Budget 2024: What business sector leaders think about it

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BusinessNZ chief executive Kirk Hope said this year’s budget was responsible for a time when spending was in areas that set the path for potential economic growth.

This was the general view of many business sector leaders in the country.

“Businesses will welcome the focus on much-needed infrastructure investment while prioritizing education, while New Zealanders should see the immediate benefits of long-awaited tax cuts that will bring the average household income to $102 a fortnight,” Hope said.

Finance Minister Nicola Willis has unveiled a $14.7 billion tax package with tax cuts ranging from $4.50 to $135 a week for earning Kiwis.

Income tax brackets will be adjusted in line with National’s campaigns to save taxpayers up to about $1,043 a year.

“The last review of tax brackets took place over a decade ago. Going forward, we would like to conduct regular reviews to ensure that we do not see bracket shifting on this scale in the future,” Hope said.

He also welcomed increased funding for the Ministry of Regulation, hoping that “businesses will be able to influence change without the burden of unnecessary compliance costs.”

Hope cautioned, however, that the government will have to pursue rigorous efforts to keep spending low if it hopes to return to surplus in 2027-28.

“This year’s budget shows a path back to surplus, but the real test for the government will be the need to maintain tight control of spending with limited operational resources in the 2025-2027 budget,” he said.

Business Canterbury chief executive Leeann Watson said the government had presented a no-frills budget that appeared to focus on getting back to basics.

“In a survey of over 400 companies released earlier this week, companies told us that achieving results on infrastructure, health, education and law and order should be a priority… it appears this was the case,” Watson said.

Watson said businesses would welcome an additional $8.15 billion for health care and education.

“Of course, it is also important that the government continues to pay attention to non-financial measures such as regulation and bureaucracy that hold businesses back, and the newly established Ministry of Regulation will be a key factor in this process,” Watson said.

She said the tax cuts “will help all New Zealanders and will alleviate some of the perceived pressure on the cost of living, which is particularly important for small businesses, which are the growth engines of our economy.”

“The real proof will be the achievement of this budget, and all eyes will be on how quickly the government can complete its so-called ‘recovery work’ for the economy,” Watson said.

Dom Kalasih, chief executive of Transporting New Zealand – the main national association representing road hauliers – said transport investment and tax breaks would be welcome news to its members.

“New Zealand’s roads have been woefully underfunded for decades, so new investment in highways is urgently needed, including high-impact national and regional roads… Kiwis cannot continue to tolerate deteriorating roads that threaten the economic growth that is essential for communities and businesses,” Kalasih said.

Willis’ budget would provide $1 billion in spending to accelerate land transportation projects, including nationally significant roads.

Other transport investments include $939 million to repair roads damaged by last year’s severe weather on the North Island and $200 million to maintain and renew the national rail network.

Another $1.2 billion will go to the new Regional Infrastructure Fund, and the government will also establish a National Infrastructure Agency.

Farmers’ Federation president Wayne Langford also noted that there are no frills or surprises in this year’s budget.

“We are pleased that all non-negotiables remain and that funding continues to support frontline biosecurity, catchment groups and cyclone recovery efforts,” Langford said.

He said farmers simply want the government to continue cutting unnecessary bureaucracy and compliance costs that bind them.

“New Zealand’s road to economic success is not paved with red tape, regulation and compliance costs – it is paved with milk, meat, fruit and grains.

“We need to unlock the potential of our manufacturing sectors that create jobs and earn wages and revenues for the country.”

James Doolan, strategic director of Hotel Council Aotearoa, said reversing the previous government’s cuts to New Zealand tourism funding by using the international guest levy was a pragmatic decision.

“However, HCA would prefer this money to come from a consolidated fund. It appears that the Treasury Department is assuming that the IVL will double to $70,” Doolan said.

“IVL was originally conceived as a way to transform New Zealand tourism through thoughtful investment in conservation and tourism infrastructure. It was not intended to replace existing funding streams.

“Over time, IVL has become a general source of tourism funding with insufficient checks and balances on how funds are spent and whether good results are achieved.”

He welcomed the Crown funding of $4.1 billion for the National Land Transport Fund and $1.2 billion for the Regional Infrastructure Fund.

“High-spending international tourists demand high-quality infrastructure and amenities,” Doolan said.