Red Tape And Taxes Strangling Economic Growth

8 October 2008
Embargoed until 5pm 8 October 2008

Red Tape And Taxes Strangling Economic Growth

Property Council New Zealand is calling for major law reform to ensure that New Zealand can weather the “perfect” storm currently engulfing the global financial market.

Property Council Chief Executive Connal Townsends says the stampede to re-regulation must be reversed if New Zealand is to remain an attractive place for Kiwis and foreign investors to live, work and do business.

“Overseas investors are being put off by perceived Government interference and politicisation of investment decisions while several current statutes inhibit growth, cause lengthy delays and add needless costs.

“We have all too often passed over the opportunity to reward innovation and enterprise in recent years, preferring instead to embrace stifling and expensive compliance and regulation, tolerating political interference in what should be straightforward investment and planning decisions,” said Connal Townsend.

That message underpins A Roadmap for Reform, a publication released by Property Council New Zealand today that sets out a plan for growing New Zealand’s economy - particularly the commercial and residential property sectors at the heart of so much economic growth - and securing it from the current economic downturn.

“Property Council’s blueprint argues the case for New Zealand to change course. We need to cut through the malaise of compliance costs that drive up the cost of doing business, particularly in the property, building and construction sectors that employ thousands of New Zealanders.

“By making some overdue changes to statutes such as the Overseas Investment Act 2005, the Resource Management Act 1991 and the Building Act 2004, we can once again start to reward people who are prepared to risk a dollar and invest their skills to create jobs, wealth and prosperity,” Connal Townsend said.

The release of A Roadmap for Reform comes at a time when the number of new dwellings consented in New Zealand has fallen to its lowest level since December 2000. Figures released by Statistics New Zealand show that the number of new dwelling consents issued in August 2008 had decreased by nearly 50 per cent compared to the same time last year.

“We have to take a reality check and be honest about where New Zealand is heading. We need to overhaul the compliance rules at all levels of government. These rules are currently undermining New Zealander’s ability to do well in business, create wealth, and employ other people. They also contribute significant costs to new homes and place unnecessary costs and time delays on construction.

“A Roadmap for Reform is a positive document. It affirms our belief that New Zealand is capable of being at the cutting edge in business and in commercial innovation and productivity. But success will only come through structural reform.

“We will be using A Roadmap for Reform to sell our message to the decision-makers who will govern our country after the General Election, and in years to come. We will benchmark the next government’s performance against our own blueprint for change.

“Property Council members collectively account for around one quarter of New Zealand’s commercial property portfolio. Our members have a critical stake in ensuring that New Zealand enjoys the right mix of public policies, which support wealth creation and reward innovation,” Connal Townsend said.

ENDS

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