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Home / Business

Budget 2015: Realism tempers hope in Budget wishlist

NZ Herald
20 May, 2015 05:00 PM5 mins to read

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Kim Campbell says infrastructure and home affordability are too critical for point-scoring. Photo / NZME.

Kim Campbell says infrastructure and home affordability are too critical for point-scoring. Photo / NZME.

The Business Herald asks sector leaders what they want and expect to see today from the Finance Minster.

Kim Campbell, chief executive of the Employers and Manufacturers Association

Would like to see the Budget address Auckland's infrastructure.

"This tinkering around the edges and making excuses and blaming other people frankly is in my view counter-productive.

"Not only is it a problem for people living here, I think it's a problem for the whole economy."

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Auckland's housing supply also needed to be addressed, Campbell says. "Tinkering around with taxes and so on - it's just a way of taking attention away from the real nature of the problem.

"I'm not sure if the Budget is the right place to do it, but it's the time to bring it up because the supply side of housing is driving interest rates, it's driving the affordability of staff to live in the city - it goes to the core of so many issues.

"The combination of being able to get around and live here, I just think they're too important to politically play point-scoring [with]."

Taxation, although unpopular, was "the one lever that the Government can pull" to enable change, he said.

But he expects to see "very little" change in the Budget. "The minister has promised to try and get as close to balancing the Budget as he can ... [but] that means there's not much flexibility left in what he can do.

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"We've got to the stage where probably some significant policy initiatives are going to be needed.

"The time has now come to be a little bit more imaginative."

Connal Townsend, chief executive of the Property Council

Connal Townsend.
Connal Townsend.

Wants to see tax policy treat commercial buildings the same as all other productive assets.

"If a building's current market value and its ability to attract tenants is reduced due to an earthquake, and the owner is obliged to carry out strengthening work to restore its earning capacity and original capital value, that expense should be claimable against tax paid on the revenue."

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More money for crucial infrastructure funding is also on the list.

"The livelihood of our cities depends on it.

"This is holding up projects that were meant to be sped up under the Special Housing Areas because building too far out is now not a possibility in Auckland as we don't have the infrastructure for it."

Pushpa Wood, director of Massey University's Fin-Ed Centre

Pushpa Wood.
Pushpa Wood.

Wood says it would be good to have some serious investment in the regions to balance the growth throughout the country, rather than concentrating it in Auckland.

"I would also like to see a cross-party agreement and increased investment in lifting the financial capability of people in the country, especially children and vulnerable groups.

"It would be good to have some funds put aside to address the needs of the tertiary education sector."

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But Wood is not expecting much change to "pre-budget" information.

"There may be some initiatives to address child poverty, housing 'crisis' in Auckland and diversified economic growth. However, I doubt that there will be some serious investment in either of these areas."

Cameron Madgwick, CEO of the Petroleum Exploration and Production Association

Cameron Madgwick.
Cameron Madgwick.

Madgwick is hoping for a steady as it goes approach.

"We're probably happy with the investment the Government makes in [NZ] Petroleum and Minerals and their promotional activities," Madgwick said.

The oil and gas industry employed about 11,720 workers last year and faced an increasingly competitive global environment.

"In this low oil price environment we need to work hard to attract investment," he said.

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Although the health, safety and environmental regulations were "about right", companies continued to face high costs of meeting them, he said.

Shamubeel Eaqub, principal economist at NZIER

Economist Shamubeel Eaqub. Photo / NZME
Economist Shamubeel Eaqub. Photo / NZME

Eaqub wants Budget action on housing, poverty and inequality.

"There are two big issues. The biggest issue I'm most interested in is action on housing because this is a crisis, and secondly on poverty and inequality."

Asked if he expects further announcements on property, after Sunday's anti-speculator announcement, he says: "I hope it's more new housing [moves] because that's one of the immediate things the Government can do on government-owned land that exists through Housing NZ and other agencies. This is buying time while they fix reform of the Resource Management Act and local government."

Hannah McQueen, director of financial advice firm Enable Me

Hannah McQueen.
Hannah McQueen.

Would like to see lower tax rates across the board, offset with capital gains tax on all investments whether business sales, investment gains and/or if people own more than two properties and a tax on foreign owners of property.

Financial literacy in schools. Increase in research and development grants for business innovation, GST on internet purchases.

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Increase pension age to 67 with a 10-year lead-in time, a 'gesture' towards easing the crippling Auckland Housing market.

McQueen would also like to see excess ACC funds released to the taxpayer to increase the take-home pay for the average New Zealander.
He also wants further steps to ease poverty and inequality.

Andy Hamilton, chief executive of The IceHouse

Andy Hamilton. Photo / NZ Herald
Andy Hamilton. Photo / NZ Herald

Hamilton has two things he would like to see in the Budget, noting that the Australian Budget has come out strongly in favour of small and medium enterprises with tax breaks and accelerated depreciation.

Firstly, research and development. "What new initiatives are under way to encourage, support and incent SMEs to get on to the R&D journey, not just hi-tech but our heartland SMEs that with encouragement could become that much more productive. They need help to start."

Secondly, capital markets.

"We are missing a significant opportunity with the Investor Migrant programme. I would like to see 20 per cent of all of the investor funds being demarcated and pooled into an investment fund."

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