CPA Australia: NZ Budget must address savings

Auckland, 16 May 2011 – The 2011 budget is an opportunity to build on the Budget policy announced by the Minister of Finance last December, CPA Australia said.

The 2010 Budget was a positive step towards ensuring balanced and sustainable economic growth in the context of the Government’s commitment to responsible fiscal management balanced with providing appropriate incentives for personal and corporate effort, said CPA Australia New Zealand deputy president Mark Stinson.

Mr Stinson noted that this fiscal approach was designed to restore the fiscal buffer against future shocks by ensuring that net Government debt is brought back to a level no higher than 20% of GDP by the early 2020s.

This is proposed to be achieved by returning the Government’s operating balance, before gains and losses, to a meaningful surplus by 2014/15. The 2011 Budget is expected to support this plan via appropriate restraints on new spending initiatives in both the recurrent and capital areas, together with shifting existing spending towards higher value priorities.

CPA Australia also broadly welcomes the Government’s economic strategy based on six key policy areas designed to lift growth and create jobs, viz:

1. strengthening the tax system to improve incentives to work, save and invest,

2. enhancing the efficiency of the public sector to ensure the delivery of more and better quality services at lower cost,

3. appropriate measures to lift education and skills to underscore higher levels of innovation and productivity,

4. raising productivity through promoting better science, innovation and trade,

5. regulatory reforms to remove unnecessary ‘red-tape’, and

6. investing in productive infrastructure.

Mr Stinson said that it was important the government help build a more resilient economy that would be in a better position to withstand external shocks in the future.

He noted that there are a number of ideas proposed in the recent report of the Savings Working Group and this budget will be a timely opportunity for the Government to show its intentions in this area. Government are naturally wary of increasing their costs and costs to businesses, but it is tremendously important that savings start sooner rather than later. Any suggestion that the retirement age be raised to 70 is unconscionable and simply unfair to the large number of New Zealanders who have worked hard thoughout their lives.

“New Zealand faces many economic challenges. And while it is essential to restore the infrastructure in Christchurch and other earthquake damaged areas following the recent natural disaster CPA Australia does not favour the imposition of an extra tax or special levy to fund the Christchurch recovery effort as per the recent flood levy announced by the Gillard Government in Australia,” said Stinson.

About CPA Australia’s in New Zealand

CPA Australia is the global professional accountancy designation for strategic business leaders. CPA Australia members in New Zealand contribute to a worldwide membership of over 132,000. CPA Australia members are leaders of many of New Zealand’s largest and most recognised organisations from Beca to Adidas and Villa Maria to Bank of New Zealand.

ENDS

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