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Old 10-09-2008, 10:59 PM   #1
linkes
Avalon Senior Member
 
Join Date: Sep 2008
Location: Wellington New Zealand
Posts: 45
Default NZ report on financial crisis

LATEST: If our political leaders and regulators act quickly enough New Zealand can not only weather the current financial crisis, but come out stronger and growing faster than our international competitors according to a major report released by David Skilling of the New Zealand Institute and Mark Weldon of NZX.
Amongst the major measures they propose are:
Deferral of provisional tax payments by businesses to year end for at least a two-year Period
100 percent tax depreciation on capital investment for the next two years
Incentives for skilled Kiwi expats and new businesses to relocate to New Zealand
Creation of an at-scale SOE Holding Company to finance investment and drive global growth.
The current global financial crisis is one of the most serious events the New Zealand economy has faced for decades, according to the report.
The draft report, released today by the New Zealand Institute and NZX, said New Zealand's response to the crisis needed to be "deliberate, serious and proportionate".
"Immediate, bipartisan action os needed to ensure New Zealand not only survives, but thrives under the emerging economic storm conditions" the report said.
"What we have seen to date [from our political leaders] is not close enough" Dr Skilling says.
"Releasing the strategy in draft form is a reflection of both the urgency of the issues and the desire to stimulate a constructive conversation about the best way forward" said NZX CEO Mark Weldon.
"We have endeavoured to create a non-partisan set of actions and practical steps to ensure that New Zealand businesses can both keep their doors open and have strong growth prospects in the future" Weldon added.
"The response must be about more than battening down the hatches. . . We should see this as an opportunity to position the economy for the longer term, as well as manage the risks."
The report suggested provisional tax payments be deferred for 24 months, capital investment be "prioritised and incentivised", a two-year income cap tax at 20 percent for New Zealanders returning home, firms be attracted to New Zealand with two years of no company tax and the Research and Development tax credit be retained.
In the longer term the report said a company should be created to manage commercial state owned enterprises, a taxpayer savings vehicle be created to manage financial assets, KiwiSaver be made compulsory and the biases in the tax code that promotes housing speculation be removed.
New Zealand's response to past crises were the "insular" policies of Think Big and protectionism, the report said.
"Our lack of appropriate response then led us to the economic brink a decade later. We now face the same risk.
"We believe there is little we can do about Northern Hemisphere banks, there is a lot we can do to determine how well the New Zealand economy copes with permanent changes to global credit markets and a global economic slowdown."
NZPA


as taken from stuff.co.nz
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