Budget move towards higher-earning economy

Business will view the Budget as a positive move towards a more competitive, higher-earning economy says BusinessNZ.

Chief Executive Phil O’Reilly says the Budget’s tax provisions are pointing in the right direction and the consistency of 28% for company and PIE taxes will make the system fairer.

“Achieving the 28% rate for company tax rate in the 2011/12 financial year – two years earlier than Australia’s company rate goes to 28% - will be a boost to competitiveness.

“Reducing the top rate of personal tax to 33% will have a positive impact for thousands of businesses that pay personal rather than company tax.”

Mr O’Reilly said the depreciation provisions – across all buildings with an estimated useful life of 50 years or more – also had the merit of consistency and fairness.

“These tax decisions are targeted at the long term health of the economy. It is to be hoped that future Budgets will continue this positive approach.

“Budget funding for research and technology that was announced last week also constitutes a long-term approach to building the economy.”

Regulatory reform did not have the emphasis business would have hoped for in the Budget, however the signalled intention to consult on scrutiny of existing regulation would be welcomed, Mr O’Reilly said.