Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search


Focusing on growth only way to deal with dead rats

Media release

Thursday, May 20

Focusing on growth only way to deal with “dead rats”

Today’s Budget is the most radical in years and represents a big bet on delivery of the required impetus for the Government’s growth strategy, says Deloitte chief executive Murray Jack.

Finance Minister Bill English’s second Budget today included changes to personal and corporate taxation rates, an increase in GST, and changes to taxes on residential investment property and buildings, along with a return to fiscal surpluses earlier than previously forecast.

Mr Jack says this year’s Budget offered the opportunity to chart a strategic direction for the economy, given that last year was more about weathering the storm of global financial crisis.

“The strategy clearly focuses on raising New Zealand’s productivity and growth rate,” Mr Jack says.

“This is the only way the Government can deal with the ‘dead rats’ it has inherited, such as interest-free student loans, working for families, and the entitlement age for superannuation.

“But let’s be clear: if the economy does not reach sustainable growth levels there will be no choice but to peel back entitlements without resorting to unsustainable levels of borrowing – and the debacle in Greece has shown us where that road leads.”

The key planks that the Government is relying on to generate greater growth are:

·         tax changes,

·         constraining its expenditure,

·         and limited improvements to spending on research and development.


But whether the last of these measures has gone far enough is debatable.

“There is still no full-scale commitment to building world-class R&D environments in our areas of competitive advantage – agriculture and food production. This will take much more money than is currently on the table.

The focus on larger entities receiving R&D assistance seems counterintuitive to the obvious needs that small businesses and start-ups have.

“We are, after all, a nation of small businesses and this is a sector still under extreme pressure.

 The Government’s commitment to constraining expenditure is welcome, particularly as there is little evidence of fast-growing economies with Government spending over 40% of GDP.

“The Government recognises this by limiting increases to below the rate of inflation for a sustained period, and diverting spending from low value areas to higher priorities.

“But it could have been more aggressive. Staff numbers in the core public sector are coming down, but not by the rate of adjustment experienced in the private sector during the recession.”

© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On Vulnerable Kids, RNZ Funding, And Poppy

The decision to remove the word ‘vulnerable’ from the Ministry for Vulnerable Children could well mark a whole shift in approach to the care of children in need.

And I’m hedging with the ‘could well’ only because the Ardern government hasn’t yet spelled out whether the name change it has announced will also involve a rejection of the controversial use of Big Data to try and predict those children deemed to be at highest risk of inter-generational reliance on welfare support. More>>


Principals' Federation: End Of National Standards

Today the Minister of Education announced that the Government has stopped the controversial National Standards system of assessment and declared them an arbitrary measure which did not raise children's achievement as the previous Government intended. More>>


Public Good: People’s Report On Public Broadcasting And Media Presented

The People’s Commission on Public Broadcasting and Media, was crowdfunded and was informed by an extensive consultation, seeking the views of both those working in Media as well as gathering input both online and in person from ordinary Citizens. More>>


RBNZ To RNZB: PM's Press Conference

Prime Minister Jacinda Adern was joined by Minister of Finance Grant Robertson and Minister for Children Tracey Martin to announce the appointment of Adrian Orr as the new Governor of the Reserve Bank and the name change of the Ministry for Vulnerable Children to ‘Oranga Tamariki - Ministry for Children’. More>>


'Taming Globalised Capital': Why Is Labour Supporting Investment Rules In WTO?

‘Today, we learned the new government has added New Zealand’s name to a proposal designed to lead to foreign investment rules in the WTO at this week’s ministerial meeting in Argentina,’ said Auckland University Professor Jane Kelsey. More>>


Gordon Campbell: On The Politics Of Scaring Voters Back Into Line

Fear has always been a useful mobilising tool in politics… yet in 2017, bogeymen of all shapes and sizes seem to have fallen on hard times. For years, the National party had painted itself as being the only reliable defensive bastion against the terrifying prospect of a centre-left government… More>>


Gordon Campbell: On Drinking Water As A Failure Of Political Leadership

It is almost possible to feel sorry for the Health Ministry in their terrible, no good, very bad week... More>>





Featured InfoPages