Speech Welcoming Minister of Finance

20 May 2005

Comments welcoming the Minister of Finance at lunch , Charles Finny, CEO, Wellington Regional Chamber of Commerce

Minister we are delighted to have you with us for today’s lunch. This is the busiest time of the year for you and your willingness to join us today is a great honour.

We are all here to hear your perspectives on why yesterday’s budget was shaped the way it was and where you see the budget taking the economy.

The Chamber issued several comments on the budget yesterday. Because they were not vociferous attacks on you Dr Cullen, they have not been picked up much in the media – but should [people be interested you can find them on our web site and on sites such as Scoop.

We were not attacking you Minister because we welcomed much of what you were saying yesterday. Our key themes here at the Chamber are that New Zealand is facing a productivity and skills crisis and that making progress in these areas – plus opening new markets, and improving market access to existing markets is key to the delivery of the Government’s goal of having New Zealand move back into the top half of the OECD per capita GDP ladder. This is a goal which we support strongly.

And in these key areas you have delivered for us Dr Cullen. Maybe not as much as we were hoping for – roading perhaps being the most obvious example (an increase of $100 million a year is just not enough to solve Auckland and Wellington’s needs) but you did deliver in these areas. For these reasons we welcomed the increased funding allocated to trade negotiations, welcomed the changes announced to depreciation regimes and FBT, welcomed new initiatives on business research and development, public science, the digital strategy, and on apprenticeship and skills training. The specific industry initiatives aimed at small business such as increased funding for Biz Info and the mentoring programme are also very welcome to us – and we look forward to continuing to work with Government to help deliver these programmes to business.

But Minister we do have concerns about the future of the economy. Your own figures released yesterday are pointing to a turn down in growth. We also see growing inflationary pressures in the economy. Large wage demands without matching growth in productivity exacerbate these concerns. Overall we also have a concern about the projected size of future budget surpluses, and about the continuing level of growth in Government expenditure. We were not expecting these this year – but have to say that the pressure is mounting for some reductions in tax rates – company tax rates will be a good place to start.

Dr Cullen, the floor is now yours……

ENDS

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