National's Economic Ambitions Applauded
"National is putting forward a positive vision for New Zealand and its plan for achieving it is shaping up in a credible fashion", Dr Murray Horn, chairman of the New Zealand Business Roundtable, said today.
"The Business Roundtable has been quick to criticise National policies in the past when we felt they did not measure up. We are now equally quick to support these very positive policy developments. Bill English's willingness to raise National's sights is refreshing.
"The government is also aiming for sustainably higher growth rates but its own projections suggest the economy is not on a path to achieve them. Business organisations have been saying its policies do not match its goals. National's ideas look more conducive to raising economic performance.
"Key differences in National's programme which would do much to improve the business environment and the outlook for growth include:
• a planned reduction of central government's share in the economy to below 30 percent of GDP and the scrapping of the New Zealand Superannuation Fund. New Zealand simply cannot achieve and sustain per capita growth rates of 4 percent or more with present spending levels;
• bold plans for accompanying tax reductions, including the highest taxes which are the most harmful to growth. A medium term target of 25 percent for personal and company tax rates is exciting and achievable;
• a serious attack on low quality regulation including a Regulatory Responsibility Act as proposed by business organisations; and
• upgrading education and skills through an accent on decentralisation, choice and quality.
The package contains elements that require further development and there are notable omissions such as local government and welfare. It is inconceivable that National's growth and fiscal goals can be achieved in an economy that is so weighed down by welfare dependency. The lack of a clear commitment to getting the government out of running businesses is also disappointing.
"Nevertheless, National's package sets the scene for a vigorous contest of ideas about how New Zealand can achieve widely shared goals", Dr Horn said. "There is no reason why other political parties could not embrace desirable changes – for example, National's tax proposals are in line with the recommendations of the McLeod tax review commissioned by the government – and promote a greater consensus on ways of taking the country forward."