Short-term discipline is expected to accompany the government’s budgetary roll-out with only the odd titbit likely to be thrown their way.
Among pre-Budget announcements are plans to cut public service jobs, a social housing overhaul and cheaper loans for businesses to wean themselves from gas.
The prospect of large hand-outs appears limited as the Iran war ramps up fuel costs and concerns about inflation and cost of living rise.
Instead, Business Canterbury is pushing its case for a Budget lifting productivity, encouraging investment, and supporting ongoing economic growth through productivity-focused policies and AI support.
Chief executive Leeann Watson said businesses were not expecting a big spend-up.
‘‘The message has been pretty clear: there is no money to splash around.’’
She said the business community was seeking continued cost management with clear priorities and a government operating efficiently in the same way the private sector had the past five years.
‘‘[Making] a difference in reducing costs, driving greater productivity and efficiency will ultimately help the business community get on and do what they need to do which is drive our local economy.’’
But businesses also wanted the government to keep one eye on the future.
The risk of becoming too reactive to the Middle East conflict was missing out on opportunities, so the right environment needed to be set for long-term growth, she said.
Among opportunities identified are expanding the Investment Boost policy introduced by Finance Minister Nicola Willis in last year’s Budget that allowed businesses a 20% tax deduction when investing in new assets, in addition to depreciation.
Business Canterbury would like this widened to second-hand assets and the claimable percentage increased.
‘‘At the moment second-hand assets are not included and yet there are businesses that spend a significant amount of money on second-hand pieces of equipment — and they should be [deductable] if the aim is to increase productivity through investing in more plant and equipment.’’
Raising the instant asset write-off threshold from $1000 to $20,000, as is the case in Australia for small businesses, was expected to improve cashflow and reduce barriers to investment when the economy is tight.
Ms Watson said the government would hopefully announce other changes today to drive productivity.
‘‘Obviously they have made a few announcements over the last couple of weeks. I think it will be about continuing to support small businesses in ways that help them with AI and technology adoption.’’
She said there was strong evidence AI tools were improving bottom lines and the government should support this to increase access.
A Productivity Propelled report by 2degrees and Deloitte shows small and medium enterprises using AI are earning, on average, about 4.3% more revenue each year than non-users.
Mrs Watson said manufacturers vulnerable to the Middle East conflict were facing freight connectivity challenges in roads and ferries.
She said it was good to see the debate on four-laning the highway south of Christchurch on the agenda — and the Rakaia bridge needed to be part of that.
‘‘How much we will see from the Budget around that I’m not sure, but we want to make sure they focus on continuing to invest in our infrastructure ahead of demand, particularly here in Canterbury. We had a discussion the other day with a member who said it was cheaper to send a container of goods to Malaysia than what it was to Auckland.’’
The early indications of a Business Canterbury survey are higher fuel prices were having an impact on businesses, but not significantly yet.
Most businesses were expecting a profit drop of less than 10% over the next financial year.
Ms Watson said the next quarter year might show if the flow-on impact would hit harder, but businesses were thinking creatively, such as transport companies reducing deliveries to save fuel costs without impacting services.
She said Business Canterbury had received no signs of business closures.
