Kiwi Pragmatism Shining Light In Difficult Economic Times

News release
20 December 2012

Kiwi Pragmatism Shining Light In Difficult Economic Times

New Zealand businesses are looking for the Government to take a series of pragmatic approaches to stimulating the economy rather than interventionist policies according to the Grant Thornton IBR survey.

Pam Newlove, Co-Chair and Partner, Grant Thornton New Zealand Ltd, said the surprise is more in what businesses want the Government not to do rather than what they want done.

“With all the recent clamour about stimulating the New Zealand economy by printing more money, only 2% of businesses surveyed were in favour of this with an encouragingly low 38% wanting the Government to pressure the Reserve Bank to lower the OCR.

“We had expected both to be higher. Instead, we are heartened that the survey reflected much more practical and long-term solutions to lift the New Zealand economy,” she said.

The survey identified two main thrusts. One was based around boosting skill levels through apprenticeships and higher subsidies for research and development, and the other was on making it easier to do business.

“Ninety eight percent of those surveyed wanted more active promotion of apprenticeships and youth training initiatives with 66% urging for increasing subsidies for Research and Development.

“The focus on apprenticeship training was so strong that I believe it could easily become a major election topic.

“On the efficiency side 82% want further changes made to the Resource Management Act and the building consent process to reduce compliance costs, while 78% wanted regulatory red tape reduced to a minimum.”

Forgiving student loans (20%) and easing the Overseas Investment Commission criteria (28%) was less popular.

“Reducing the Government deficit (94%) was another obvious well supported factor, with strong backing for a ‘Buy New Zealand’ campaign at 84%. Around half the businesses interviewed suggested increasing immigration (48%), lowering income tax (52%), providing tax breaks for exporters (54%) and subsidising childcare (58%).

“It really is a very mature response from New Zealand businesses. Interventionist policies can work in the short term, but they are not a long-term panacea. We only have to look back to the Muldoon era of the 1980s and some of the short-term measures that were introduced then to understand the long-term impact they had on the New Zealand economy.

“There are many pressures on the New Zealand economy at present and it would be good to see the Government supporting the business community as it plots its course towards balancing its books by 2013-2014,” she said.

ENDS

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