Budget must give business confidence for NZ recovery

Budget must give business confidence for NZ recovery

At today’s annual Pre-Budget address, Finance Minister Grant Robertson previewed the Government’s 2020 budget release next week.

Spending planned for the five priority areas outlined in the Budget Policy Statement has been re-assessed, with the Minister signalling that planned expenditure in these areas will be ‘put on ice’ if they are not a core cost pressure. The Minister also emphasised that the Government will be running operating deficits for the foreseeable future and allowing Crown debt to increase beyond previous targets.

"An increase in Government debt comes as no surprise," says John Milford, Wellington Chamber of Commerce Chief Executive.

"But we need to make sure what’s borrowed goes into investment that’s made in the right places. The measures to date have seen New Zealand through the short-term, the wage subsidy and small business support are working to keep businesses open and employees connected to their employer.

"But come next Thursday, when the Budget is announced, the Minister will need to elaborate on the strategy going forward. Businesses need to know what the medium-to-long-term plan looks like.

"It's causing a lot of uncertainty in the community as many businesses are just now, coming out of lockdown and starting what will be a long and difficult journey of recovery.

"Going forward we need to see a more targeted, sector approach to government support.

"Retail, hospitality, tourism, events and entertainment; these are all sectors that could use an extra hand up. Whereas there will be some, like the primary foods and export sector, who are doing relatively okay at the moment.

"Reopening our border to Australia would certainly help the recovery process along, and doing so should be one of the country’s priorities in the next few months.

The Prime Minister’s subsequent advice on what level two, released following the Pre-Budget address, is also welcomed by the business community.

"Level two will see more businesses reopen, and at greater capacity, but the rules are still revenue restricting, especially where businesses are unable to adapt.

"While it’s a ‘new normal’ we must do all we can to quickly move out of level two as quickly as possible.

"To do this safely, we need to crack on in implementing a comprehensive tracking system. Pen and paper lists just aren’t going to do it. Without an effective tracing system, I don’t think many Kiwis will be confident commuting and going out in public.

"We will be getting the relevant information out to its members over the coming days, but we want to emphasise the Prime Minister's point to follow the social distancing guidelines and other rules around reopening. If businesses are not complying, they will be forced to shut. No if or buts.

"The absolute worse situation for the economy would be if we had to go back to level 4."

Contact: John Milford

Phone: 027 580 3064

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