Useful microeconomic changes though not transformational

Today’s Budget has made some useful microeconomic reform, but overall has not delivered a transformational change for the business environment, says Business NZ.

Chief Executive Phil O’Reilly said the Budget delivered some welcome investment in the productive capacity of the economy, including changes in research spending, broadband and company compliance.

He said the decisions on the international tax regime were generally positive.

“The Government’s commitment to increasing skills is particularly welcome,” Mr O’Reilly said.

But he said the thousands of small and micro-sized businesses that pay tax at the top tax rate have received little relief.

“A stronger reduction in their tax burden would have made a significant difference to the nation’s rate of economic growth and it is disappointing that this opportunity was not taken.

“Also missing from the Budget was any signal about reducing government spending, a key driver of our high exchange rate.”

He said personal tax reductions were positive, though initially small, and apart from the initial impact in October this year, taxpayers would have to wait a year and a half for the next round.