Business leaders pessimistic on Budget

Businesses fear Budget 2018 will make a dent in the economy, a business confidence report says.

A survey of nearly 500 business leaders by accounting and advisory firm Staples Rodway showed that more than half believed Budget 2018 would have a negative impact on the economy and that the Government’s performance regarding the economy to date had been poor.

Staples Rodway business advisory services director Kaison Chang said businesses were concerned about the Government taking on debt to stimulate the economy.

‘‘The biggest priority was balancing the books. This indicates that if the Budget cannot reassure businesses that the Government won’t be adding to Crown debt, business confidence will fall further,’’ Chang said.

Almost half rated the Government poorly on its economic management so far, with fewer than a third thinking it had done well or very well.

The priorities for businesses were a simplified tax system with less red tape and greater spending in infrastructure including ports, road and rail, and a reduction in the personal tax rate.

Chang said that while there was room for improvement, New Zealand’s business environment was robust.

Earlier this month Finance Minister Grant Robertson promised a surplus resulting from tomorrow’s Budget.

‘‘We are, relative to the rest of the world, a small economy; we have a higher level of risk to manage than other economies and as a result debt levels have to be lower,’’ Robertson said.

He said the Government would be able to do this by cracking down on tax avoidance, slowing down the previous Government’s debt repayment track, and continuing to enjoy a higher than expected tax take.

But at a business event on Monday Prime Minister Jacinda Ardern downplayed expectations and said there would be no surprises in Budget 2018. ‘‘Some might even unfairly characterise it as boring,’’ she said.

BusinessNZ chief executive Kirk Hope said housing and poverty issues were key concerns for Auckland businesses.

‘‘The scarcity and cost of housing in some areas is also affecting the ability of businesses to attract and retain staff,’’ Hope said.

This was also reflected in the Staples Rodway survey.

KiwiSaver was another key issue for businesses. Although more than 80 per cent of respondents supported compulsory KiwiSaver contributions, Hope said businesses should not be forced to pay into the scheme.

Despite an overall negative view on the Budget, businesses expected exports to rise and the dairy sector to remain stable over the next financial year.