EMA wants ‘integrated’ policies for productivity

WELLINGTON: With the big focus on health, this week’s Budget is unlikely to hold many specific policy initiatives for business to get excited about.

But Employers and Manufacturers Association chief executive Brett O’Riley says the business group’s members will be looking for evidence of a broad, clear strategy to develop the economy and boost productivity.

‘‘What business is looking for is a much more integrated approach from Government,’’ Mr O’Riley said.

‘‘I think what we continue to see is wellmeaning initiatives but they’re just not joined up. So, individual policies which do not connect into anything that looks like coherence.’’

A disjointed approach to policymaking was damaging productivity, he said.

‘‘I don’t think it’s unreasonable for the business sector to expect the Government to make policy in a more coherent way.

‘‘We say you can’t have higher wages without higher productivity. And it’s a fact that one of the reasons for low productivity in New Zealand is the quality of our infrastructure.’’

So, regardless of the political debate about exactly where and which projects infrastructure investment targeted, the Government needed to provide a clear longterm pathway, he said.

‘‘We know from a business perspective that having a consistent and visible project path creates and economic rhythm that allows people to invest.’’

Businesses felt detached and disconnected from the Government’s decisionmaking at the moment, Mr O’Riley said.

‘‘Take water as an example; we’re all vested in a better outcome. But what’s the model for getting there? There has been virtually no partnership with business around the Three Waters at all.’’

Mr O’Riley said he felt the private sector and the public sector had decoupled.

While that might not seem like a Budget issue, it was actually at the heart of ensuring quality spending, he said.

‘‘What I’d like to see from the Budget is: what does the partnership between the private sector and public sector look like,’’ he said.

Some of the things already announced,— such as the extension of the apprenticeship scheme, had been well received by the association’s members, Mr O’Riley said.

In terms of other specific policy initiatives, business would like to see some more

focus on tax depreciation rules to encourage investment in plant and machinery, he said.

Mr O’Riley is one of the cochairmen of the Advanced Manufacturing Industry Transformation plan, which will be launched in June.

‘‘We’ve seen some great case studies of how business has deployed technology to improve productivity,’’ he said

‘‘At the very least we’d like to see some more investment into those programmes. But it does need to be coupled with an environment that doesn’t discourage businesses from investing.’’

With worker shortages and a very tight labour market, everyone seemed to agree more investment in manufacturing technology was crucial, he said.

But the current lending environment was making it very difficult for business to borrow to invest. —