On 23 September, the New Zealand government released a long-term economic plan which aimed to achieve the four economic priorities in Our Plan announced by the Prime Minister last year. Eight economic shifts for a more productive, sustainable and inclusive economy have been listed in the plan:
1.Moving the New Zealand economy from volume to value with Kiwi businesses, including small and medium-sized enterprises (SMEs), becoming more productive.
2. Ensuring people are skilled, adaptable and have access to lifelong learning.
3. Making deeper pools of capital available to invest in infrastructure and grow New Zealand’s productive assets.
4. Strengthening and revitalising regional economies.
5. Enabling a step-change for the Māori and Pacific New Zealand economies.
6. Developing a sustainable and affordable energy system.
7. Utilising the land and resources to deliver greater value and improve environmental outcomes.
8. Transforming the housing market to improve productivity growth and make houses more affordable.
To achieve the first shift, the government plans to lift Research and Development(R&D) spending to 2% of GDP by 2027 from around 1.2% in 2017, expand the trade market – not just for goods, services and investments, but also for people and ideas, and support small business. The government plans to reform vocational education to deliver skills that employers need to thrive. As for the regional economies, Provincial Growth Fund, enabling infrastructure and planting one billion trees by 2028 are three main initiatives. The government also expect to support Pacific New Zealand and lift wellbeing by government procurement, Maori-supported projects and Pacific Business Trust. Four initiatives are put forward to achieve an environmentally sustainable and affordable energy system, they are Renewable Energy Strategy, electricity pricing, transport electrification and low emissions policies and National New Energy Development Centre. When it comes to the environmental problems, the plan lists five ambitious reforms, like Zero Carbon Bill and changes to the Emissions Trading Scheme, Essential Freshwater programme and Productive and Sustainable Land Use Package. In order to achieve the eighth shift, reforming the building system and Urban Growth Agenda and Resources Management Act reform are another two initiatives besides KiwiBuild.
Among these initiatives, the tax incentives scheme for small businesses and startup will make sweeping changes to New Zealand business tax rule. At the moment, the costs of looking into a potential business investment–such as buying a new asset or changing the way a company does business – are not tax-deductible. According to the new economic plan, if a business invests in a new product–enhancing technology but that investment does not work out, that business owner will now be able to claim a tax deduction on that cost.
Before the announcement of this new plan, many people have criticized the Labour Government of lacking a long-term economic plan. According to Newshub, Cameron Bagrie, managing director of Bagrie Economics, says industries such as dairy and non-renewables have been taking hits as the economy slowly moves towards a more sustainable growth model. His comments came as Fonterra signalled a $675 million loss for the year. Leader of the Opposition, Simon Bridges, says uncertainty around the economy is “an indictment of the Government’s poor economic management”. Bridges says his party would provide tax relief and invest in infrastructure in order to spur growth. It seems that the so-called over-30-years-ahead plan is released in response to these criticisms and to win more supports from the public.
After the economic plan had been released, National’s Finance spokesperson Paul Goldsmith and Economic Development spokesperson Todd McClay said, the Government’s economic plan is weak, underdone and will do nothing to restore confidence in the economy. Mr Goldsmith said, “Most of the policies are ones the Government has already implemented and are bad for business, like union-friendly industrial law changes, KiwiBuild and Fees-Free”, “The two minor tax changes announced are just tinkering around the edges and will affect very few real New Zealand businesses”. Mr McClay says that in the time it has taken produce this short and muddled document, economic growth has fallen from about three or four per cent a year to just 2.1 per cent. The IrrigationNZ welcome the economic plan but ask for a more comprehensive and effective water management strategy. The utilities of the economic plan will be still waited to see.
The original text of plans mentioned:
文/张梦迪 厦门大学新西兰研究中心