The government expects the proposed R&D tax credit to attract more international R&D to New Zealand as well as encourage more home-grown R&D, Finance Minister Michael Cullen said in a speech today to the Ernst & Young tax conference. In the speech he emphasized the role of tax policy in transforming the economy through increased international engagement, investment and savings.
The government's vision for our economy is for a high-skill, high-value and innovative economy, well-connected to global markets. Reforms we have made this year to business tax are carefully designed to help realise our vision.
The international tax changes help to boost our competitiveness as a place in which globally connected firms can locate and expand.
Rising productivity also depends on innovation, and innovation comes from research and development. That's why the business tax reform package included the tax credit of fifteen per cent of allowable research and development expenditure. It will encourage more businesses to invest in more R&D.
You asked whether I anticipate an influx of R&D investment into New Zealand from countries with a less generous jurisdiction. I certainly hope so. If we attract more world class R&D that can only add to our knowledge base and stimulate more innovation.
Most countries offer some incentive, so our changes make New Zealand more competitive.
Wales needs to be more competative as well to and do this we need control over our own tax policies, powers over taxation must be transferred to the Senedd because only then can policies that suit the exclusive needs of Wales be designed and implemented.
Annette Strauch wrote...
Wales is still not responsible for its own tax system.
The Irish tax model means a bigger gap between poor and rich according to Chris Talbot.
Ireland has many rich people // millionaires but there is the highest relative poverty in the EU also!
Ireland became an anti-social state through low tax.
There is no oil in Wales. How is the social state going to be financed? No half-colonial relationship with the mighty imperialistic America is possible.
With BIG interest I read the following study (not exactly up-todate but I think it is still very much the same):
"The Welsh economy has undergone rapid structural change in recent years. Eearnings of workers in Wales had declined relative to those in Great Britain. Second, the shift away from full-time men has been an important factor in the fall in average relative earnings. Third, the decline in the relative earnings of full-time men is mostly explained by falling relative earnings in construction, distribution and transport, as well as the failure of workers in banking and financial services in Wales to keep up with their counterparts in Great Britain. Fourth, the shift in full-time employment to health, education and other services has tended to support relative earnings. Fifth, the decline in full-time men's earnings relative to Great Britain seems to have been caused by long-run factors that are unlikely to naturally reverse themselves."
Lit.: A Study in Structural Change: Relative Earnings in Wales Since the 1970s
Authors: Cameron G.; Muellbauer J.; Snicker J.
Source: Regional Studies: The Journal of the Regional Studies Association, Volume 36, Number 1, 1 February 2002 , pp. 1-11(11)
Publisher: Routledge, part of the Taylor & Francis Group
Posted by: Annette Strauch | August 17, 2007 6:13 PM