BNZ boss wants tax changes to boost savings' appeal vs housing and property
CEO BNZ Andrew Thorburn is calling for tax incentives to encourage saving.
The CEO said the government's budget is generally positive, but must address low savings rate in order to help insulate the economy to external shocks.
"The tax system has to change so that it fundamentally incentivises or at least equalises the options that people have. At the moment, if you are a residential housing investor, your effective tax rate is a lot lower than if you have money in the bank or you get dividends from a company. So it's just people are doing what's rationally correct," Mr Thorburn said on TV3's The Nation.
Increasing Kiwi Saver contributions, making them compulsory, and providing more opportunities for New Zealanders to invest outside the residential market would encourage saving, said Mr Thorburn.
CEO of independent co-operative, Tatua Dairy, Paul McGilvray said, despite drought and a high New Zealand dollar, he was confident his industry had a positive outlook for next year.
"Yeah, the drought I think was a sort of a small picture story with respect to individual farmers. They had a bit more cost, but in a macro sense, I mean, milk production this year will probably only be down half a percent on last year. Last year was a record. From my company we probably had the third or fourth biggest milk production in our history," Mr McGilvray said.
He said the high dollar is a big issue for the export industry, but New Zealand businesses can manage it.
"I think we have to put it into context, you know. There are a lot of things that are big issues for us. Entering export markets and regulations and so on and so on are big issues. In some ways, I think we see the exchange rate or high exchange rate as almost being the price of success, and I think businesses are adapting to it, and although none of us would wish it, I think we've got to shape our businesses to deal with that."
Interim CEO and Director of the construction and infrastructure company Hawkins Group David McConnell was also positive about the budget. Mr McConnell believes the construction industry could cope with the big demands in Christchurch and in the Auckland residential market.
"The key thing here is for us to take advantage of this pickup and get quality supply chain by training through key people. You know, I welcome the 43 million that's going into Maori and Pacific training. I think that's really critical and the more time that we have to be able to plan, the better off we are able to be able to grow that capability internally," said Mr McConnell.