Thursday, December 02, 2010

New Leinster

Prime Minister John Key has slammed bureaucratic pin-pricking over the proposed New Zealand financial services hub as "absolute rubbish" and stepped in to put the project on the fast-track.

Economic Development Minister Gerry Brownlee has been ordered to produce an urgent paper covering a zero tax rating for the relevant foreign funds which Key wants incorporated in the November taxation bill and passed by April 1 next year.

The Prime Minister's frustration with Ministry of Economic Development officials spilled over publicly during a question session at an Auckland dinner on Tuesday night where he stressed New Zealand needed to be more optimistic and back success.

"There's been a whole series of advice coming from MED which basically says 'if you want to do this, you've got to deliver the Magna Carta of documents'," Key told the International Business Forum audience.
The Herald's headline Key itching for quick action on financial hub evokes rather unpleasant images, but the message is clear: Action Man leaps in, just like he did on the National Cycle Path, and look what a success that has become since his bold intervention. But this time it seems he might be in a position to do some damage:
Craig Stobo - who chairs the Government-appointed group which was tasked with working out how an international funds services industry could be created here - is delighted the proposal has got Government approval.
It is hardly surprising that the improbably named Craig Stobo is delighted - he is, after all, a fund manager. Helpfully, he spells out for the rest of us the liability we face:
Stobo said if a zero rating for the relevant funds (international funds which are not invested in New Zealand but are administered out of NZ) is incorporated in the November taxation bill, "it will be a signal to the rest of the world we are serious".
No it will not; it will be a signal to the rest of the world that we are greedy and stupid, a tax haven for slush fund managers. We can become just like Ireland: corrupt and broke. But look, it has an upside going forward:
Earlier reports to the Prime Minister suggested the administration of financial services could become a billion-dollar industry and create 3000 to 5000 new high-paying jobs.
Yes, 3000 to 5000 people like John Key: suits who get rich with other people's money, people who doubtless will pay the National Party handsomely and secretly to maintain New Zealand's new-found third-world status. And the tax-dollars paid by the suits will help reimburse those who invested their money in dodgy property companies. It goes round and round, never touching the rest of us.

Why would Mr Key bother to listen to the advice of his advisers when he has the opportunity to gamble with the country's money and with our reputation? It is his biggest put option yet. So ignore the Ministry and get Gerry to produce the advice that Mr Key wants to hear. After all, if we are going to be a third-world country financially, we might as well adopt third-world methods of doing government.

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