Anderton's approach is aimed at small businesses

Jim Anderton

As you might expect from the Minister of Economic Development, a discussion with Jim Anderton about his party's economic policies tends to be dominated by the ministry's work. All the more so after National finance spokesman John Key's jab earlier this week when he said a National-led Government would stop grants to small business.

Anderton said the ministry's efforts to help small and medium-sized enterprises (SMEs) was "the elixir of life in terms of New Zealand's business development".

Defending the more than 1000 grants to such businesses during the 2004-2005 year, Anderton said he was focused on helping them to succeed "because they are the key driver in our economy" and needed to get past the kindergarten stage and mature.

On its website, the party says its economic policy "aims to achieve sustainable economic growth of at least 3 per cent each year, on average, over the next 10 years, spread across all regions".

Anderton points out SMEs make up 96.3 per cent of businesses - a figure not significantly different to that in other developed countries.

"But what happens in most other countries is you have some big players around whom all boats rise with the tide."

Through programmes like the HiGrowth Project, the Ministry of Economic Development is concentrating on "a couple of hundred" of the fastest-growing companies.

"Quite a few of these companies will continue to grow if you do nothing. What we're trying to do is do a step change so that you get a fast period of growth."

While the effectiveness of governments trying to "pick winners" and fast-track their growth has come in for some criticism, Anderton said most developed countries had an agency equivalent to New Zealand Trade and Enterprise that worked in partnership with businesses.

"It's not a 'We'll tell you what to do' approach from the Government, or even picking winners - you're working with winners."

The country had suffered in the past from a lack of such involvement.

"Australia and New Zealand were on a par per capita income in the 70s - now they're 30 per cent ahead of us," Anderton said.

"We missed the boat for nearly 30 years. We dropped the ball. Other countries kept going and we stopped. If you look at our performance over those 30 years that's when we lost our way."

Anderton wants to see company tax cut from 33 per cent to 30 per cent "to encourage investment in growth and innovation at a company level".

He believes a company tax cut would be more advantageous to the country's long-term economic development than a personal tax cut, estimating it would take about $500 million a year out of the Government's coffers. But its net impact would be less.

Also figuring highly in Anderton's economic policy are moves to address the labour skills shortage.

"I've put a stake in the ground for education partly because I see the synergy between the education system and growing industry."

Anderton also believes there needs to be a doubling of the number of apprentices in training to 16,000 to meet medium-term demand.