No Great Benefits For Business From The Balanced Budget 2021
The EMA says there is not much in Budget 2021 for business, but that is as expected.
Chief Executive Brett O’Riley says not surprisingly the major focus was on securing the country’s recovery through supporting people socially and the environment, with some very modest initiatives for businesses, including:
- $44m to continue the Digital Boost Programme for business training for SMEs and new digital advisory services
- An increase in infrastructure investment to $57.3b for the next four years, including $810m for KiwiRail for new locomotives and wagons as well as maintenance
- The reinstatement of the Training and Incentive Allowance for levels 4-7 of the NZ Qualifications Framework, enabling 16,000 people to retrain, gain higher skills and transition into new careers
- An extra $279.5m for the Reform of Vocational Education (RoVE).
"While no one would argue against supporting our people, we had hoped for better growth projections and more practical support for businesses," Mr O’Riley says.
Everyone expected a budget based on modest economic growth projections, and indeed GDP is forecast to remain at around three per cent, on average, out to 2025.
"We believe one of the barriers to better growth and productivity are labour shortages, made worse by closed borders and limits on immigration. A recent survey of our members on labour shortages highlighted again how much they are struggling with this - across all sectors, at all skill levels and across the country," he says.
Manufacturing is the sector where labour shortages are being most keenly felt, with 23 per cent of respondents saying they were experiencing severe gaps.
Mr O’Riley says the announcement of a social insurance scheme to assist those made redundant is something the EMA would welcome if it was structured correctly, and only in place of four-weeks’ compulsory redundancy.
"It would need to include contributions from employees, employers and the Government though, otherwise it would add significant liability to the balance sheets of businesses."