Don Brash National Finance Spokesperson

27 December 2002

The tills are ringing - but for how long?

The shop tills may be ringing loudly, but there's no room for complacency about the country's future growth prospects, says National's Finance spokesman Don Brash.

"The last couple of years have been very good for the economy, with the Government enjoying the benefit of high commodity prices, good growing weather down on the farm, low interest rates and, until recently, a weak exchange rate.

"But many in the business community, and even the Finance Minister himself, have admitted this won't last.

"As we head into 2003, the OECD is projecting a sharp slow-down for New Zealand over the next two years, and the Reserve Bank has suggested that growth would slow from around 4 ¼ per cent this year, to around 2 ½ per cent in each of the next two years.

"The Treasury's own estimates also suggest a sharp slow-down next year.

"This Government isn't helping - and it isn't listening. It's lined up a raft of legislation which will undoubtedly hurt growth and push up business costs, despite an outcry from the business sector. In fact, a Business New Zealand study earlier this week estimates that new Government policies will burden medium-sized businesses with an extra $44,000 in costs next year.

"Changes to the Holidays Act, the Local Government Bill and Health and Safety in Employment legislation, along with hefty compliance costs and envy taxes are all major roadblocks to New Zealand moving back to the top half of the OECD.

"In short, the Government is squandering the good opportunities handed it on a platter and is now intent on loading extra costs onto the business sector.

"National has a challenge for Dr Cullen. We want more than 'talk' on economic growth in the New Year; we want action on supporting business and encouraging innovation because only then will New Zealand have any chance of achieving higher sustainable growth," says Dr Brash.

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