We still live in a very unstable economic environment with no certainty that international or local economic conditions will improve. Deteriorating social conditions in New Zealand require more money to ameliorate, unstable exchange rates make long term business planning difficult, volatility in commodity prices seriously affects both the national income and individual farmers income, increasing weather 'events' take their toll on life, and the ever present threat of more terrorist acts all combine to make a challenging economic and social environment.
It is tragic that our government is not up to providing answers to these problems. They are fiddling around the edges of the problem while the country continues its downward slide.
Economic and social aspects of life go hand in hand. Answers to the social needs of our nation are found in the Social and Spiritual sections of this website. Without a return to honesty, integrity, thrift, diligence, fidelity, and innovation we will never be able to tackle the economic problems of the nation. It is the spiritual dimension to life that determines our actions in any given situation.
A jobs talkfest was held last year. I have yet to hear any initiatives for the actual increase in our export earnings. Despite the downturn in world economies people are still buying and we need to be hussling for every export dollar we can get. At the same time as the job talkfest Air New Zealand were laying up a B747. Take the seats out of that and you have sufficient floor plate for one of our creative designers to provide a superb trade mission platform to roam the world hussling our products at a wholesale level. Infratil should have been shouting Luebeck, Kent, and Glasgow but there are many secondary airports around the world where a flying trade exhibition would have eassy access to high powered purchasers of quality New Zealand products.
The cost should have been born 50/50 by Government and private enterprise and would cost less than many job creation schemes and other devices that do not create 'real' jobs.
- A major investment is being made in the Shanghai Expo. We should also establish permanent EXPO pavilion style trade and tourism promotion centres in Los Angeles, Japan (Osaka or Tokyo), Shanghai, London, and 1 point in Europe on a 50/50 cost basis with private enterprise.
- We should mount a concerted trade promotion campaign around the world.
WE NEED EVERY EXPORT DOLLAR (INCLUDING INBOUND TOURISM AND EDUCATION RECEIPTS) THAT WE CAN GET
It is a great pity that the Taxation Task Force does not appear to have examined the possibility of a TRANSFER TAX to REPLACE Income Tax, Company Tax, GST, and Fringe Benefit Tax.
The government is playing at 'rearranging the deck chairs' instead of taking bold and comprehensive steps to make the taxation system fairer and to reduce the levels of taxation across the board.
Superficially at least the Transfer Tax system is highly attractive for its simplicity and effectiveness. It works by simply adding a percentage between 1.5 and 2 per cent to all payments through the financial system. No paper work or compliance costs. The money is collected by the financial institutions and paid immediately and directly to the government. Government cash flows are eased and better track kept of the tax take. Between $50 and $90 billion per annum would be collected through a transfer tax.
It would be illegal to make cash payments for transaction over $1,000 without purchasing a tax receipt on line or at a bank or Post Office. The issue of inter company credits, off shore transactions, barter organisations etc need to be addressed but are not insurmountable. The benefits make it highly worthwhile examining the issue closely.
It will encourage savings as the tax only applies on expenditure.
It will only be effective and fair if it applies to ALL expenditure - personal, business, trusts, churches etc.
The IRD will hate it as there will be no need for 90% of their staff. The benefit for the country is the massively reduced expenditure in the administration of the tax system !
THE RELIEF FOR BUSINESSES AND INDIVIDUALS FROM THE BURDEN OF PAPER WORK, COMPLIANCE COSTS, AMBIGUOUS RULINGS OF THE IRD, AND TIME TAKEN TRYING TO MINIMISE TAX UNDER THE PRESENT SYSTEM WILL BE IMMENSE. THE CREATIVE JUICES RELEASED WILL MASSIVELY INCREASE OUR PRODUCTIVITY AS A NATION.
As with any tax system there are some hooks which need to be examined closely and effectively by intelligent competent people not afraid to be innovative. That excludes our current government!