Adolf at No Minister isn’t happy that this blog is continually critical of our finance minister, Bill English, and approvingly quotes from an op-ed English had published in NZ Herald. Adolf rightly points out that Bill hasn’t literally “done nothing” as Finance Minister, and does have a few initiatives under his belt (albeit some of those listed by Adolf aren’t the work of English – education standards are the work of the Education Minister).
But that’s not the point – when even The Standard is pointing out that English isn’t doing ‘anything’ in terms of policy implementation (where they’d otherwise be moaning he’s cut funding to some quango or sold something off), you’ve got to wonder. Now I don’t think The Standard has got it right for a minute on the rhetoric of English’s op-ed. The real story – reading between the Labour Party lines – is that they aren’t moaning about the centre-right decisions of the Key Government, because aside from there being no spending binge, there aren’t any.
Compared to the first terms of both Sir Roger Douglas and Ruth Richardson, English hasn’t done much. In his defence he hasn’t had a currency crisis to deal with or the BNZ melting down and requiring a taxpayer bail-out. But the most annoying part is that Bill hasn’t done as much as Mikey Cullen did in his first year – or in other words, he hasn’t fully undone Cullen’s tax increases and Reserve Bank fiddles. I suspect Bill’s problem is that he’s was formerly a policy wonk, lapping up forecasts and spreadsheets at number 1 The Terrace. He prefers to take advice from all quarters, thrash out every argument before making a decision. That’s great if you’re a Treasury official, but not when you’re the Minister of Finance. As Cullen’s tenure shows us, sometimes a little guile is needed to get where you want to go.
Anyway, here’s the next ten suggestions in this series:
11. Develop innovative governance arrangements to facilitate economies of scale in accessing natural resources.
Bit too much waffle for my liking – what exactly is a “innovative governance arrangement”? So long as property rights are respected and upheld, I have no issue with accessing natural resources. Economies of scale will come if a business is able to invest enough capital in developing its production. Perhaps they’re really after some sort of government created co-operative between, say, mining companies for equipment?
12. Amend the RMA to more clearly establish the security and allocation of water rights for time periods that are fit for purpose where capital investment is involved, e.g. hydro generation or industrial process plant.
As mentioned previously, water rights are a critical issue for farmers and the agricultural sector generally. Getting the water issue right is critical for New Zealand’s development. To that end, the Government should create a system of water rights that can be traded, and establish systems for assessing the amount of water available for allocation and metering its use. In other words, apply market mechanisms to water.
13. Develop a replacement for the scrapped R&D tax credits.
A good replacement would be lower company taxes generally. However, from my contacts in business who invest in R&D (albeit mainly in the software development industry) it seems the real problem isn’t a lack of money to spend (which was what the tax credits were aimed at) but a lack of skilled staff to employ. The Government ought to encourage IT graduates to work in New Zealand – perhaps by some sort of bonding scheme?
14. Develop a national innovation strategy, including innovation priorities.
Not to be cute, but it’s not very innovative to have an innovation strategy.
15. Develop incentives for stronger links between public research organisations and the private sector.
The New Zealand Institute report Standing on the Shoulders of Science also proposes this.
16. Better coordinate publicly funded research for commercial application.
17. Ensure the tax review working group examines the role tax can play to promote private sector innovation expenditure and investment.
Luckily, this has been done. Now for action.
18. Offer support for basic applied research.
19. Relax co-funding requirements for government grants.
20. Simplify the current funding system, minimise the bureaucracy and make funding more transparent.
Not knowing much about the science sector, I can’t really comment. However, these proposals all seem to be reasonable.
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