northland chamber

Opportunities and Tax Cuts

Last week Michael Cullen gave a speech to the Auckland Chamber of Commerce. Most of the Media comment around this has focused on Tax Cuts and Auckland Infrastructure. In dissecting Minister Cullen’s Speech we actually recognise a couple of positives and opportunities for Northland as well as recognizing some warning signs in the promise of tax cuts.

The Positives

The Minister talked about seizing the enormous business opportunities that will be created by growing consumer awareness of environmental issues. Whether you do or don’t buy into the climate change theory the effects in policy and the way New Zealand Inc does business has to adapt to this changing business environment. From the Ministers Speech we recognise that there are potential opportunities for Northland to actually lead the way in promoting ourselves as the first Carbon Free Region in New Zealand. What opportunities would this lead to for your business? Do your customers – insist and deal with ‘environmentally responsible’ businesses? There are power companies in NZ now that are seeing a raft of new consumer accounts simply because they have taken steps to explain how environmentally aware they are.
The Northland Region has already signed the Sustainable tourism charter which basically says that we will provide first class visitor experiences in Northland however not at the cost of our environment now and more importantly in the future.
Another opportunity the minister alluded to was the willingness to enter into Public Private Partnerships to ensure major infrastructure is carried out. Could this assist Northland in bringing decent data connections up this way? Further roading improvements? Rail links?

In our recent local body elections the number of councilors supporting the PPP model were in the majority.

The Warnings

Recently the Chamber of Commerce and other business associations provided a submission to the Government on what they would like to see come out of the 2008 Budget in regards to taxation.

The joint proposal was based on the view that the main outcome of the budget should be a narrower gap between the top personal and company tax rates. Aligning the top personal, company and trust rates at 30% would have major benefits for the economy and New Zealanders.

The main criteria adopted by the Chamber in developing this submission were to reform business taxation in a way that would benefit New Zealand’s Economic Growth and make New Zealand Tax structure internationally attractive especially in line with Australia.
In speaking to the Chamber of Commerce last week Michael Cullen said “Labour will deliver tax cuts because it is fair - money that we do not need to meet our obligations to New Zealanders should not be held indefinitely in crown accounts”. Unfortunately Dr Cullen could not give specifics around his proposals. Therefore no indication of the amount of tax cuts, for whom and by when. In fact the ‘tax cut ‘ announcement is conditionally made on the premises of four underlying ‘catch 22 type’ principles each of which should give any Government an out of the promise over the coming years.

The Northland Chamber of Commerce has to ask this simple question. If the same Finance Minister from the same party is saying roughly the same things and pushing the same message as before the 2005 election and the result was a very timid movement on business taxation then why should the business community and industry believe that the Finance minister has any other intention other than past performance?

The Northland Chamber of Commerce would like to see BOLD commitment from our future political leaders and reemphasise the call from a multitude of business groups from the past few years namely an alignment of the top personal tax rates with the company rate of 30%.

We encourage all political parties to specifically outline the tax (cut) policy well in advance of the 2008 election so that reasonable people may be able to make decisions based on solid data as opposed to vague promises.

The Northland Chamber of Commerce is the networking, education, advocacy and marketing group for Northland business, and is part of a nationwide network of 30 and a world-wide movement of 21,000 chambers. Subscription to the free fortnightly chamber e-news can be arranged on info@northchamber.co.nz. Enquiries to 09-4384771 or www.northchamber.co.nz, www.kaiparachamber.co.nz and www.farnorthchamber.co.nz
You can have a say on this by going to the Northland Chamber of Commerce Feedback website on www.northchamber.blogspot.com