Finance Minister Grant Robertson will unveil this year’s budget on Thursday.
Some say now is the time for change, as the country experiences high inflation, reopening borders and a tight labor market.
We asked: What do you hope to see this year?
Kirk Hope, Managing Director, Business NZ:
The main problem for companies remains the shortage of skills. The government can solve this problem by having a clear and well-established policy on immigration that allows businesses to attract people to New Zealand. This issue is bigger than an annual or even multi-year budget as it impacts not only the private sector but also the government itself as it deploys spending in critical areas such as infrastructure development , and this problem also affects the provision. essential public services such as health.
Greg Harford, Managing Director, Retail NZ
I would like to see the government let people keep more of their own money and help with the cost of living crisis, by reducing the GST or other taxes.
Gareth Kiernan, Chief Forecaster, Infometrics
The one thing I would most like to see is not a single policy initiative, but rather a change in tone or approach by the government from the relatively free and easy spending approach of the past two years. . The rationale for the massive support to the economy over the past two years was clear in terms of the expected effects of the pandemic, as well as the actual effects of lockdowns and other restrictions on specific sectors of the economy. These justifications are no longer there, and although fiscal policy is reduced, the presence of a new spending allocation of $6 billion seems important in the context of budgetary results and the increase in public debt over the past few years. last two years.
The strength of government demand and the growth of the public sector workforce are exacerbating very strong demand pressures in the economy, and the government must be aware that it cannot continue to increase demand pressures. demand without negative implications on its ability to meet its forecasts. or promised expenses. Infrastructure is an obvious area, where costs are rising rapidly, there is a skills and labor shortage, and yet there are major plans for increased spending to meet higher demand and to modernize or replace networks and assets that are not really suitable. The risk is that unless the government takes a more measured and intelligent approach to what can and cannot be achieved given the current stresses the economy is under, only the first projects off the mark will get done. , with delays and cost increases. undermine the funding available for later projects. The risk is that larger but complicated projects may not end up moving forward because easier projects start first and the government acts as if its resources are unlimited, rather than a smart approach around prioritization and planning workloads and funding.
Susan St John, Child Poverty Action Group
We would like immediate action on Working for Families. Children can no longer wait for the long-promised examination. Too many people have been left behind for too long
The Employment Tax Credit should be increased to account for inflation to $82 per week and added to the Family First Child Tax Credit. In this way, the most disadvantaged families in terms of benefits get a significant boost of more than $4,000 per year and major discrimination against the poorest children is removed.
Full Working for Families is expected to be indexed annually to wages, just as NZ Super is for seniors and core benefits for adults.
The draconian relief for low-income families dependent on paid work should be reduced from 27% to 20% and the family income threshold at which it applies raised to a more realistic amount of $50,000.
Sharon Cullwick, Chief Executive, New Zealand Federation of Property Investors:
Some relief for private rental home providers so they can help the 25,000 people move out of emergency accommodation and into a home. Examples of this include reducing the clear line test to two years and allowing providers of private properties to claim interest again as a tax deductible mortgage expense.
Alan McDonald, Head of Advocacy and Strategy, EMA
It might seem like a bit of an odd place to start on a wish list for companies, but we would really like to see a change in the education sector to put more emphasis on outcomes and not products, especially – targeting spending to increase literacy and numeracy, including digital.
Our members tell us that too many of our young people, and sometimes not so young people, show up for their first job and are not ready to work. The lack of basic literacy skills contributes to relatively high dropout rates in some learning support programs and the lack of basic literacy and numeracy skills is a drag on productivity.
Soft skills around communication and interaction with other workers and supervisors are also lacking.
So we would like to see incentives for companies for on-the-job training, treating investment in people the same as other investments in the company through other incentive programs.
And while we’re talking about investing in education in a new school in downtown Auckland, it would help change the demographics of the inner city population, making it more attractive to families and helping to revitalizing the city center after the Covid drain.
We must also prioritize investments in the tertiary sector to address persistent shortages in specific sectors such as engineering, digital, health sciences. The immigration reset targets some of these sectors, but to meet long-term needs, we still need to train more of our own people.
We must also rapidly advance key infrastructure projects, particularly in the Upper North Island, to improve interconnectivity between key manufacturing and productive sectors in the region. A number of critical transport projects have been reduced or delayed and the construction of a fourth mainline rail link from Auckland would actually make a true express service between Auckland and Hamilton more feasible.
If we are to achieve the 2050 zero carbon targets, investment in alternative energy sources, including electric vehicle infrastructure and hydrogen, becomes critical and we need a clear plan to electrify fleets private and freight vehicles.
Wasteful infrastructure spending must also be reduced. More money has been spent investigating the failed cycle bridge across Waitemata Harbor than the original project cost of $38 million.
Set up the much needed dry dock at Whangarei and move the New Zealand Defense Force to Northland as a major regional development opportunity for the region. And let’s accelerate the expansion of the rural broadband network.
Finally, as many companies begin the difficult post-Covid recovery work, we would like to see real incentives to invest in productivity gains. A good start would be incentives for automation and mechanization, such as a higher depreciation threshold over a shorter period for new equipment/machinery.
Investing in new machinery, automation, technology and software improves productivity and helps overcome skills and personnel shortages. Couple that with incentives to upskill and retrain our employees, and we get a more productive, more skilled workforce that earns higher wages and salaries.