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Government Rakes In Cash As Exporters Suffer

18 December 2003
PR 263/2003
Government Rakes In Cash As Exporters Suffer

Enormous surpluses forecast in the December Economic and Fiscal Update (DEFU) highlight the urgent need to cut the amount of cash harvested from New Zealand wealth creators such as farmers, said Tom Lambie, President of Federated Farmers of New Zealand (Inc).

The DEFU picks the operating surplus to rise above $6 billion in the year ending June 2004. To put that in to perspective, that equates to $1,500 per New Zealander in just one year.

"With so much cash sloshing around the consolidated fund, it's time for the government to find ways of helping exporters -- New Zealand's wealth creators -- rather than continuing to whack them with new taxes, levies, charges, fees, and regulations," he said. "This is hugely important in the context of the outlook for the export sector. Treasury forecasts export prices to fall 9.8 percent in the current March year, after falling 13 percent in the previous year.

"Falling prices mean less money at the farm gate. But if that wasn't bad enough, local and central government keep adding unnecessary expenses, which further erode profits and hike inflation," Mr Lambie said.

"Curbing rampant local government rates and ensuring proper use of fuel excise taxes would be a start. Scrapping knee-jerk legislation such as the Building Bill and axing the new $20 million security tax on traders would be good follow through," Mr Lambie said.

Rather than aiding business with sound regulation, the government has in recent days introduced new legislation which will give business headaches over the Christmas period. These include changes to water allocation rules, employment laws, and electricity regulation.

"The Government has a stark choice to make. It either continues to tinker here and there and throw money at handed-picked investment winners, or look to the long-terms interests of all New Zealanders," Mr Lambie said.

ENDS

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