'Budget assistance good for trade, but too far away'

By CHRIS DANIELS

Export Institute president Murray Davies says there is nothing wrong with the assistance offered in the Budget - but help does seem just a bit too far away.

More money for trade promotion agency Trade NZ, money going to developing "Brand New Zealand" and a new agency to encourage foreign investment was all good, said Davies. But it provided help in the medium to long term - not now.

Tax incentives, assistance from agencies and less bureaucracy in Trade NZ, were all things that exporters wanted, said Davies, and though assistance through many of Deputy Prime Minister Jim Anderton's plans would add to higher value exports, this would not happen for a few years.

"The negatives are that there are no new tax incentives for the new exports, which we believe would really help the small to medium exporter."

Neither was there any short-term assistance for exporters, despite the help that appeared to be coming in the next few years.

Davies said that the perils of exporting for the majority of New Zealand businesses, which almost always were small, meant a greater appreciation of the assistance needed.

"There are various ways of giving incentives, it helps people to get out there and do the job.

"Most small and medium businesses just cannot afford to go out there into the market and expose themselves to the risk."

Businesses were often prepared to take this risk, but they should be rewarded when they come back with orders, said Davies.

"So incentivise them to go out and get these orders."

One way of doing this was through tax credits, he said.

Part of the problem with Trade NZ's funding is that too much was spent on the bureaucracy of the organisation, he said. There was not enough spent on direct action and direct assistance of exporters.

Davies said he supported the concept of setting up "beach-heads" in overseas markets, where exporters could go to offices already established.

These offices could be used to establish a toehold in new countries, where the cost of setting up a permanent office would be prohibitive.

A new focus on tertiary studies and development of the Brand New Zealand, were all "smart initiatives" said Davies, but paid off in the medium to long term.

Summing up his attitude to the Budget, Davies said there were many things that were good about it and the export industries were in quite good health, with a positive attitude.

"Certainly from the institute's point of view we are in favour of the public and private sector working closer together and that certainly hasn't happened in a long, long time.

"Certainly that feeling came across at the Trade NZ conference last week.

"It's good for the future, it just doesn't get us through the short term."

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