Business sentiment and the 2017 election
Business is relatively happy with the policy direction of New Zealand but wants some key changes.
The findings of the Deloitte BusinessNZ Election Survey* were presented to 300 business leaders and representatives of the main political parties at the Deloitte BusinessNZ Election Conference held in Wellington today.
This year’s survey shows the business community is relatively satisfied with current policies for economic growth and international trade, with the effectiveness of Government spending, and with the current structure of the tax system.
But businesses want lower tax, more access to skilled staff and better performance from the education system, along with more help with research and development. They want better outcomes from local government and the Resource Management Act, more spending on infrastructure and more focus on regional development.
BusinessNZ Chief Executive Kirk Hope said the areas where business wants change are related to the current growth environment.
“New Zealand’s positive GDP performance is good for business and employment growth, but it’s also a stress factor. Many businesses can’t fill job vacancies and want to see more better-skilled New Zealanders coming out of the education system. Positive economic growth has also brought strains on transport and other infrastructure and on planning processes that are felt acutely by business. They want to see better local government decision-making and an improved RMA. Businesses want policies that help them take advantage of the growth environment.”
Deloitte Chief Executive Thomas Pippos said also notable was that business is softening its views around a number of social issues.
“Businesses surveyed seem open to change on some social issues. A majority of those surveyed say the conditions that led to Brexit, Trump and the rise of populism in Europe are becoming an issue in New Zealand. More respondents also say socio-economic wellbeing is a key indicator of economic performance than at the last election. And a number of business leaders indicated that they would support an increase in taxation if those funds were used to fund social investment. Finally, more employers also support a minimum wage set at a ‘living wage’ level than before. Overall we are seeing a greater sensitivity to the social environment and the role it plays in maintaining predicable policy settings that businesses like.”
Key findings in the 2017 Deloitte BusinessNZ Election Survey include:
- Corporate tax - 48% are in favour of reducing business tax to 20%, while 39% are opposed
- Capital gains tax - 28% are in favour of a capital gains tax; 59% are opposed
- Income tax - 76% are against increasing the top rate of tax (but 66% would support an increase if spent on transport infrastructure and 55% would support an increase if spent on social investment)
- Foreign investment – 53% are satisfied with policies for attracting foreign investment; 23% would like to see more foreign investment
- Immigration - there is a split in opinion on whether ImmigrationNZ has got the balance right in letting skilled people into New Zealand (28% say too many are being let in, 19% say not enough are being let in, and 33% say the balance is about right)
- Resource Management Act – 36% say the RMA is broken and should be replaced; 30% say it could work if it constrained what councils can regulate; 28% say it could work if planning processes were shorter
- Infrastructure – 60% say more should be spent on infrastructure; 64% want infrastructure provided by public-private partnerships
- Local government – 65% want councils to focus on core services (local infrastructure and goods & services that can’t be provided more efficiently by business)
- Skills – 61% are unhappy with the skills of young people coming out of the education system
- Regional development - 77% want a regional economic development plan
- Sustainability incentives - 51% want the Government to provide incentives for cleaner production and resource efficiency
- Wage bargaining – 69% do not agree with the focus on collective bargaining in the Employment Relations Act
- Living wage (i.e. a minimum wage of $20 per hour) – 91% would be prepared to pay this in the near future