The recommendations in The 2025 Taskforce report released today are mainstream economics and are consistent with what the business community advocates, said Business New Zealand.

The report, headed by former National Party leader Don Brash, recommends cutting government spending to fund tax cuts.

"Business NZ endorses the taskforce's call for a cap on government spending, moves towards an overall top tax rate of 20 percent, and the establishment of a Regulatory Responsibility Act.

"These three moves alone would turbo charge the economy," said Business NZ chief executive Phil O'Reilly.

T he report showed a comprehensive grasp of the factors that could propel New Zealand's economy into higher growth.

Its strength was the focus on government spending, Mr O'Reilly said. There was an overwhelming need for the Government to improve the quality of its spending, he said.

"Not just by encouraging restraint by government agencies, but by transforming its approach to regulation, tax and government services."

The establishment of a Productivity Commission, better protection of property rights and better quality decisions around education and other services would have a significant impact.

"These kinds of policies if executed properly could enhance the capacity to work and the rewards from work for all New Zealanders.

Business hoped that the report's recommendations would be widely discussed by all parties in good faith and without ideological preconceptions.

Recommendations include:

* Replacing the top tax rate of 38 cents in the dollar and business rate of 30 cents in the dollar with a top tax rate of between 20 and 25 percent;

* Limitations on some universal benefits. Those included interest-free student loans and subsidies for early childhood care education;

* The Government to reduce operational spending to 29 percent of gross domestic product by 2012-13;

* Use the NZ Superannuation Fund to pay back borrowing and change the age of entitlement;

* Impose congestion charges in cities to pay for roads;

* No capital gains tax.

The taskforce was set up as part of a support agreement with the ACT Party which has a key policy plank of a flat tax and takes its name from the year that New Zealand aims to catch up with Australia.