The government’s finance minister, Nicola Willis, has delivered this year’s budget, with a series of targeted reforms introduced in an effort to ease short-term economic pressure, while aiding long-term recovery.
This raft of changes, however, has been criticised by the country’s leading retailer organisation, Retail NZ, whose CEO described it as a “missed opportunity”.
Around $3.8 billion of new spending commitments have been announced, against $1.7 billion in savings. The government has funnelled the majority of the spending into defence and health. At the same time, it announced a $450 million fund to provide support in the event of future fuel-related challenges.
In its own fiscal analysis, the government said these changes should amount to a reduction in inflation but a slowdown in GDP growth.
However, Carolyn Young and Retail NZ wished for more to be done.
“We would have loved to have seen the government jump at this opportunity to help give local businesses a leg up – and even generate some revenue – by increasing the new low-value import levy, or by putting an additional tax on products that don’t meet certain ethical and quality standards, such as fast-fashion and low-value goods made in factories with poor working conditions,” Young said.
“The government has set aside $450 million in this budget for additional temporary, targeted support if the fuel situation worsens, but retailers say there needs to be targeted relief for freight users now.”
Young did support some changes, including the increased funding for skills training and police, initiatives that could lower unemployment and stifle retail crime.
“Our police do such important work in taking action against retail crime, which costs New Zealand retailers $2.6 billion each year,” she added. “To see this budget putting $391 million towards frontline policing is vital to ensure our police can continue to do their work and keep our communities safe.”
Retailers are likely to feel unsettled, according to Young, as the announced changes increase the likelihood of an upcoming interest rate hike by the Reserve Bank of New Zealand.
