KEY POINTS:
What does business want from the Budget on Thursday? Lower taxes - and it's looking like this is exactly what they'll get. We ask six business leaders what else should be in Cullen's speech.
CORPORATE
Phil O'Reilly, chief executive of Business NZ:
* A drop in the company tax rate to at least below 30 per cent, with notice of further reductions over the coming year.
* No tax incentives, please - they are a wasteful way of recycling tax dollars. Instead of tax incentives for research and development, it would be better to work towards a more integrated R&D solution, including a better commercialisation process for innovation.
* A drop in the top personal tax rate back to 33 per cent.
* A review of government assistance programmes (such as Working For Families) to determine areas which would be better dealt with by tax changes.
* No narrow-based carbon tax in the electricity sector dressed up as an environmental levy or anything else.
* The establishment of an independent regulatory commission to act as a gate-keeper to reduce the increase in government regulation.
* Announcement of ongoing work to reduce compliance costs following the Quality Regulation Review (including areas that were out of bounds during the QRR process).
* Funding boosts for industry training organisations to meet industry demand for training and apprenticeships.
* Increased funding for NZ Trade & Enterprise and reallocation of funding within NZTE away from regional development and towards offshore and export assistance programmes.
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EXPORTS
Bob Walters, chief executive of Export New Zealand:
* Most of us in exporting and the general business side would be looking for lower taxes and I think that side has been really liking them to be lower than has been indicated already.
* Tax rates dropping to about 30 cents, there is a feeling it is coming down. We'd like to see that lower still, but that is a first priority. I think it is unlikely. Michael Cullen has pretty much indicated that that is not likely to happen.
* We do need to have a serious debate about monetary policy and have the best players around the table to discuss it. Not a select committee, which is just a political exercise that will not promote an outcome that is of any use to business and will not help the problem.
* The decision not to offer tax credits for export market development is disappointing. These would have been useful for the small and medium-sized business, where the cost of items such as airfares and accommodation in overseas markets make it tough.
* We'd probably like to see the budget for NZ Trade and Enterprise increase. If there's not more money going in - that's understandable in a lot of ways - we'd like to see the balance of that cash being spent more offshore, and less regionally and within New Zealand. They've got some damn good programmes, so let's get the money going to those.
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FINANCE
Deborah Carlyon, financial planner director with Auckland-based financial advisory firm Stuart+Carlyon:
* The KiwiSaver voluntary workplace retirement scheme starts on July 1. With no employer information packs from IRD until June, this Budget is the time for the Government to finalise details and make Kiwi-Saver more attractive.
* It's great for first-home buyers, if you qualify, but for others there's very little incentive to join. Don't let the $1,000 Government gift seduce you.
* It's vital to weigh up your situation before opting in or out. If your employer can't be pressured into making a tax-free contribution, all your savings will be from after tax salary. So why lock that money away to age 65? You'll be better off saving into a portfolio investment entity managed fund. It has the same maximum 33 per cent investment tax rate as KiwiSaver but you can access the money any time.
* Unfortunately, tax distortions will continue to lure investors. Rental property expenses can reduce your tax bill and provide a tax-free capital gain when you sell. If politicians don't want to change that, KiwiSaver needs tax incentives to compete.
* Look out for tax breaks on employee contributions to be announced in the Budget. A lower tax on fund earnings would be great. A tighter definition of salary and wages would help avoid a fishhook. I don't think anyone contracting 8 per cent of a salary will be happy when 8 per cent of their annual bonus is locked up in KiwiSaver as well.
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SUSTAINABLE DEVELOPMENT
Peter Neilson, chief executive of the New Zealand Business Council for Sustainable Development, would like to see policies to improve Kiwis' quality of life, including:
* A firm commitment to carbon emissions trading in place as soon as possible and before 2012. This will send price signals to all sectors to manage emissions, and deliver economic, health and other benefits as emissions are cut.
* Progress on user-pays policies, such as a levy to deter solid waste going to landfill and a fund to spark investment in projects to profit from reducing, recycling and finding new uses for waste.
* Popular emissions reduction policies, such as cash incentives to buyers of fuel-efficient, low- emission vehicles, mass insulation of unhealthy homes and a major public-private sector investment initiative to invest in new emissions reduction research and technology with a potential multi-billion dollar global payback.
* Programmes to help Kiwis manage climate change, including ones to advise people how to cut emissions and improve their quality of life, while saving money.
* Tax cuts for businesses and flattening of personal tax levels.
* Policy changes making it much easier for successful New Zealanders to return home and invest here, along with skilled people and wealthy migrants.
* A major roll-out of sustainable procurement by government agencies, redirecting more than $6 billion in state spending into products and services based on their real whole-of-life cost.
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AGRICULTURE
Don Nicolson, vice-president of Federated Farmers:
* Reductions in personal income tax and business tax rates.
* Inflation adjustment of income tax thresholds to proceed.
* A target for core Crown expenses, including contributions to the New Zealand Superannuation Fund, to not exceed 30 per cent of GDP by 2010.
* Research, science and technology funding increased, with an emphasis on agriculture.
* The Land Transport New Zealand financial assistance rate increased by raising the rate of petrol excise tax dedicated to the National Land Transport Fund, and reducing the rate of petrol excise tax that is allocated to the Crown Account.
* New funds allocated to Biosecurity New Zealand for the purpose of controlling animal and plant pests on the DOC estate and other Crown land.
* All spending to provide good value for money, and all policies to be consistent with the goal of improving productivity and competitiveness.
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SMALL BUSINESSES
Sarah Trotman, small business sector specialist and organiser of this month's Small Business Expo:
* The Government has said it's committed to small business owners' success and also talks about the huge contribution made by small and medium-sized enterprises (SMEs). But there seems to be a disconnection between the fantastic work the small business directorate at the Ministry of Economic Development (MED) does as far as policy is concerned and the actual delivery by NZ Trade and Enterprise (NZTE). What I'm chomping at the bit about is the lack of support for the average business owner in NZ who doesn't fit those high growth areas or doesn't have export potential. What about those business owners?
* I would like to see more on offer from NZTE on free training and mentoring. If there was one thing NZTE could do for the average business owner, it's to impress the importance of working on their business.
