The increasing number of Australian companies investing and creating jobs in New Zealand is good for the economy and will help increase incomes, Finance Minister Bill English says.

“For the first time in quite a few years, Australian businesses are seeing competitive opportunities in New Zealand,” he says. “This reflects a number of issues, ranging from the exchange rate, lower business costs, an improving regulatory environment and the positive direction of economic policy.

“That was conveyed to the New Zealand team of ministers and officials at the Australian New Zealand Leadership Forum in Sydney last week, where business leaders said they were encouraged by New Zealand’s economic policy direction.”

Over the past three years, the Government has implemented a wide-ranging economic programme to make New Zealand more competitive.

This includes:

• The Budget 2010 tax package which increased taxes on consumption and property speculation, and reduced taxes on work, companies and saving.
• Improvements to regulation – for example resource management laws, building laws and industrial relations laws.
• The Government’s multi-billion dollar infrastructure programme, in rail, roads, electricity transmission and ultra-fast broadband, to make the economy more productive.
• A focus on changing the incentives around welfare and work.
• Reducing government-imposed costs on business – for example, ACC levies on employers and the self-employed will fall by 22 per cent this year, reducing total costs to business each year by about $250 million.

“This is a long-term programme that will continue over the next few years to improve New Zealand’s competitiveness,” Mr English says.

“We need to encourage companies to invest, and create jobs, including from countries like Australia. This investment needs to come from businesses because the Government simply cannot afford to borrow and spend at the rate of the past decade.

“When capital is invested and management skills improve, New Zealand companies can sell their products for higher prices in overseas markets. It’s a recipe for higher wages, more exports and a faster-growing Kiwi economy.

“By contrast Labour continues to promote its old and unpopular policies that would add significant costs and taxes for businesses, and send the Government deeper into debt. That’s simply a recipe for job losses, higher interest rates and economic stagnation,” Mr English says.