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The Mapp Report: Bondi or Bust?

The Mapp Report
19 May 2006

Bondi or Bust?

A $8.9 billion surplus, but not a cracker for hard working New Zealanders. As Don Brash said, it is a Bondi budget; a budget that will push even more New Zealanders to Australia in search of lower taxes. Because lower taxes mean greater opportunity and a more dynamic economy.

There are already 700 people leaving New Zealand for Australia every week; that’s 35,000 per year. That number could now easily accelerate. The government said they only expect 1% growth this year. In Australia the growth rate is going to be 3% this year.

That is the real challenge facing New Zealand. The government talks about economic transformation. Business New Zealand said it was merely incrementalism, and they were being careful with their words. In truth, the budget did virtually nothing for transformation – a few dollars here and there. But where was a major reduction in company taxes – at least to the same as Australia which is 30%?

If National had won the election, its first budget would have been totally focused on the measures needed to make New Zealand’s economy more competitive and productive.

National would have built the right incentives into the economy through affordable tax cuts that would allow hard-working Kiwis to get ahead under their own effort. Our Budget would have seen 85% of taxpayers pay 19% tax or less. Only 3% of taxpayers would have paid the top rate.

Transformation also means fixing up infrastructure. In Auckland that means transport. The budget provided enough money to get Transit’s 2005 package back on track – but that means State Highway 20 (the Western Motorway) will still not be built until 2015. That is nine years from now – nine years to build six kilometres of road to Waterview. In Australia it would take about three years to do the job.

Sydney had the Olympics in 2000. They made sure they got the infrastructure right. A motorway right from the centre of the city out to the airport, motorways out to the west, extra investment in rail and ferries.

Auckland has the Rugby World Cup in 2011. Surely we want to get the major transport projects finished by then? Sure, it requires some swift action, but Auckland desperately needs it.

Transformation requires a step change – a sense of urgency. There was none of that in Michael Cullen’s Bondi budget. In every way it was a missed opportunity.

Dr Wayne Mapp

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