Comments

David Thompson Posted:
So very, very true. It beggars belief that we consider ourselves to be a developed nation when so much of our economy is based on selling milk powder or logs. BTW, I own a Plinius amplifier (my second) that drives a set of Theophany speakers.
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David Thompson Posted:
A robust but sobering report. It concerns me that confidence is rising, yet sales and exports are down and "manufacturers and exporters are still lagging behind other sectors". Surely we should wait until we're earning more money before we start spending more?
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siemens Posted:
Yes true! The only thing that will never die in this world is the nature and its science behind it. Great post.
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Kieran Ormandy Posted:
Thanks for the question Steven, Germany has seen increases in manufacturing employment since 2009, and Switzerland has had stable manufacturing employment between 2006 – 2011, even in the face of ongoing Euro-zone issues. Korea has seen increases in manufacturing employment since 2008 and Israel experienced large increases since 1998, while being stable over the last 4 years. Singapore has had increases in manufacturing employment over the last two years. These countries all value their manufacturing sectors and work to protect them, this is reflected in the above numbers and their performance through the GFC. Note data around the above examples was sourced from OECD labour market stats.
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John Walley Posted:
Point one: you should have no doubt what our Association says publically represent the views of our members. Point two: we don’t knee jerk responses, if you trace back our comments around NZPower you will see them link all the way back to our research in 2004 and 2005. All that material is fully linked from our comments above. Point three: you will note our comments on major users, sadly the same advantage does not accrue to smaller industrial users. The perverse incentives of the LRMC approach in all this are well known. Point four: the NZMEA is not like any other Association in New Zealand we admit only manufacturers and exporters into membership, and our public expressions are the views of that restricted membership.
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25/1/10

Government must heed Tax Working Group’s advice


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The New Zealand Manufacturers and Exporters Association (NZMEA) is calling for the Government to heed the Tax Working Group’s advice and broaden the tax base to lower personal and corporate tax. The majority of the Tax Working Group (TWG) suggested closing tax loopholes around residential property investment, imposing a land tax and increasing the GST rate to 15 percent.

NZMEA Chief Executive John Walley says, “Tax changes must be designed to incentivise investment in productive industries and the TWG’s report has started to move in that direction.”

“Tax advantages for rental properties have already cost the country billions in lost tax revenue and the poor investment incentives created by the tax free status of property has been even more damaging and inflationary. The sooner these loopholes are closed the better.”

“However, the recommendation to take away the 20 percent depreciation on new plant and equipment will hurt productive firms and should be discarded,” says Mr. Walley.

“There was some debate from within the group on the best way to tax property. A comprehensive Capital Gains Tax would be the fairest way, but any move to level the playing field is welcome. The TWG has also recommended that the GST rate be raised to 15 percent to discourage consumption and encourage saving. This change in the balance of incentives is welcome.”

“New Zealand relies heavily on personal and corporate tax for its income so reductions in this area are necessary. The reductions in the corporate tax rate would enhance New Zealand’s international competitiveness. The need for international competitiveness extends beyond fiscal policy, and the impacts of monetary policy on exchange rates must be part of the rebalancing equation.”

“John Key has started the year by underlining his intention to focus on the economy; the recommendations of the TWG and the Capital Markets Taskforce would be a good place to start.”

“In all, the success and competitiveness of the real economy is the source of economic wellbeing for all New Zealanders – all policy rebalancing should start with that in mind.”



tags: tax working group, gst, land tax, capital gains tax

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