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Budget Business Growth Agenda initiatives to build economy

Budget Business Growth Agenda initiatives to build a stronger economy


The new Business Growth Agenda initiatives in Budget 2014 will help reduce capacity constraints in the New Zealand economy and lift our productivity and long-term growth rate, Economic Development Minister Steven Joyce says.

Budget 2014 contains funding for a range of initiatives across the six key inputs business needs to get ahead: building export markets, creating skilled and safe workplaces, developing our natural resources, building innovation, and capital investment and infrastructure.

“As everyone now knows, we have entered a period of significant growth for the New Zealand economy that is lifting job numbers and incomes,” Mr Joyce says.

“The challenge for the Business Growth Agenda is to keep reducing some of the longer-term capacity constraints in areas like skills and innovation, so the New Zealand economy can continue to grow at a faster rate for an extended period.”

Mr Joyce says that the focus has to be on helping provide New Zealand exporters a competitive platform from which they can succeed internationally.

“Our exporters have done very well in the last two years despite a high exchange rate. We need to keep assisting them with the tools that allow them to compete from our small base right here at the bottom of the world,” Mr Joyce says.

New Business Growth Agenda initiatives in the budget include:

$69 million over four years for New Zealand Trade and Enterprise to expand New Zealand’s presence in China, South America and the Middle East, and increase the number of businesses it intensively engages with from 500 to 700

$56.8 million over three years for contestable science and innovation funding, taking total annual government investment to $1.5 million by 2015/16

Loss-making start-up companies will be able to cash out all or part of their tax losses from R&D expenditure. All businesses will be allowed tax deductibility for R&D “black-hole” expenditure that is currently neither deductible nor able to be depreciated. These two initiatives are together estimated to return a net $58.1 million in tax to innovative companies over the next four years.

$199 million additional investment in tertiary education including:

$83.3 million allocated to lifting tuition subsidies in disciplines including science (8.5 per cent), agriculture (8.5 per cent), and selected health sciences (pharmacy 16.4 per cent and physiotherapy 12.4 per cent)

Up to $20 million in 2013/14 and 2014/15 for a further 6,000 places in the Apprenticeship Reboot programme, taking the number of places to 20,000

$28.6 million for ICT training initiatives (including $11.8 million of contingencies)

Interest-free loan of $375 million to the New Zealand Transport Agency as part of $815 million of accelerated Auckland transport projects

$31 million of the Future Investment Fund towards Hobsonville Land Company housing development

$40 million of the Future Investment Fund for Crown Irrigation to invest in irrigation schemes.

“Stronger economic growth over a period of time is the only way we can lift incomes for New Zealanders and their families relative to the rest of the world,” Mr Joyce says.

“We have made a good start, and these initiatives will add to the BGA’s objectives of lifting productivity and achieving consistently higher growth rates over the cycle for the benefit of Kiwi families.”

ENDS

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