The first reading of the government’s bill took place last night and within its myriad of dull tax stuff was a hidden barb for the quarter of a million New Zealanders who work in manufacturing.
That barb is the move to give tax breaks to manufacturers who move their production offshore. Yep. You heard right. The government will be providing New Zealand manufacturers with a tax incentive to outsource their production. Just as long as they keep their head office in good old NZ.
Sue Bradford has pointed out the absurdity of this situation most succinctly:
What the Government is proposing will give Icebreaker a tax cut for making lovely outdoor wear in China, but not Earth Sea Sky making lovely outdoor wear in Christchurch. Norsewear, that former iconic brand, will reap a financial benefit for having taken its jobs to Asia, while Swazi, staunchly staying local, will miss out.
This Bill will give tax cuts to large firms that send fish to China for filleting and packing, but not to small fishermen who process locally, and who create environmental and social benefits by not carting fish back and forth across the planet.
This Bill would give Fisher and Paykel a tax cut for the whitewear it makes in Mexico but not for the whitewear it makes in Auckland.
Cullen’s answer to this is that we will lose the whole kit and kaboodle if we don’t pay people to ship their manufacturing jobs overseas and we’ll be stronger in the long run. I’d like to see the not-so-good doctor tell that to the workers at F & P and their families.
And they wonder why people call them the red tories.