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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9/2/10

Still no real change


Print-friendly 15 comment(s) Posted in: In the media

In his opening speech to Parliament today Prime Minister John Key has accurately characterised the problems with a tax system that is in dire need a radical overhaul, but has responded with a determination to do no more than tinker say the New Zealand Manufacturers and Exporters Association (NZMEA). We had hoped for more political courage and leadership towards a step change that is needed to address the widely accepted problems in our economy.

John Key acknowledged that the tax system is broken saying, “The Government agrees with the Tax Working Group that New Zealand relies heavily on the taxes most harmful to growth, particularly corporate and personal income taxes; that there is a hole in the tax base around the taxation of property.” However, he then went on to say, “In particular, we will not be developing any proposals for a land tax, a comprehensive capital gains tax, or a risk-free return method (RFRM) for taxing residential investment properties.”

NZMEA Chief Executive John Walley says, “How the Prime Minister expects a broken tax system to be fixed without any changes is beyond me. We hoped for more, sadly it seems we can only anticipate more of the same.”

“The desire to drop the income and corporate tax rates is commendable but jobs follow investment as night follows day, and without balance in fiscal and monetary policy the real economy will be robbed of returns and starved of investment.”

“There seems to be a consensus that broad based, low taxes are fundamental for jobs and growth; what is lacking is the political will to deal with vested interests and make it happen.”



tags: john key, tax, opening address to parliament

comments

5 Comment(s)



Disillusioned - 11 February 2010 at 12:33 PM
If you're looking for 'political courage and leadership' then you're looking in the wrong place.
Gomez - 11 February 2010 at 14:27 PM
Its too early to start throwing the toys, everyone wants lower taxes, we need to wait until the budget to see what balance they come up with.
Disillusioned - 11 February 2010 at 14:28 PM
Notice to Govts advisory groups - don't waste your time
John Walley - 12 February 2010 at 15:14 PM
Not really about lower it is also about wider, unless wider is on the cards (land and capital) lower is just impossible.
Matt - 15 February 2010 at 14:47 PM
With all the talk around tax changes and their impact...it is also about the changes to encourage (or discourage) certain types of behaviour following the tax changes (and not just from a property investment, capital gains tax etc. point of view) but at a consumption level. If you put an extra $100 a week in the pocket of the average family, will they buy more groceries, save it/pay down the mortage or buy that new TV on hire purchase and send the extra money to the finance companies?

If you consider the myopic behaviour of the average consumer (shown by GE finance quoting in January strong increases in hire purchase spending in the last 3 months due to economic 'recovery' in the area of large appliances) couldn't putting more money in their pockets and simply say "spend to stimulate the economy" put money in the wrong places? Consumers often go for instant gratification (hire purchase), shop solely on price (not service or NZ made etc.).

So regardless of how more money is introduced into the system, if ultimately it flows to more money in the average New Zealander's pocket (assuming there are tax cuts), is there really anything to ensure that more money isn't being thrown into the system for the sake of it?

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