Hobbit tax cut needs an overall business sequel

The saving of the Hobbit movie and its production in New Zealand rather than taking off overseas by pumping taxpayer dosh into it puts me in a quandary.

Like most Kiwis I wanted the Hobbit to be made here and after New Zealand and foreign unions put that prospect at risk by black banning the movie back in August (read the ban documents here) I, like the majority of us was hobbit mad.

Rightly so, at risk was $670 million of badly needed foreign moola pumped into the Hobbit and the local economy and billions of dollars of future earnings at risk from other movie projects because of bone headed unions and brain dead actors.

Those future projects are still at risk due to the Hobbit fracas.

John Key has saved the day and boy did he do well to stitch up a last minute deal. US$ 20 million of taxpayer dosh was used to sweeten the deal by providing bigger "tax incentives".

This is what I am in a quandary about however.

I am clearly for the Hobbit being filmed here but I am against corporate welfare, which giving $20 million of taxpayer cash to Warner Brothers to make the movie is.

The movie will be a net earner for the country, $NZ670 million in direct revenue, plus possible billions in intangibles like more tourists, less just under NZ$100 million in taxpayer incentives, so it is moola well spent but what makes the movie industry so special?

Frankly it aint.

While it supposedly provides around NZ$3 billion in annual foreign revenue it is nowhere near our biggest industry or earner of foreign exchange.

That precious prize goes to tourism as a whole and the Dairy Industry comes in as the second sequel in the foreign earnings blockbuster stakes.

Of course these two industries are currently being hammered by increased government imposed cost through harebrained carbon taxes and other environmental extremism and a penchant for the Nats to roll over private property rights, so land owners cannot sell their properties to the highest bidder.

So you can see why I am in two minds cant you?

If the National Government thinks lowering taxes (effectively that is what tax incentives are) to make movies here is a good idea - and I think it is - then why not lower taxes for other industries as well.

We know lower taxes stimulate the economy from a personal tax cut point of view and the same is true of lower taxes for business.

They are a good thing!

Why not have lower taxes for all business instead of Governments trying to pick their favourite business of the moment.

With the Hobbit they have chosen a clear winner but when have you seen Governments of any hue pick business winners?

The answer lies in a long record of wasted billions in failed businesses.

So John, you did well this time but if you are listening I know you know that lower taxes are great for our economy, it shows in your policies. Why not spread the tax love around and let business choose what they do with that extra dosh rather than you.

It will make the forthcoming blockbuster Hobbit movies look like an art film by comparison.


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From Fishpond.co.nz



A Perfect Gentleman: The Sir Wilson Whineray Story



c Share Investor 2010

Thai Express

Well, I wish the Thailand economy was as hot as the weather. I'm here in Bangkok on a business trip of sorts and while here naturally I would be checking out the action on the stockmarket and goings on economy wise.

There are rumblings of a coup here at the moment, where the "PAD" a people's democracy movement are trying to overthrow the nation's leader. This is naturally having an affect on the local stockmarket and their stock index has waivered in the last couple of days.

Looking around the country though any natural born capitalist, or one who has joined the movement recently, would be excited at the industrial nature of commerce and industry. The economy is of course highly controlled by a benevolent dictatorship(my own estimation) but that doesn't stop the nations people from trying to reach their obvious economic dream of having all the western accoutrement's.

If our tour guide is accurate in her figures, one of the main reasons for the locals and their fastidious work rate is the personal tax system. A range from 3% to a maximum of 30% is a definite incentive to get the country moving in a forward economic direction.

Our corrupt socialist Labour Party New Zealand leaders should take note. Our high tax rate is of course strangling our economy to death. Take my word, the Thai people are very poor as a whole today and the economy is struggling but give them 10 years or so and they will be richer than New Zealand. Far richer.

The constraints of red tape and planning procedures also don't hamper the forwards progress of the Thai economy. Factories belch lovely coloured smoke and their water is undrinkable. The 19th century industrial process is a little late in coming here. You have to let them have it though. It would be greedy and hypocritical of the Western World to hamper them with the Global Warming madness and other business constraints. Time and money will take care of the environment.

Leaving the hotel after this I will be confronted with a million people trying to take a Baht or 2 off me to help feed their families. It is in your face, exciting and entrepreneurial to the extreme. All that New Zealand business seems to lack at present, and has done for a long time.

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c Share Investor 2008