Monday, 16 March 2020

12 month regulations holiday needed to support business

“The Government should delay by 12 months the introduction of any non-coronavirus-related regulations to support businesses and keep workers employed”, says ACT Leader David Seymour.

“The Reserve Bank’s decision this morning to delay the start date of increased capital requirements for banks by 12 months was the right one.

The proposals would have acted as a handbrake on the economy, reducing economic output by $2.7 billion a year – through higher interest rates and lower firm investment – for a hypothetical benefit of $900 million. Riskier borrowers, such as a farmers and SMEs, would have faced a disproportionate increase in interest rates and reduction in lending. The proposals would have put people out of business, and contributed to the instability the Reserve Bank was supposed to be fixing.

“The Government should follow the Reserve Bank’s lead and delay by 12 months the introduction of any non-coronavirus-related regulations.

“This would include next month’s minimum wage increase, and proposed new tenancy laws and freshwater regulations.

“The economy is headed for a recession and businesses face massive uncertainty. The goal must be to reduce pressure on firms so they can keep as many people employed as possible.

“Introducing new regulations unrelated to coronavirus will only add to the cost, risk and uncertainty of doing business.

“Spending public money is not the only way to support businesses and the economy. This is an unprecedented crisis and the Government must use every tool at its disposal.”