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Speaker 1: There were two weeks away from the budget, so the

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Speaker 1: hints keep on dropping. The Prime Minister said the government

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Speaker 1: will increase total capital expenditure it's allocated in its upcoming

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Speaker 1: budget by four hundred million dollars. That money goes into

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Speaker 1: capital projects in health, education, defense, transport, portfolios and so on.

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Speaker 1: Liam dan Is, the Herald's Business editor at large, and

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Speaker 1: with us now, Hey.

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Speaker 2: Liam, hi, here's it going.

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Speaker 1: I'm very well, thank you. So why the significance of

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Speaker 1: the capital budget going up as what?

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Speaker 2: Well, we had a little bit about we had from

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Speaker 2: Nikola Willis last week the operating budget and that was

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Speaker 2: a big cut to it, and that was that's the

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Speaker 2: money on hand to you know, basically pay wages and

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Speaker 2: keep the government functioning. And that that was pretty austere.

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Speaker 2: And so you know, Nicola Willis had called her speech

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Speaker 2: last week a growth budget and you're sort of scratching

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Speaker 2: her heads. Well, it doesn't look really gross orientated. So

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Speaker 2: the capital expenditure is a bit larger, but you know,

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Speaker 2: so that that's good, and there was talk about some

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Speaker 2: signific significant investment in infrastructure projects, which you know would

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Speaker 2: be great. I mean, that's the sort of money that

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Speaker 2: you can you can spend of course a few you've

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Speaker 2: got to make the projects happen, as we've found out

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Speaker 2: in the last few years. But you know, that's a

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Speaker 2: good thing. Just I just think we'd probably have to remember,

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Speaker 2: there's there's a big decisions that the government has to

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Speaker 2: make about how much of this bending on defense goes,

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Speaker 2: you know, in the next year or so and over

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Speaker 2: the next four years. So they've actually you know, said

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Speaker 2: they're going to up defense spending. I think it's something

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Speaker 2: like six point six point five billion or something like

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Speaker 2: that on top of what they're already doing. So that

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Speaker 2: would be from the capital allowance as well. So yeah,

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Speaker 2: there's there's you know, it's sort of like they're giving

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Speaker 2: us little clues as they go as to where this

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Speaker 2: budget's going. It's it's not going to be a big

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Speaker 2: key as well, we got this and that and this,

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Speaker 2: but it's you know, in terms of the jig saw

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Speaker 2: of how they navigate I guess this difficult fiscal period

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Speaker 2: and keep going for growth. It was a little bit

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Speaker 2: more detail and it's kind of interesting.

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Speaker 1: Yeah, I suppose it is. I mean, so Chris Luckson's

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Speaker 1: done the speech today right where he's pumped up the

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Speaker 1: support for business. What are we expecting to see. Have

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Speaker 1: we got any idea at all what he's going to

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Speaker 1: do to make it easier for business to be able

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Speaker 1: to invest.

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Speaker 2: Yeah, so he alluded to doing some some not not

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Speaker 2: huge things, but small things that would help businesses invest.

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Speaker 2: And I wonder whether it's the sort of the kind

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Speaker 2: of tax rebate on you know that allows you to

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Speaker 2: depreciate or you will take a tax to rebeat on

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Speaker 2: depreciation of assets, because I know that's one that say

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Speaker 2: the Employers and Manufacturer's Association has really lobbied hard for

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Speaker 2: over the years. It just means, you know, if to

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Speaker 2: encourage businesses to invest in new equipment and new technology, obviously,

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Speaker 2: you know, the minute you'd take it out of the shop,

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Speaker 2: it starts to depreciate. And every year it depreciates and

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Speaker 2: you can claim back some tax on the depreciation. Now

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Speaker 2: you can set there at different levels, so it may

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Speaker 2: not be a huge amount of money, but you know,

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Speaker 2: that's quite a positive thing because when we look at

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Speaker 2: New Zealand's productivity, we know that you know, the not

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Speaker 2: investing in the latest technology is one of the reasons

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Speaker 2: that we say that we're sort of behind on productivity.

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Speaker 2: If you look at countries like Germany so on, where

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Speaker 2: they use all the latest technology that helps drive productivity.

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Speaker 2: So that's the kind of thing the government could do

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Speaker 2: that would sort of pay a dividend in the end,

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Speaker 2: is you know, in terms of boosting the economy and

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Speaker 2: going for grass, which is their mantra obviously.

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Speaker 1: Liam, it's always good to talk to you. Thank you mate.

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Speaker 1: That's Liam Dan, the Herald's Business editor at large.

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Speaker 2: For more from Heather Duplessy Allen Drive, listen live to

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Speaker 2: news Talks. It'd be from four pm weekdays, or follow

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Speaker 2: the podcast on iHeartRadio.