OPINION: Uncertain year for businesses

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By Jim Scott

The year began with the Minister of Energy and the Prime Minister announcing their “nuclear moment” by putting a sword through the heart of the oil and gas industry’s development plans.

The lack of appreciation by the Government of the decades of payback needed by major capital investors in this sector is mind-boggling.

During the year the business community was hit by uncertainty with numerous new taxes to support funding the coalition Government’s social policy demands.

This hand-out rather than hand-up approach to social welfare is taking us backwards after 30 years of progressive first world economic reform.

Handouts don’t help build essential infrastructure; training the untrained and upskilling does.

The business community is feeling the threat of again being “fleeced” when the 200+ independent expert inquiries set up by the coalition Government report back to their ministers and the Cabinet.

A possible capital gains tax and the spectre of a return to widespread compulsory unionism, like that of 25 years ago, are decisions that business would almost certainly react negatively to.

The fuel industry has been accused of fleecing the customers, when in fact it can be shown that the real fleecing is excessive taxes introduced by successive governments.

For internationally traded commodities like petrol, taxes usually explain significant differences in market prices between countries. Open competition domestically between several companies, as occurs with petrol distribution in New Zealand, is the only true market system that can be relied on.

The banning of smoking in a wide range of locations has seen a big drop in smokers and is a major step forward towards our smoke-free goal. The retail cigarette market tax levels at around 75% are ridiculously excessive. They simply put cigarette shop staff and their customers in harm’s way.

Alcohol trading, with maybe some tighter restrictions on selling conditions and locations, should continue to produce a stable competitive market. Aggressive policing of impaired driving from alcohol and drugs, with guaranteed periods of incarceration for repeat offenders, is better than the prospect of further tax-driven price gouging by Government.

Late in the year it became clear that the balance of power within the three-party coalition had swung significantly in favour of the Greens. The earlier strong influence from the NZ First “dog and pony” show gradually faded.

Now each piece of legislation, outside of the confidence and supply agreement, is effectively decided by the Greens, who have now established themselves as the balance of power brokers of this parliament.

The year ended with the Government announcing that despite our progress targeting a smoke-free nation and the horrendous road toll for 2018, we will soon have a referendum to legalise marijuana. Going soft on drugs can only lead to more madness and unnecessary human misery!

Timaru resident Jim Scott is a former Air New Zealand chief executive officer and a strategic consultant for small-to-medium enterprises.