Media Release: Very little for business sector in Budget 2017
With the exception of corporate welfare (which taxes all businesses more, to divert grants to favoured businesses and industries) the business-friendly initiative which features in the Budget announcements is a single proposal to allow deductibility of capital investment 'viability expenditure'. The Government has announced $372.8 million of new operating funding for ‘Innovative New Zealand’, including $74.6 million for Callaghan Innovation’s ‘Growth Grants’.
Jordan Williams, Executive Director at the Taxpayers’ Union, says: “Today’s Budget continues to grow the corporate welfare empire, so the likes of Oracle Racing and Rocket Lab USA are the winners with everyday Kiwi firms paying the price.”
“Despite recent damning reports about the management and decision-making at Callaghan Innovation, the Government is pumping more of our money into the organisation’s grants.”
According to Jim Rose’s report based on the Budget 2016 numbers, if the Government’s corporate welfare regimes were abolished, enough money could be saved to reduce the company tax rate from 28% to 22%
Responding to Minister of Revenue Judith Collins' announcement of a proposal to address blackhole expenditure, Mr Williams says, “This proposal relates to feasibility expenditure which is currently unable to be deducted, but also unable to be depreciated. Businesses in project capital intensive industries will welcome this, but the fact it isn’t even costed yet suggest that it is a long way from being implemented."
“This is a Budget which has largely ignored growing New Zealand’s enterprise and productivity. The ‘once in a generation opportunity’ mooted by the Prime Minister in his budget speech, appears to be a missed one.”