Environment no good for business

Friday, April 27th, 2007

Environment no good for business, especially for manufacturers

The closing of Fisher & Paykel's appliance plant would have come as a surprise only if the environment was friendly to business, but its as unfriendly as it gets, the Employers & Manufacturers Association (Northern) says.

"We have the highest interest rates, highest exchange rate, amongst the highest tax rates in the developed world, and rapidly rising labour regulation and costs," said Alasdair Thompson, EMA's chief executive.

"Much of the responsibility for all these can be sheeted straight back to government policies and its poor quality, expansionary spending.

"In these circumstances the F&P announcement is an entirely rational business decision that will be good for F&P's shareholders by taking advantage of far lower costs and incentives in Thailand.

"But Government needs to act urgently to ensure companies like F&P can retain their r&d, design, specialist skills, and head offices in New Zealand.

"The cuts to business tax foreshadowed by Dr Cullen for the Budget next month won't be enough to get us on the front foot.

"They will show us trying to play catch up with other countries though innovative policies, and leadership, are needed to retain profitable manufacturers.

"Government should impose limits to spending on its expansionary 'chocolate factory' programmes and boost its own productivity.

"Central and local government are also taking the skills needed by business to create wealth for supporting better education and health standards.

"Regulation in New Zealand needs freeing up. We're heading in the opposite direction from Australia where a year long probationary period of employment for small businesses is being introduced. We haven't even got one for three months.

"We need lower and flatter taxes, more NZ T&E people on the ground in offshore markets assisting exporters, reform of local government, and a partial sale of some SOE's to speed up investment in infrastructure.

"In all, we are nowhere close to achieving anywhere near what we could achieve."

ENDS

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