26 May 2009

Business fears lack of investment in skills

6:59 am on 26 May 2009

The business community fears the Government will cut funding directed at skills and innovation when it delivers its Budget on Thursday, as it attempts to rein in spending.

The National-led government has already dropped Labour's $700 million Fast Forward Fund, and angered some technology companies when it scrapped the Research and Development tax credit.

Finance Minister Bill English has said the Government will be considering the future of unfunded commitments made in the previous government's 2008 budget, including a $200 million economic transformation package.

The future of the $168 million 'skills strategy' is also unclear.

Business New Zealand chief executive Phil O'Reilly says innovation and skills are, from a business perspective, the two most vital areas in which to retain investment during the downturn.

He says if the Government is not going to invest further in these areas due to financial pressures, it must at least outline in the Budget the action it will take in later years, to allow businesses to plan ahead.

Mr O'Reilly says Australia is investing in skills training because its Government knows that when the economy moves out of recession the skills will be needed.