Our views on the 2011 Budget

Robin Whalley, Director of Business Development Company shares his views on the 2011 Budget

On Friday the 20th, the day after the 2011 budget I attended the Regional Job Summit held at NMIT.

The guest speaker, Amanda Lynn who heads the economic research organization BERL clearly stated that tourism is a low productivity sector and not one that Nelson should be focusing on for growth. See Nelson Job Summit.

She is right. We should all be extremely concerned therefore at Prime Minister John Key’s emphasis on the sector for growth and boosting wealth, it won’t. Tourism only creates $80,000 in revenue per job annually. Compare Fonterra which produces $350,000 per job annually, and Apple Computers that produces $1M per job annually.  See Innovation-needed-to-boost-economy.The more tourism we do, the poorer we will get.

In order to grow the NZ economy, we need to grow innovative companies. Last year, these companies earned New Zealand around $4 Billion in exports.What we need is another 100 of these.

Nelson has more than its share. We have so many clever people in Nelson Tasman who have grown companies like Brightwater Engineers, Titan Slicer and Nelson Honey. This is where the emphasis should be. Not tourism.

The other disappointing aspect of the budget is the further tinkering with Kiwisaver.This is a complete blunder.

Australia’s Superannuation scheme has saved and invested $1.2 Trillion. That makes them less reliant on overseas capital. If Robert Muldoon hadn’t cancelled our own scheme in 1975, we would be even wealthier than the Australians.

It has taken decades (Since 1975 at least) for the public to come to trust the government. It had the formula right.

And to say the scheme is unaffordable is specious. After all, the last two tax cuts cost $2.46 Billion.

Overall the budget was disappointing in that the lack of emphasis on innovation, and removing obvious the regulatory road blocks to innovation were not addressed.