Statement to Parliament - headlines are on target

1 February 2005

Statement to Parliament - headlines are on target

Many of the headlines from today's Statement to Parliament are good in principle, says Business NZ.

Chief Executive Phil O'Reilly says productivity, education and training, trade, engagement with Asia, Maori development and increased participation by women in the workplace are important for improved growth.

"It's unfortunate, though, that the Prime Minister has given no indication of the one thing we think would do most sustain growth in the medium term - a tax cut.

"And the detail behind some of the headline seems a little illogical. Many businesses would find it hard to agree with the Prime Minister's statement that recent employment relations legislation will improve productivity. Mandating four weeks' holiday, for example, will automatically decrease productivity by 2% from 2007.

"There's also concern that much of what the PM is talking about involves increased taxpayer expenditure, and that's not always the best way. For example, although it's good that the Government is committed to increasing infrastructure development, there's no opportunity signalled for private sector investment in this area.

"While the idea of helping more women into the workforce is a good one, the measures proposed for achieving it sound a bit hard on the taxpayer's wallet.

"Overall, while the headlines of the Statement are very positive, there's a concern that it may be signalling a lot more Government spending and a larger bureaucracy when the smart use of the market and the private sector could be more effective."

ENDS

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