Wellington, May 29 NZPA - The Government's budget fails to promote real economic growth, the New Zealand Manufacturers and Exporters Association (NZMEA) says.

The Government yesterday announced it was reining in spending, scrapping tax cuts and stopping contributions to the Superannuation Fund in an effort to bring debt under control.

NZMEA chief executive John Walley said the budget contained little in terms of changes to support any real economic development.

"There was some tinkering around the edges, with some new funding allocated, but no attempt has been made to tackle the fundamental imbalances in our economic framework," Mr Walley said.

"The budget made some attempt to curtail government spending but there is no provision to promote real economic growth."

Auckland Chamber of Commerce chief executive Michael Barnett said the Government needed to look at investment, innovation and improved productivity.

"Having addressed the debt side of the ledger, we need now to urgently turn our attention to incentivising businesses to invest, get into exporting and grow their businesses," Mr Barnett said.

"That was the missing ingredient today and needs to be the focus of the follow-up budget to this scene-set."

Business New Zealand chief executive Phil O'Reilly said the budget "doesn't have a hint of panic about it".

However, Business Roundtable executive director Roger Kerr said plans to curb government spending were inadequate.

"This is not a tough budget. It was a first step on a long road."

Finance Minister Bill English said the budget was designed to provide an environment in which business could thrive.

"A lot of the stuff is not glamorous but it is vital," Mr English said.

Wellington Regional Chamber of Commerce chief executive Charles Finny said there were bold steps on expenditure and new investment in infrastructure.

"The Government has struck the right balance between stimulating the economy and constraining debt in the medium-term," he said.

Newmarket Business Association general manager Cameron Brewer said deferring tax cuts would not affect retailers as consumers had already cut back their spending.

Focusing on good economic management and stability would in the long term benefit business more than a couple of rounds of tax cuts.

NZPA