Balance About Right In Rebuilding Together Budget
The EMA says the Government’s budget amidst COVID-19 was always going to have to strike the right balance between spending and debt levels to regenerate the economy for the benefit of all.
Chief Executive Brett O’Riley believes it does provide a first step in doing this, but is keen to continue to work together with the Government on long term economic recovery and additional sector-specific plans.
"We are particularly pleased with the $4 billion business support package, the $3b for shovel-ready infrastructure projects, and the focus on innovation and digitisation and vocational education and training," he says.
"For businesses who have suffered a 50 per cent downturn since this time last year the extension of the wage subsidy by eight weeks will be welcome news, and for SMEs $10m target for them to improve their e-commerce offering and additional incentives and grants to encourage e-commerce adoption will be crucial."
The EMA says the combination of immediate and ongoing support, especially in the digital space, does help especially in the short term.
"We know it’s hard for businesses, especially SMEs to look at innovation when they’re struggling to stay solvent, but now is the time to capitalise on the things they’ve had to do differently and use the Government’s support to do things better into the future," says Mr O’Riley.
The EMA believes that increased support for R&D including the short-term temporary loan scheme to incentivise businesses to continue with plans, with the help of one-off finance administered by Callaghan Innovation, is the key for many to be able to pivot and regenerate.
"We’re also pleased to see the $216m boost to NZTE to expand its scope of support to businesses, particularly with digital services," says Mr O’Riley.
And although positive economic indicators are set to take a plunge in the short term - GDP will go down and unemployment and debt levels up - at least those who have lost their jobs have prospects for the future, although potentially doing different work.
The $1.6b Trades and Apprentice Package to provide training opportunities for people of all ages is a practical measure to get people back to work, and the $50m allocated for Maori Apprentice and Trades Training is also welcomed as we’re already seeing younger people join the dole queues at a faster rate than others.
"It is also pleasing to see that the Government has balanced the economic need to the country with overall wellbeing, with it addressing housing with a $5b building package through Kainga Ora, $121m for community initiatives for at risk young people, and $1b for the environment," says Mr O’Riley.
But while there is cash for key sectors such as Export and Manufacturing, the key will be in the detail of these plans.
"Manufacturing is acknowledged as an essential plank of our economic recovery going forward, and we’re keen to work with the Government on a more detailed, future-focused plan for this sector, similar to the $400m Tourism Sector Investment Plan that has been announced," says Mr O’Riley.
"We are also looking forward to providing any input we can to the Infrastructure Reference Group that will govern the projects that will literally help get our economy moving, for the good of all."