KEY POINTS:
Even with an economic slowdown and a softening labour market, skill shortages remain the number one concern of businesses going into the election, a Business New Zealand survey has found.
Outlining the results of the survey of more than 2000 businesses, Business New Zealand chief executive Phil O'Reilly told the organisation's election conference in Wellington yesterday that 71 per cent said the education system was not meeting their needs.
It was good to hear the Prime Minister acknowledge that the education system was not doing well enough, he said. Earlier Helen Clark had told the conference that "near full employment disguised the unpleasant truth that nearly half the existing workforce does not have the skills to function adequately in the knowledge economy".
"Our school system has been failing too many and that has to change - 30 per cent leaving before the age of 17, 35 per cent leaving without NCEA level II which is the basic entry grade going into the skilled trades," she said.
O'Reilly said the survey also found concerns among businesses about the quality and relevance of tertiary eduction.
The exodus to Australia was a huge concern too, he said. "The economy is not growing enough high-paid jobs."
On innovation, 89 per cent of respondents said that even with the research and development tax credits introduced in last year's Budget they were unlikely to lift spending on R&D.
That result would have been skewed by the preponderance of small to medium enterprises among the survey's respondents, which mostly likely did not do any R&D anyway, he said.
"But the strength of the response [89 per cent] suggests there is an underlying issue there and that the tax credit, while welcome, is no silver bullet."
Clark had said Inland Revenue reported around $250 million of R&D spending had been written off [since the more generous tax credits came in] and it predicted private sector R&D spending would double over the next four years.
Only 55 per cent of respondents supported the free trade agreement with China.
"There's a split between exporters, who see opportunity there, and the many small or medium enterprises who are exposed to import competition and see only the downside," O'Reilly said.
"We would be more bullish and say the FTA is likely to grow the economy overall."
O'Reilly took the survey responses on employment relations as businesses saying they wanted nuanced, not radical change in the area.
Only a small majority, 54 per cent, thought the Employment Relations Act's emphasis on collective bargaining was the wrong way to go.
But 71 per cent were critical of the act's dismissals provisions and 89 per cent said they did not want legislation on work-life balance issues. Opening up accident compensation to competition commanded 61 per cent support.
The survey found 64 per cent in favour of a flatter tax structure.
BUSINESS VIEW
Business New Zealand surveyed 2000 firms.
* 71 per cent said the education system was not meeting their needs.
* 89 per cent unlikely to lift spending on R&D.
* 55 per cent supported the free trade agreement with China.
* 89 per cent don't want work-life balance laws.
