industry groups and businesses to achieve better vocational outcomes.”
“Businesses – and communities too – need this Government to up the ante on infrastructure investment.” The Budget includes a $1 billion boost in funding for KiwiRail for new trains, improved tracks and ultimately new Inter-islander ferries, plus money to complete Auckland’s City Rail Link.
“However, there is need for more investment.”
The Budget includes a new $300 million venture capital fund. “The funding is intended to take start-up businesses “to the next level”. Will it fill the “capital gap”? It’s a start.”
Specific measures to support exporters are not immediately obvious.
Innovation investment is largely in initiatives (a $106 million spend) to support transition to a low carbon future. Most Kiwis support this direction of travel, but businesses would have liked more support for investment in innovation more generally.