Michael Barnett: Time for Cullen to change gear

Many businesspeople preparing to listen to Dr Cullen's fourth successive Budget are still wondering.

His first three Budgets have made two big calls, which generally have been supported by business:

* A strong commitment to sound fiscal management, reflected by prudent operating balances to ensure reduction in debt and an emphasis on generating a surplus.

* An equal commitment to the transformation of the economy aimed at lifting living standards and New Zealand's ranking as a member of the select club of rich nations.

But in those three years the supporting action plan has been missing, with the result that we have fallen further behind nations we benchmark ourselves against, such as Australia, had two winters of energy shortages and face a deepening transport crisis.

Whether it is Auckland's transport, the rail network across the nation, or water and power shortages, Dr Cullen's tenure as Finance Minister has been dogged by having to dream of building a first-world economy using third-world infrastructure.

The erosion of basic infrastructure cannot be allowed to continue if we are at all serious about getting New Zealand's living standards back into the top group. This year's Budget is the place to stop the rot.

Business is looking for a Budget where Dr Cullen takes on the role of the surgeon, with cuts to permanently solve our persistent basic infrastructure problems. For decades, New Zealand has under-built its core infrastructure.

We have shortchanged ourselves in the provision of transport networks. From the day it opened, the Auckland Harbour Bridge lacked the capacity to meet demand, and it has been the same across the network.

Similarly on energy, all the rhetoric and analysis of this winter's looming energy crisis cannot hide the fundamental reality that we lack enough generating hardware. We desperately need a "catch-up" budget.

It is equally stupid that we keep our heads in the sand by not taking up the opportunity to outperform neighbour Australia and other nations we compete against for investment, skilled jobs and businesses by offering matching, if not lower, corporate tax rates and compliance costs.

If Dr Cullen wants to give business basic confidence about investing long-term in New Zealand's future, this Budget will be about providing the funds and mechanism to:

* Build a new large-capacity fossil-fuel burning power station.

* Complete Auckland's integrated and ailing provincial transport networks and allow private investors to participate.

* Provide a competitive corporate tax and compliance regime.

Despite the uncertain international outlook, Dr Cullen's time has arrived to brand himself to future generations as someone who pioneered a resurgence in New Zealand's growth and development prospects.

It is a sure bet that his fourth Budget will again re-emphasise the long-term goals detailed last year of returning New Zealand to the top half of the OECD and keeping the books in good shape.

Fine words, but business and the nation know the goal will not happen without firm leadership from Dr Cullen, leading to solutions.

* Michael Barnett is chief executive of the Auckland Chamber of Commerce and Industry.