This election has drawn out hefty promises from candidates who are promising large revenue towards government spending. Retail NZ is calling out for the government to pull back on promises that may take away from consumers.
Major parties are reportedly promising to increase Government spending by between $7.6 billion and $25.9 billion over the next three years.
Greg Harford Retail NZ’s general manager for public affairs, says the issue arises with the Government only being able to spend what it takes from consumers.
“While there may be a need for the Government to increase its spending in some areas, the scale of current election promises dwarfs anything we have previously seen.”
“In New Zealand, there are about 27,000 retail businesses, the majority of which are small single-store retailers. Collectively, the sector turns over about $83 billion a year, and employs around 209,000 people – about 10 per cent of the total workforce. The retail sector is under real pressure from competition and constrained consumer spending – and a key factor in that are taxes levied by central Government and rates levied by local councils.”
Harford comments that the Government should be more focused on reducing taxes rather than increasing spending.
“It would give money back to household consumers, who would then be free to make their own spending decisions. It’s likely that any tax relief would stimulate the retail sector, as well as giving households breathing space to repay debt.
“The benefits of reducing spending would likely be substantial – NZ First’s spending plans for new spending alone are about a quarter of total retail spending across the country, and if even only a portion of that were returned to consumers, there would be a substantial boost for the retail sector, and likely the creation of new jobs.”
Harford stresses that Retail NZ is not taking a position of support of any particular party, but is “asking all parties to think about the benefits for retail and the broader economy of stepping back from large election bribes and letting consumers make their own spending decisions.”