Hickey slams Key’s get rich quick scheme

Written By: - Date published: 9:20 am, February 18th, 2010 - 13 comments
Categories: Economy - Tags:

Is it just me or does this ‘financial hub’ idea of John Key’s sound a bit too much like a get rich quick scheme?

Apparently all we have to do is exempt foreign owners of foreign assets stored in NZ-based trusts from tax and the money will roll in. We’ll rustle up 5,000 fund managers from somewhere (maybe Key’s 4,000 cycleway builders can have a crack…) and the government will clip the ticket as the billions flow in and out of New Zealand. ‘Hey presto’ a billion dollar industry.

We’re not really producing anything, no real wealth, just taking a tiny slice of the flow overseas people’s investments in overseas assets. And because we’re taking a very small clip of the ticket, we need to have hundreds of billions of dollars in transactions going through these trusts. This all leaves us vulnerable.

It would be fine while things went well but we would be exposing ourselves to capital flows many times larger than our own economy. If something goes wrong, as Ireland and Iceland discovered, we would be in deep trouble.

At this point, I’ll turn over to Bernard Hickey:

“I’d much rather grow the productive sector and small businesses than focus on the money changers.

It also creates new distortions. Why should foreign fund managers receive tax breaks when other foreign companies don’t. Do we widen it to other ‘special’ foreign companies? How about pharmaceuticals? That’s what Ireland did. Or maybe investment banking? Or maybe we should try to set up some tax-free zone for foreign companies? Down that path Caymans Islands’ madness lies.

It’s all very nice to want to be the Geneva of the South Pacific, but what happens when the other tax gathering authorities such as America’s Inland Revenue Service (IRS) or the Australian Tax Office come calling to ask some tough questions. Switzerland’s notoriously secretive banks are currently under concerted attack from the IRS and others over this very issue.

John Key should stop looking for magic bullets and just do the hard work.”

Indeed. But when has this Prime Minister ever displayed the slightest interest in hard work?

13 comments on “Hickey slams Key’s get rich quick scheme ”

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  1. all_your_base 1
    18 February 2010 at 9:47 am

    Monorail… monorail… monorail.

    • George Darroch 1.1
      18 February 2010 at 2:47 pm

      Does this monorail go through our national parks?

      I remember a hare-brained scheme to do just that in Fiordland a few years ago. Might be time for Gerry to go looking for the blueprints.

    • The Baron 1.2
      18 February 2010 at 4:46 pm

      hahaha possibly the best comment ever.

  2. BLiP 2
    18 February 2010 at 10:06 am

    I can see the vision now – what aspiration – a nation of domestic servants, peasant factory-farmers and coal miners ruled over by a class of merchant bankers!

    Thanks National Ltdâ„¢ – I’m lovin’ it!

    • Draco T Bastard 2.1
      18 February 2010 at 12:31 pm

      I’d say that IS National’s vision for NZ. Poor people doing as they’re told while the owners reap all the wealth.

  3. ghostwhowalksnz 3
    18 February 2010 at 10:25 am

    I think it comes from pressure from the big banks to be able to continue their tax evasion that they had been stopped doing.
    There seems to have been a loosening of credit in the last fortnight. Did the banks go on ‘strike’ till they got what they wanted.
    Because the fine detail of the proposal would leave a nice big loophole for the likes of banks to continue their tax evading ways

  4. tc 4
    18 February 2010 at 10:34 am

    what a vacuous piece of crap from Johnny Clown……. seriously why on earth would they bother coming here when Sydney holds all the cards in terms of skills/infrastructure/scale/access via more flights and a plethora of regional head offices.

    Only real advantage would be financial i.e we pay for a foreign hub as it doesn’t pay it’s own way via tax incentives/grants/rebates etc etc which Oz would trump in the blink of an eye

    he’s such a prick…..he knows all this and the fact the MSM will lap it up as another great idea…FFS

  5. Homo Domesticus 5
    18 February 2010 at 11:55 am

    Friends, what do you expect?

    Key is a former foreign currency speculator. He knows nothing about working for a living, nor has he any original ideas on how to improve New Zealand’s economy. He portrays himself as an ordinary Kiwi made good, but he long ago turned his back on this country and is corrupted by greed like much of today’s corporate sector.

    Keys’ ideas and so-called tax reforms will do zero to close the gap with Australia. In fact, I believe and predict they will widen the gap. I never thought I would say this, but I cannot blame anyone for heading to Australia to live and work, in fact I would encourage them to.

  6. aj 6
    18 February 2010 at 12:47 pm

    cycleway – cycleway – cycleway

  7. ak 7
    18 February 2010 at 3:18 pm

    Douglas used to grind on relentlessly about how we were about to become the “Switzerland of the South Pacific” and the Keyster’s currency trading buddies are treating us as the “Las Vegas of the South Pacific” so I guess it’s only fitting that wee Gringo’s latest brainwave is to make us the “Cayman Islands of the South Pacific”. “I found fame and fortune by doing nothing, why not the country?”
    What’s next? The ponzi capital of the South Pacific? Bernie Madoff for governor general?

    • Homo Domesticus 7.1
      18 February 2010 at 3:54 pm

      I believe the NZ dollar should be pegged. Key’s gambling buddies, Bollard, the World Bank, IMF et al will issue dire warnings against this. But pegging the dollar has worked well for Malaysia for example; they have a far more dynamic economy than us. Like the NZ dollar, the Malaysian ringgit was popular with currency gamblers until being pegged. Obviously, this will never happen here while Key is in power as he would not want to upset his currency speculating mates who are making easy money at our exporters’ expense.

  8. corkscrew 8
    18 February 2010 at 7:34 pm

    yes we should go on the golem standard

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