Grant Robertson should be pumping more investment into projects like Auckland's City Rail Link. Photo / File
Grant Robertson should be pumping more investment into projects like Auckland's City Rail Link. Photo / File
COMMENT:
I want a belter of a Budget that invests large in two particular areas: people and infrastructure.
This means a major increase in public investment in human capital, resulting in highly-educated, well-trained New Zealanders who are fit for purpose in the evolving world of work.
Investment in early stagecompanies; more R&D tax breaks for capital intensive high-technology initiatives; and a push on KiwiSaver funds and the NZ Super Fund to place significant investment behind New Zealand ventures.
When it comes to infrastructure, that means light rail and high speed trains; 5G (fifth generation cellular network technology) so New Zealand can compete in a new global environment underpinned by the Internet of Things, AI and robotics; funding the City Rail Link blowout; completing the roading network; investing in rail to Northport; creating a megaport; fixing up the nation's water and sewage networks; and building smart, yet green cities.
It's what will get us beyond the sloganeering we fall back on as we congratulate ourselves that New Zealand hosts two of the world's "most liveable cities" (why would you expect otherwise from a relatively wealthy Pacific Island nation?)
I would rather see us feature on other indices like the world's cleverest or smartest countries. This is what will help sustain this country — longer term — as a magnet for talent.
Investing in human capital is what will shift the dial and ensure New Zealand can compete hard for global investment in our businesses, in turn underscoring national success.
The Coalition has made a head start by investing directly in people with the increase to family tax credits, child poverty programmes and the like.
But it is the shift to vocational training — and Cabinet should form public-private partnerships here, including on-the-job training — that will make the fundamental difference and instil a new mentality that will allow all who want to, to upgrade their skills in a new technology era.
Finance Minister Grant Robertson. Photo / File
Prime Minister Jacinda Ardern has shelved capital gains taxes — which we are told would have produced additional tax income over time.
Instead, Finance Minister Grant Robertson has created some fiscal slack by shifting the Government's net debt target from 20 per cent of GDP to a 15-25 per cent band which will kick in at the 2022 Budget.
This will not only allow the Government to gear up for substantial investment in major new infrastructure — which includes the need for well-trained workforces — but to draw down debt in case it needs to apply major stimulus if the global economy turns pear-shaped.
Labour should ignore the temptation to use this future fund for a general election spending spree next year.
To flourish as a nation, New Zealand has to offer a highly skilled workforce and world-class infrastructure.
We do not have to accept the fool's gold of continuing to rely on low wages to attract investment.
If there is one lesson from the last decade, it is that cutting personal income taxes at the upper threshold did not result in the wealthy ploughing substantial discretionary income into increasing productivity in companies through new technology and higher wages. But in consumption and property speculation.
The Government is positioning next week's Budget as being about wellbeing.
The descriptor suits the Prime Minister, who said yesterday that the OECD was "watching it closely" because even when a a country is doing well economically, it doesn't always follow that its people are doing well.
At a BusinessNZ luncheon, Ardern spelt out five priorities in front of Cabinet when framing the 2019 Budget:
• Creating opportunities for productive businesses, regions, iwi and others to transition to a sustainable and low-emissions economy • Supporting a thriving nation in the digital age through innovation, social and economic opportunities • Reducing child poverty and improving child wellbeing, including addressing family violence • Supporting mental wellbeing for all New Zealanders, with a special focus on under-24-year-olds • And lifting Māori and Pacific incomes, skills and opportunities.
The Cabinet weighed Budget bids against each of those priorities, asking three questions: Is the Budget bid intergenerational? Will it move beyond narrow measures of success to take wider factors into consideration? And are we taking a whole of government approach?
My interests are more basic.
I want to see individual aspiration rewarded through higher wages and salaries.
Terrific new companies and infrastructure to match the best of Asia or Europe.
That requires a major re-engineering effort.
And a Budget focus on investment. As well as outcomes.
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