Fran O’Sullivan runs up some more big business proposals today unsubtly reminding Key that big business, which put up the cash to get him into power, expects pay back by being allowed to pillage the State:
Behind the scenes the two task-forces investigating capital markets and tax reforms are taking a look at whether a major new industry could be created here to offer “back-office” services to the international finance sector.
The theory goes that by offering preferential tax breaks to major financial and insurance firms to re-situate their back-office services here, thousands of jobs would be created to keep young Kiwis in New Zealand.
Key himself promoted this “game-changing” policy when he was National’s finance spokesman under previous leader Don Brash. He had seen first-hand the positive job-creation effects after he diverted some of Merrill Lynch’s operations to Dublin to take advantage of the low corporate tax rate the Irish Government used as bait to get new industries into Ireland.
Yes, let’s be the Iceland or Ireland of the South Pacific. Remind me, how did turning their tiny economies into a base for financial institutions trading into new, risky instruments to a value many times the size of their countries’ GDP work out for them? Oh, right. Anyway, who’s going to pay for these tax cuts? John Key’s pixies?
Selling equity bonds in state-owned enterprises like the power generators – rather than privatising – would release much needed cash to get the debt under control. And it would be another sign that Key has not lost his mojo.
Selling the profit stream of SOEs, which is what a bond issue is, is privatisation. You can dress it up in any fancy form you like but we’re not fooled. All we have to do is follow the money, and whether it’s ‘allowing competition with ACC’ or ‘SOE bond issues’ the money goes straight from our wallets to the back pockets of big business.
Fran and big business may moan that Key hasn’t delivered enough for them yet but for ordinary Kiwis the worry is that Key is showing signs of going further and further to the right, bouyed by the polls. The question is whether his instinctual hunger for popularity and lazy attitude to governing will constrain him from pushing through more controversial rightwing policies.