The eighth budget from Minister of Finance, Bill English, was another “steady as she goes” affair, with many of the major policies being announced in the run-up to the actual Budget release. This Budget continued the conservative economic policies of the current National party Government.
“Predictable” was the label that Minister English used to describe his own Budget. For business in NZ, that predictability is a good thing. Predictability helps all businesses plan for the future.
Infrastructure spending was one of the big ticket items in the Budget, and is always good news for NZ small business. Infrastructure spending means flow-on spending to many supporting businesses, as well to main contractors and their employees. Additional infrastructure spending on new schools ($883M) and roading ($115M) will provide stimulus for economic growth to help NZ achieve the 2.8% GDP growth target set by this Government.
The $187 million small business-friendly tax package is a fantastic step in the right direction for the small business economy. By reducing compliance costs, tax obligations and partnering with the private sector to introduce accounting technology tools, allows small business owners to get back to working on their business.
Science and Technology
There will be $257M spent on tertiary education and apprenticeship programmes, to develop the skilled workforce needed for a 21st century economy. The government is making science, technology, engineering, and maths (STEM) education a priority in education for New Zealand’s future generations. Most of this funding will go to tertiary institutions like Universities, Polytechs and Wananga, to help them grow capability in STEM subjects.
In a great move for trades struggling with shortages of skilled people. There will also be funding for training another 5,500 apprentices. Funding of nearly $10M will also provide trade training for Maori and Pasifika trainees until 2020.
To unlock regional business opportunities and benefit regional communities the Government is spending $94M over the next four years. In fact, $40M of this funding will help Marlborough, Central Otago and Southland develop their own local research institutes. This spending will encourage regions to specialise and transform into centres of excellence. The economic benefits of “clustering” can be huge. Small businesses in these areas should be monitoring this development for an opportunity to slipstream into the economic flow-on.
High-technology businesses that grow out of publicly funded research will get a boost from Government. There will be $12M to help small businesses that start from university research or Crown Research Institutes to grow to commercial success. More funding will also be used to expand the current Accelerator Programme. Another $3M will be spent supporting start-up tech businesses.
Helping start-ups in the early stages is great for the SMB community and for employment. Through this process, start-up founders learn valuable business skills from experts. This assistance helps them grow faster and stronger than they could before.
What else could have been done?
Many New Zealand businesses are challenged by the constant global competition for talent. We need to fill 170,000 roles in the next four years in those sectors, and it’s great to see an opportunity to arm New Zealanders with the expertise needed to fill them. However, we should be looking at other ways to harness our talent across New Zealand.
To have a significant impact on our own sector in technology, we need to think creatively to unlock talent in the short term. Technology tools and fast broadband can allow our local talent to work from anywhere in New Zealand, relieving pressure on housing in the metro areas and creating opportunities for our provinces.
The rollout of ultrafast broadband (UFB) still has another three year to go, assuming it finishes on time. Any move by Government to speed up the UFB roll-out, particularly in urban NZ, will have a positive effect on economic development in NZ. The same applies to uptake of UFB. Just over 50% on NZ premises have access to UFB, but only 10% use it. Government assistance to increase the uptake of UFB would have an immediate impact on business productivity.
If we marking the Budget as Bill English’s school report, what would it say? Maybe it would go something like this…
“Bill has continued to work hard and diligently all year. His work is consistent and sound. For this conservative, ‘steady as she goes’ effort on the Budget, I give Bill an A-. A little more creativity in solutions would have given Bill a better mark.”
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