ACC cuts will also benefit small, medium business

Business Hawke's Bay CEO Susan White outside the new business hub in Ahuriri, Napier. Photo / Warren Buckland

Local business leaders are holding their breaths for a boost to the regions in this year's budget, in particular over incentives for innovation.

On Thursday, Finance Minister Bill English will announce the Government's spending plans for the next year.

Hawke's Bay Chamber of Commerce chief executive Wayne Walford said expected cuts to ACC levies were a positive sign for local business.

"There are signs that the Government is working towards improving the environment for business growth and development. Not necessarily tax cuts or grants but, like the ACC changes, reductions in the costs of doing business."

From July 1 the ACC portion of vehicle licensing, or what is commonly known as your car's rego, will drop on average by 41 per cent " depending on the type of vehicle.

Petrol costs will also fall, with the ACC take on petrol dropping 3c a litre from 9.9c to 6.9c. Workers will also benefit with ACC taking a smaller amount of their pay to cover its levies.

Mr Walford wanted to see more money earmarked for innovation in the regions.

"Further investment in innovation, especially around food and added value business opportunities, would be great and would improve the economic environment in Hawke's Bay," he said.

He approved of a capital gains tax on residential property sold within two years of buying it, announced by Prime Minister John Key on Sunday as part of the Budget package. The tax aims to rein in Auckland property prices.

"Changing the dynamics of the housing market in Auckland could be good for Hawke's Bay. This, aligned with strong positive leadership and a positive perception of the economic environment, would be good for Hawke's Bay."

Havelock North Business Association president Sam Jackman said the region's food production sector was deserving of investment in research and development. He cited Havelock North Fruit Company's (HNFC) managing director Phil Alison as an example of a local innovator.

HNFC is experiencing growing demand for its Rockit apples, which are marketed in a clear plastic tube and exported to several countries.

"We've got some extremely talented and innovative individuals in Hawke's Bay," Mr Jackman said.

He also wanted to see more money allocated to the regions for tourism, and tax breaks for small and medium enterprises, which he said could boost employment.

"With tax breaks and assistance, small businesses could employ one or two more people."

Hawke's Bay Business CEO Susan White said innovation helped Hawke's Bay businesses to find a point of difference, add value to their product and command a premium.

"What is there in the budget to help companies get over the hurdle of up-front investment in innovation? That will be a positive thing."

She also wanted to see more collaborative engagement between local and central Government and business.

"Rather than looking at New Zealand as one homogenous region, we need to be asking ourselves what are the particular challenges in this region?"

Meanwhile, Hastings City Business Association manager Susan McDade said, come Thursday, she wanted to see a shift in focus to the regions.

"I would like to see how the Government can encourage wealth and investment to move from Auckland to the provinces, a new focus on domestic migration would be good and further clarity on how we can ease the Earthquake building strengthening burden that Hastings has ahead of it"