Business reaction mixed

Michael Turner
Michael Turner
Business will not take a lot of confidence from Budget 2018, Polson Higgs tax partner Michael Turner says.

"The Budget suggests we will see more government, probably more cost pressures, and in some areas more demand for goods and services as the Government spending filters through to purchases from the private sector."

However, there was an interesting position where the tax take was ahead of expectations - suggesting businesses were doing well and the economy was growing at about 3%.

At the same time, business confidence was falling, he said.

Ultimately, if business confidence continued to fall it would drag the economy down with it.

"There was not much in the Budget which will have a positive effect on business confidence."

Research and development incentives had already been discussed.

There was more money for IRD to crack down on those dodging the system, and some bloodstock changes.

The bloodstock changes were minor but disappointing to see what the Racing Minister, Winston Peters, was able to get fast-tracked when there were many more worthy causes out there, Mr Turner said.

Otago-Southland Employers Association chief executive Virginia Nicholls said it was positive the Budget was allowing full tax deductibility for racing industry bloodstock.

"This should be available to all industry, to increase investment in technology, capital and grow productivity and not just racing."

The Budget announces a new unit to oversee compliance with the Resource Management Act to improve consistency across councils.

Mrs Nicholls said problems with the RMA were not solely or mainly caused by inconsistency across councils.

The causes went deeper. Improving consistency of compliance by councils would help address some, but not all, of the issues with resource management in New Zealand.

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