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Export manufacturer Murray Fenton can only see dollars draining out of his business under the Budget's business tax and superannuation changes.
Finance Minister Michael Cullen is handing Fenton's Auckland plastics operation a 3 percentage point cut in company tax, but also plans to make it contribute to his workers' superannuation nest-eggs.
Fenton's disappointment in yesterday's Budget is not diminished by the promised tax rebates on those superannuation contributions.
"Employers are now going to be paying a wages and salaries tax [the super contributions] which will equate to quite considerably more than the savings on the 3 per cent on company tax - [unless] you're making huge profits," said Fenton, managing director of Adept.
The family-owned company in suburban Morningside employs more than 100 workers. It produces plastic components used in a range of applications, from healthcare to abattoirs - as well as machining the tools it needs.
Up to 95 per cent of Adept's plastic products are exported, either directly or as parts in equipment made by other New Zealand manufacturers.
"Reducing company tax to 30c - everyone expected that. I think that was an absolute minimum," said Fenton, who believes there is a strong case for abolishing company tax altogether. "To go and put a tax on wages and salaries - what sort of incentive are they giving to employ people and carry on? Where is the encouragement for manufacturers to manufacture here at a time when quite a few are saying, 'We're going to China; we can't employ people here because we can't afford to pay them the rates'?
"Not that I necessarily agree with that philosophy, but it's happening."
Fenton retains a positive outlook for his company, which has worked hard to slot into niche markets where quality and design are crucial and price is not the sole arbiter.
