Golden Opportunity Wasted

Golden Opportunity Wasted

The government today missed a golden opportunity in the Budget Policy Statement to repair battered business confidence, said Don Nicolson, vice president of Federated Farmers of New Zealand (Inc).

According to Treasury’s latest forecasts, economic growth in 2007 and 2008 will be the weakest since 1998 and 1999 following the Asian crisis and severe drought.

“The government could have sent a message today to farmers and other exporters that it values their contributions to economic growth and raising the living standards of all New Zealanders. It could have signalled a readiness to implement new policies to improve productivity and competitiveness.

“Instead today we have more of the same: higher tax and higher spending.

Between 1999 and 2005, tax revenue per person jumped 44% from $7,882 to $11,377, and core Crown expenses per person rose 26% from $8,961 to $11,282.

Treasury’s forecasts suggest that by 2010, tax revenue per person will increase a further 19% to over $13,500 and that core Crown expenses per person will increase a further 26% to over $14,000.

“More of the same is no longer good enough. Federated Farmers urges the government to take decisive action to improve confidence. It must avert a hard economic landing by showing greater willingness to contain growth in government spending, and prioritise its spending on areas delivering value.

“The government also needs to do more to keep a lid on regulatory creep and compliance costs. It must reform the RMA, maintain rather than erode labour market flexibility, and focus on improving infrastructure and skills.

“New Zealand can no longer afford to rely on the good fortune of recent years; now is the time for good management”, said Mr Nicolson.

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