Budget 2017 announced today contains some positive measures in the areas of income support and infrastructure, but largely misses the mark in providing real support towards manufacturers and exporters, say the New Zealand Manufacturers and Exporters Association (NZMEA).
NZMEA Chief Executive Dieter Adam says, “We were happy to see the commitment of $74.6 million in additional funding to support Callaghan Innovation R&D grants. However, there is a still a need to improve the grant system – increased funding is great for those companies who are able to access it, especially recipients of Growth Grants. Many small and medium-sized manufacturers, however, are only eligible for Project Grants and most will continue to struggle to access those grants. We believe moving to a much simpler support system for business innovation, based on R&D tax credits, would improve accessibility and further incentivise R&D spending across more productive businesses.
“The Government also still misses the opportunity to introduce an Accelerated Depreciation scheme for productive plant and equipment for manufacturers. This is a relatively simple and largely tax-neutral change which would support our manufacturers investing in improving their productivity and staying up with technology developments. It would also better reflect real life cycles of plant and equipment.
“It was positive to see the changes to income tax levels and, in particular, changes to the accommodation supplement. Many families, especially in main centres like Auckland, are finding that housing costs are increasing faster than wages can keep up. This support is a good move in the meantime to help mitigate the increase in housing costs – people need to be able to afford to live within easy access of where jobs are. It is an ambulance-at-the-bottom-of-the-cliff measure, however, and does not obviate the urgent need to tackle the root causes of our housing crisis, both on the supply and demand side of the equation,” said Adam.