Budget 2022: Business wants quality spending to boost economy, productivity

With the big focus on health, this week's Budget is unlikely to hold many specific policy initiatives for business to get excited about.

But Employers and Manufacturers Association chief executive Brett O'Riley says the business groups members will be looking for evidence of a broad, clear strategy to develop the economy and boost productivity.

"What business is looking for is a much more integrated approach from Government," O'Riley said.

"I think what we continue to see is well-meaning initiatives but they're just not joined up. So, individual policies which do not connect into anything that looks like coherence."

A disjointed approach to policy making was damaging productivity, he said.

"I don't think it's unreasonable for the business sector to expect the Government to make policy in a more coherent way,"

"We say you can't have higher wages without higher productivity. And it's a fact that one of the reasons for low productivity in New Zealand is the quality of our infrastructure."

So, regardless of the political debate about exactly where and which projects infrastructure investment targeted, it needed to provide a clear long-term pathway, he said.

"We know from a business perspective that having a consistent and visible project path creates and economic rhythm that allows people to invest."

Business felt detached and disconnected from the Government decision making right now, O'Riley said.

"Take water as an example; we're all vested in a better outcome. But what's the model for getting there? There has been virtually no partnership with business around the Three Waters at all."

O'Riley said he felt the private sector and the public sector had decoupled.

While that might not seem like a Budget issue, it actually went the heart of ensuring quality spending, he said.

"What I'd like to see from the Budget is: what does the partnership between the private sector and public sector look like," he said.

Some of the things already announced - such as the extension of the apprenticeship scheme had been well received by EMA members, O'Riley said.

In terms of other specific policy initiatives, business would like to see some more focus on tax depreciation rules to encourage investment in plant and machinery, he said.

Deputy Prime Minister Grant Robertson will deliver Budget 2022 this Thursday at 2pm. Photo / Marty Melville

O'Riley is one of the co-chairs of the Advanced Manufacturing Industry Transformation plan, which will be launched in June.

"We've seen some great case studies of how business has deployed technology to improve productivity," he said

"At the very least we'd like to see some more investment into those programmes. But it does need to be coupled with an environment that doesn't discourage businesses from investing."

With worker shortages and a very tight labour market, everyone seemed to agree more investment in manufacturing technology was crucial, he said.

But the current lending environment was making it very difficult for business to borrow to invest.

"If we know that investment in technology and automation doesn't mean job losses, it actually means upskilling people and moving them into a higher wage bracket, then let's get on with it," he said.

"Let's get some integration around that."

• The Herald will stream Budget 2022 live from 2pm on Thursday followed by comprehensive reaction and analysis.