The Business Herald asked each of the political parties represented in Parliament to discuss how to make 2004 a great year for business. Below is the response of Green co-leader Rod Donald.
What would you have liked in your Christmas stocking to make 2004 a great year for your business? A lower dollar perhaps, certainly lower company taxes and less traffic congestion if you're in Auckland. The Green Santa would like to make all those wishes and more come true but unfortunately Michael Cullen has a Grinch-like grip on the Government purse strings and he is not often inclined to let us influence the way the Government contributes to the business climate.
The Green Party recognises that successful businesses are crucial to a thriving economy. The Government's partnership with the business community must include providing essential infrastructure and the right regulatory framework to allow businesses to get on with their business.
Getting our dollar down would be our most significant contribution to making 2004 a great year. But the Government and successful businesses need to plan beyond a 12-month cycle.
So what would the Green Party have put in the business community's stocking for 2004? First up you might be surprised that we are open to a modest cut in the company tax rate, but only if it is accompanied by a suite of eco-taxes.
Green tax policy would shift the burden of taxation off work and enterprise and on to waste and pollution. That means the introduction of a carbon tax on non-renewable fuels (oil, gas, coal), a levy on hazardous substances in proportion to their toxicity, waste taxes, and resource levies on extractive industries and those using the commons.
Like eco taxes, a capital gains tax on all but the family home is worth investigating as it would also send a strong economic signal. At the moment businesses are suffering under the burden of an overvalued dollar and some of the highest real interest rates in the world.
However, the Reserve Bank is not willing to reduce those interest rates because such a move would only fuel the property boom. A capital gains tax would help to shift investment capital from speculative pursuits to productive enterprises.
Another aspect of the New Zealand economy that is undermining good businesses is the Government's fixation with free trade. New Zealand's lopsided international trading relationship is not only the cause of our record $3.2 billion trade deficit for the year to October, but is also why manufacturers are struggling.
When a New Zealand business pays its workers at least $8.50 an hour, meets OSH and ACC requirements, complies with RMA and other environmental standards and will soon pay four weeks' annual leave, it's not fair that the importer next door is landing goods with a labour component of less than $1 an hour and doesn't have to meet the other costs of being a good and responsible business.
It's time we created a level playing field for our own manufacturers and I'm yet to be persuaded that there is any better mechanism than tariffs to protect them from unfair play.
The Government also needs to promote a strong Buy New Zealand-made campaign and lead by example through its own purchasing policies.
Reliable infrastructure is also central to a fertile business environment. The Government is making moves in the right direction.
The recent transport package, plus the Land Transport Management Act, the Land Transport Strategy and the rail buy-back, could future-proof New Zealand's transport infrastructure.
Congestion is crippling Auckland, but an orgy of new road building will exacerbate that problem.
If we can get more commuters and schoolchildren off our roads and on to fast, efficient and cheap public transport and long-haul freight back on the track or ships then Auckland's roads would be freed up and business productivity would increase.
Moving to a green economic framework would create business opportunities for cutting-edge enterprises as well as improving the business climate for all.
Business
