A survey of 880 businesses and seven political parties reveals that the high cost of doing business is the most pressing issue for New Zealand enterprises ahead of the general election. The survey, conducted by BusinessNZ and sponsored by Deloitte and Chapman Tripp, also shows that businesses are not in favour of increasing taxes to address the country’s fiscal challenges.
Businesses Feel The Pinch Of Government Policies
According to the survey results, 93 percent of respondents said that changes made by the Government had increased their cost of doing business. These changes include the minimum wage increase, the extension of sick leave entitlements, the introduction of the digital services tax, and the tightening of immigration rules.
Moreover, 85 percent of respondents said that they did not think that the current Government had a plan for improving the country’s economic performance. The survey also found that businesses were dissatisfied with the Government’s handling of the COVID-19 pandemic, infrastructure development, and environmental issues.
BusinessNZ Chief Executive Kirk Hope said that businesses were looking for a clear and coherent vision from the next Government to address the challenges facing the economy. He said that businesses needed certainty, stability, and support to recover from the impact of COVID-19 and to invest in growth and innovation.
Businesses Reject Tax Hikes To Balance The Books
The survey also highlighted a high degree of business interest in tax policy issues and clear views about proposed tax changes. Respondents were reluctant to endorse proposals for changing business-related tax policy either through introducing a capital gains tax (61 percent against), a wealth tax (67 percent against), or a windfall tax (70 percent against).
Many were also against changing GST (75 percent against) or corporate tax (60 percent against) as part of a policy prescription to address current fiscal challenges. The compliance cost of business tax was also a significant concern for many, with 64 percent of respondents saying that their tax compliance costs had increased over the last three years.
Businesses have shown that they have a high level of understanding of taxation options and trade-offs, sending a clear message to political parties seeking to raise taxes to address current fiscal challenges.
Businesses Want Better Infrastructure, Resource Management, And Investment
The survey also revealed business thinking on infrastructure, resource management, and investment – policy areas that can deeply affect the environment for business. Respondents identified infrastructure as a key priority for the next Government, with 89 percent saying that it was important or very important to improve New Zealand’s infrastructure.
However, only 28 percent said that they were satisfied or very satisfied with the current state of infrastructure in New Zealand. Businesses also expressed frustration with the Resource Management Act (RMA), with 78 percent saying that it was an impediment or a major impediment to their operations. Businesses called for reforming or replacing the RMA to streamline and simplify the consenting process.
Furthermore, respondents indicated that they wanted more support for investment in New Zealand, especially in areas such as research and development, innovation, skills development, and export promotion. Businesses also favoured policies that would encourage foreign direct investment and reduce barriers to trade.
Deloitte Chief Executive Mike Horne said that respondents identified major structural challenges that would need to be addressed by any post-election government. He said that some responsibility also lay with the business community to work alongside government to facilitate and support the change that was needed. He said that it was much easier to navigate these shifts in a strong economy – something that the post-election government would need to address first.
