John Key Speech - Economic reforms for NZ business





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Uploaded on Feb 4, 2009

The business tax changes the Government announced yesterday can be seen as an exercise in scraping barnacles off the keel in hopes of making the boat go faster.

Tax accountants describe them as welcome, pragmatic and modestly positive.

They are more about reducing compliance costs and easing pressures on firms' cashflows than lightening the final tax burden they face.

In times when people are slower to pay their bills and business is drying up faster than most had expected, even temporary relief to working capital requirements is worth having.

By the same token the cost to the Crown's revenue is modest - as Finance Minister Bill English had foreshadowed.

"Nearly half a billion dollars" sounds a lot until you hear the "over the next four-and-a-quarter years" bit.

Modesty is often a virtue, and not least when it comes to fiscal costs. Especially so in times like these when ratings agency Standard and Poor's, as a proxy for our offshore creditors, is impatiently strumming its fingers on the desktop at us.


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