11 February 2004 PR25/04
Budget Policy Statement

The government's budget should focus on tightening expenditure, lowering taxes, and reducing the regulatory burden on all New Zealanders, said Tom Lambie, President of Federated Farmers of New Zealand (Inc).

"Progress in these three areas would do much to help meet the government's goal of returning New Zealand's economic ranking to the top half of the OECD," Mr Lambie said.

Mr Lambie made the comments to the Finance and Expenditure Select Committee, which is considering the Budget Policy Statement (BPS). He said the government's rationale for expenditure, outlined in the BPS, was not clear but appeared to be based on the assumption of "if we can afford to do it, we will".

"That is not a sound basis for setting a budget. The government's objective must be to focus on tightening expenditure and reducing tax revenue," he said.

"The government has added or proposed about 20 new taxes since it came to power four years ago. This cannot continue. Indeed, taxes must be removed or cut. By paying less tax, farmers and other small businesses would have more money to invest in their ventures, contributing to the broader economic growth that we all desire."

Speaking in support of the federation's written submission, Mr Lambie said the government should include in the BPS a regulatory policy statement. This would outline the government’s objectives and intentions to reducing regulatory burdens.

"There has been an avalanche of new regulations and taxes faced by New Zealanders. Recent examples include another fuel tax, the border security fee, the Building Bill, and the Employment Relations Law Reform Bill.

"Most of these taxes and bills are poorly thought through, increase costs to businesses and ultimately consumers, and make New Zealand business less competitive."

However, Mr Lambie said that the federation continues to support the principles of the Fiscal Responsibility Act -- under which the BPS is prepared-- and the obligation it places on government to specify long-term objectives and short term budget priorities.

ENDS

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