Fran O'Sullivan on business

Business analysis and comment from Herald columnist Fran O'Sullivan

Five big takeouts that business expects from Key's speech

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John Key is expected to outline his economic plans in a speech tomorrow. Photo / Mark Mitchell.
John Key is expected to outline his economic plans in a speech tomorrow. Photo / Mark Mitchell.

How will business judge John Key's economic plans? Pretty well - if he meets the five criteria that leading business players bring up.

Spend that political capital
Business has been tolerant (barely so) of Key's decision to carefully guard his political capital in his first 12 months in office. Yes he needed to keep confidence up in the depth of recession: Everyone gets that.

But what they won't get is another 'do nothing' year. The politician has the gift of the gab - time now to put the money where is mouth is.

Grow the top-line
Business has given Key a big tick for exploring mineral mining on the conservation estate, investigating a new aquaculture marine industry and more oil and gas exploration.

But they want him to sell the benefits - not shy away when the protest lobby swings into action.

On the treaty front, Key needs to be very careful that any deals are transparent. There has been no public debate on Auckland's volcanic cones - nor the harbours, and, precious little on foreshore and seabed. Key will win respect if he throws the latter back to the courts to decide.

Set measurable goals to catch-up with Australia.
Reserve Bank Governor Alan Bollard rained on Key's party by pointing out the obvious: New Zealand hasn't a hope in Hades of Catching up with Australia.

Well we won't unless Key sets some measurable goals and big ticket policies to get growth ticking at a faster rate than Australia.

Act's Rodney Hide won't let the heat off.
In three weeks' time a host of speakers at Act's annual conference - "Catching up with Australia" - will give their views on what's necessary to reach the goal Former National Leader Don Brash who heads up the 2025 taskforce, former Treasury Secretary Graham Scott and former finance minister Sir Roger Douglas are expected to outline their prescriptions.
Where is Key's?

Reform taxation and crackdown on property speculation
The KISS formula (keep it simple stupid) will get the business tick. Around the traps, the business lobbies are pointing to quick measures such as:-

Cutting the headline company tax to 25-27 cents in the dollar from October 1 - to steal a march on Australia;

Dropping the top personal tax rate back to 33 cents ( where it sat before Labour Government embarked on its penalize the "rich" policies)

Making the first $X of income tax-free and raise GST to 15 per cent.

Instructing IRD to perform a major crackdown on LAQCs and wipe depreciation on buildings. If the values of residential property drop too much that will upset the apple cart for the thousands of small businesspeople whose business loans are guaranteed against the equity in their homes.

Jobs Summit - Redux
Have the guts to hold another Jobs Summit - this time focused on the burgeoning youth unemployment.

There's not much point offering tax cuts to keep the "in work" Kiwis here if the Government turns a blind eye to the increasing number of school leavers who can't find work. A big focus on skills and employment is needed thus creating a jobs pipeline as the economy picks up steam.

"John Key presided over a jobless recovery" does not make for a great election headline.

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