Hope for benefits from infrastructure investment

No frills or surprises — that’s how business leaders have described Budget 2024.

While it is difficult to see immediate benefit to businesses across the region, Business South chief executive Mike Collins echoed a comment from BusinessNZ chief executive Kirk Hope that a responsible approach to spending in areas that had the potential to significantly improve the country’s economic growth would benefit businesses in the long term.

If the South could tap into the government’s investment in infrastructure then that would also be beneficial to the business community, Mr Collins said.

Being able to engage with the Ministry of Regulation would hopefully influence some positive change for SMEs around compliance burden, he said.

When it came to Shane Jones’ Regional Infrastructure Fund, the big message across Otago was to be very clear about what the priorities were as a region so a united front could be presented and Business South would help facilitate that, Mr Collins said.

An investment in education and health was "fantastic to see" and he expected the whole community would get behind and understand the reasons for that, he said.

Mr Hope said the government would need to be rigorous about keeping expenditure down if it hoped to return to a surplus by the 2027-28 window outlined.

Business South says investment in infrastructure will benefit the business community if Otago can...
Business South says investment in infrastructure will benefit the business community if Otago can tap into it. PHOTO: GETTY IMAGES
"This year’s Budget presents a path back to surplus, but the real test for the government will be the need to maintain a tight grip on expenditure, with operating allowances for Budget 2025-27 being tight. Closely managing within future allowances will be necessary."

To obtain revenue, increase employment and be able to better invest in areas that desperately needed it, New Zealand must boost productivity and grow its economy, Mr Hope said.

"That’s why the government should be encouraging business development at every turn. BusinessNZ welcomes the increase in funding for Ministry for Regulation and looks forward to working together to ensure businesses are able to effect change without the burden of unnecessary compliance costs."

The last review of tax brackets was more than a decade ago and BusinessNZ would like a regular review to ensure a bracket creep of that scale was not seen in the future, Mr Hope said.

Westpac senior economist Darren Gibbs said the bank believed that sustained spending restraint might well prove more difficult than assumed in Budget 2024. Attainment of an obegal — operating balance before gains and losses — surplus in 2027-28 was "far from certain", Mr Gibbs said.

ASB senior economist Mark Smith said the Budget was a "solid start" but more work needed to be done.

"Fiscal policy has a key part to play in the economy and the restoration of fiscal buffers is needed given future challenges."

Federated Farmers national president Wayne Langford said money had been tight for farming families and rural communities for a while and it looked like that economic reality was starting to hit home for the rest of the country.

Farmers had been struggling with reduced incomes, rampant inflation and out-of-control compliance costs, he said.

The rural lobby organisation was pleased to see all the "non-negotiables" were still there, funding continuing for frontline biosecurity, catchment groups and the cyclone recovery.