Russell Bell: Budget adopts right approach at a difficult time

First off, I'm gutted that Indigo is closing this weekend. It's a real shame because it was a great venue, with terrific staff and a good menu. Good luck to the owners as they concentrate on Zinc and Oggies.
Current economic times probably played a part in Indigo's closure and that reality had me closely watching the Budget announcement Thursday.
On a national level, the current borrowing level is not sustainable and we all understand that. Be it in business or home life, eventually you are going to have to repay your debts or risk not having the resources when the loans run their term. This is especially so when the spending has non-productive elements which don't generate or sustain income. So now is a good time to sort this issue out.
Under this Budget the forecasts are for return to surplus in 2015. If this can be achieved it will be good news for our economy and for business in general.
It is telling that the Labour opposition have set their sights on the farming sector. Being our lead export segment, farming is keeping us from going the way of Portugal, Ireland and Greece. You don't "kneecap" your most important player so this line is nonsensical and downright dangerous, particularly for a region dependent on agriculture like Wanganui.
For the wider business sector, the changes to KiwiSaver could make an already complicated process more confusing. So, with complexity, there will potentially be higher compliance costs for businesses to ensure that they get KiwiSaver right.
I am pleased to see that broadband remains a priority (I have already mentioned in this column how Wanganui can take advantage of this opportunity) and there will be continued investment in health and education.
The public service has been challenged to find $980 million in savings over the next three years. I hope that the agencies concerned focus on value delivered by processes (lean type models) rather than just trying to simply cut pieces out of existing processes, which will embed inefficiencies.
Another aspect which impacts on business and ordinary folks is the view of the Budget taken by the credit rating agencies, which appear pleased with it. Any downgrade in New Zealand's credit rating would result in higher interest rates which would stunt economic growth and hit businesses in the pocket, potentially leading to limitations to investment. The Budget has been written with this in mind and time will tell whether the economy performs against the KPIs that have been set.
Unlike last year, this is a Budget written at a very challenging juncture for New Zealand. We have had the devastation of our second largest city on top of a global recession to contend with. So on the whole, I am happy with it, although I would have liked to have seen more incentives for business and the productive sector. But I understand the need to be prudent given the financial challenges the country faces.
The Budget seeks to arrest the trend of us spending more than we produce and it is the right approach at the right time.
Zenith Solutions is a Wanganui-based management consulting practice. It specialises in providing strategic planning, business process improvement and financial management services. Contact russell@zenith-solutions.co.nz or phone 021-244-2421.