According to the Dominion Post Michael Cullen is to announce three years of tax cuts and provision for more. He is also going to give the Auckland Chamber of Commerce details of a planned $1 billion-plus "Waterview Connection" tunnel and motorway link on Auckland's Western Ring Route, which could be a private-public partnership partly funded by tolls.
This is all good stuff. In both cases the initiatives are too late, and in the case of the tax cuts, probably too little, but this is good policy at last. Both policies will contribute to growing productivity. Increased productivity = the potential for sustainable higher wages and that is the real solution to the brain drain to Australia and elsewhere. The Dominion Post has written a strongly worded Editorial on this topic today and seems to blame both Government and business for the problem. The Hive accepts that some businesses could do more, but is firmly of the view that too much tax, too much Government and too little investment in key infrastructure is the major cause of our productivity performance being below what it should be. These are beyond the business community's control.
