Backing for tax index

Finance Minister Michael Cullen's plan to "inflation-proof" incomes by indexing the threshold rates at which tax rates kick in against price movements is strongly supported by business.

But 70 per cent of those canvassed by the Herald believe indexing should take place on an annual basis, rather than the three-year period Cullen pledged in his May Budget. Only a quarter opposed annual indexation.

They also want the tax system changed to encourage higher savings and investment. NZ Institute CEO David Skilling says New Zealand has the lowest household savings rate in the OECD. Experience elsewhere shows countries that offer financial incentives such as tax breaks have better savings records. "People tend to procrastinate if left to their own devices."

Opinions diverge on the different parties policies.

"NZ First has some interesting ideas ... but he's got to first get back into Parliament," said a finance sector CEO.

Most (81 per cent) back a cut in Government spending.

Forty-five percent rank the effectiveness of current Government spending as "poor".

"The Maori singalong, the Wanaga stuff-ups - this just compounds the image that the Government has lost control of spending to PC idiots," said a Christchurch manufacturing firm CEO.

With trade figures showing New Zealand's export gap with the rest of the world is growing, one Auckland manufacturer suggests it's time to redirect some spending into offering exporters incentives.