31 October 2000

Media Release

CIRCUIT BREAKERS.....
"... To Build Our Way Out of Pessimism"

Unless and until there are some significant policy changes designed to act on the ideas tabled at last week's Government-Business Forum, the dismal economic outlook revealed in the National Bank's October survey of business opinion will not get better - it could get worse!

Whether the issue is R&D, compliance costs, education and training, investment and all the other constructive "circuit breaker" ideas raised by business leaders in workshops and discussion groups with Cabinet Ministers and Senior Officials at the Forum, Government have a simple choice.....

 On R&D: "They can listen to business people who said that the long-term gains from making R&D tax deductible at rates competitive with other countries will be significant, or they can listen to Officials who say there will be a loss of tax revenue in the short-term."

Michael Barnett, Auckland Chamber of Commerce Chief Executive, said if the "way forward" is to take the short-term options, then no one should be surprised if there is no improvement in business confidence.

 Similarly with compliance costs. "Over successive governments, business has been calling for a campaign to reduce compliance costs..... without a circuit breaker, there is no reason for business opinion to improve....

 Education and training. Government must find the circuit breaker to take better control of the type of graduate coming out of universities, if we are to forge a growing knowledge-based economy.

"We need circuit breakers on immigration, investment, and building up the number of export-focused businesses...."

It is plain common sense, said Mr Barnett. "If Government can get itself motivated and organised to respond to the business call for circuit breakers in the areas needed to build a better performing economy, then of course business opinion will respond. But if there are no circuit breakers - then business opinion won't change either. Why should it?"

For more information contact: Michael Barnett, Ph: 021 631 150

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