Monday, February 16, 2009

Key's corporate welfare?

The NZ Herald reports that the PM is "not ruling out the option of helping Fisher and Paykel".

Which of course means using your money (or at the moment your future earnings) to prop up the company. How's your business doing? Could you do with some help?

Why not ask Santa Claus? After all, you'd think that's where the money is coming from.

Why should YOU be forced to pay to prop up one company? After all, you already do so.

You see if you want to buy a dishwasher or clothes washing machine or dryer from one of F & P's competitors, you'll pay a 5% tariff on top of the market price and GST. F & P's products don't face this (a bit less for countries where there is a free trade agreement like Australia).

So you're already doing your bit, by buying their products instead of facing the punitive tax on its competition or paying a tax for the privilege of buying the competition.

Here's a better idea. Cut company tax. Take the opportunity to drop company tax from 30% to 20%, giving all business a break, and have a substantially more competitive rate than Australia, the USA and most European countries.

Of course the quid pro quo should be simple, eliminate ALL forms of corporate welfare, all subsidies for marketing, R & D and the like. That means abandoning nonsense about building a broadband network that users aren't willing to pay for and telcos don't believe is a worthwhile investment. It means letting business be free to compete.

However, John Key appears more interested making you be a compulsory "investor" in F & P.

Oh and if you want ammunition for the left? Using taxes to prop up big business is just handing them it on a plate (though it's hard to beat the Clark government's support for Toll Holdings in buying the railways for well above market prices just before a recession).

1 comment:

heisenbug said...

Even with the extra 5% tariff, F&P products are vastly more expensive than the equivalent models from their competition. I can't afford to buy F&P... maybe they're our version of the US car industry?