Media Statement Thursday, May 15th, 2003

Ambition for NZ's economic success lost: Budget reaction

Providing subsidies to make it easier for small business to pay their tax is not what we had in mind when we advocated a fiscally neutral lower company tax rate, the Employers & Manufacturers Association (Northern) says in reaction to today's Budget.

The Budget won't let private enterprise unleash its latent forces of wealth and job creation, the association says.

"The Budget abandons economic transformation and the growth of the economy as the primary goals for New Zealand," said Alasdair Thompson, EMA's chief executive.

"It demonstrates Government has given up on getting New Zealand back into the top half of the OECD.

"Government believes it can maintain spending on health and welfare programmes without growth. But if it were committed to economic innovation and growth as Dr Cullen says it is, business would expect to see the evidence in imaginative and bold new policies, and through maximising private sector participation.

"More tax funded spending doesn't cut the mustard.

"We can't see how Dr Cullen can claim Government policies and budgets are responsible for the relatively strong growth of the economy over the past three years. The evidence is to the contrary with Government constantly adding to business costs.

"There's nothing in the Budget to get our rundown infrastructure like roads and electricity supply working better.

"If growth were the focus, much of extra band-aid spending on health and welfare would not be required.

"Instead we have seen health and welfare taking an ever greater chunk of an economy that's rapidly slowing.

"In fact the Budget's growth projections for the next decade are much less at just over 2% a year than for the past decade of 3.5% a year.

"Of course the wide number of new investments in education, and research and development are welcome, but business was hoping for structural policy developments that would give real impetus to growth.

"The Budget shows the Government has lost its sense of ambition for New Zealand's economic success."

ENDS

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