Sector welcomes levy reductions, growth focus

A family-friendly Budget also provided good news for businesses, Deloitte Dunedin tax partner Peter Truman said yesterday.

Commenting after Finance Minister Bill English delivered his sixth Budget, Mr Truman said businesses often bore substantial compliance costs when the law changed and the lack of change would be welcomed by many businesses.

''Not having to devote time to altering their processes when the law changes allows for time and effort to be available to enhancing and growing their business.''

The Budget did appear light on specific initiatives to create jobs or to encourage businesses to take on new staff, Mr Truman said.

The reduction in ACC levies was welcome.

The Budget indicated ACC was on track to provide further levy reductions of about $480 million in 2015-16. Mr English said final decisions on the levies would be made after public consultation by ACC.

Depending on the outcome, the average levy for a private motor vehicle could fall by about $130 a year from July 1, 2015.

Mr Truman said business had been through a period where ACC had been building reserves in a climate where many businesses were focusing increased attention to health and safety matters.

''It is good to see there are savings in ACC levies available as a result.''

The abolition of cheque duty, at a cost of $15.5 million over four years, had presumably resulted from a large reduction in the number of cheques being removed, he said.

With more electronic transactions occurring, cheque duty had become less relevant. It followed a process of many duties being progressively repealed during the past decade or so.

A further expansion of research and development expenditure to include some current ''black hole'' spending was long overdue.

Deloitte would encourage the Government to keep addressing other instances where black hole expenditure arose, to allow businesses to get a tax deduction for legitimate business expenditure.

Otago Chamber of Commerce chief executive John Christie said the chamber was pleased economic indicators showed increased employment, higher wages and greater consumer and business confidence.

''We are encouraged the Government sees the repayment of the net government debt as a priority as it returns to surplus.''

The additional funding into the Christchurch rebuild would have national and regional benefits, he said.

The chamber saw the importance of the rebuild and its flow-on benefits to the South Island.

Additional funding for New Zealand Trade and Enterprise, with a focus on expanding globally competitive firms, supported initiatives already the focus of Dunedin's economic development strategy.

''We are encouraged this Budget retains the focus on building a productive and competitive economy and, in particular, the Government's business growth agenda,'' Mr Christie said.

Mr Truman said the Government appeared to be keeping something back that would presumably appear once the election campaign got into full swing.

''There is likely to be a large difference between the Government and Opposition parties on tax policy during the election campaign,'' he said.

''Significant tax change is likely to be ahead if there is a change in government later in the year.''

 

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