Enforcing property rights and providing information – it is vanilla stuff, but its the best way to run the government.

“one of the issues about research and development is the scale of enterprise”

The scale of enterprise is something that is internal to the functioning of the economy. Our scale is limited as our population is small – larger population would lead to more capital investment which would increase scale. There is not much we can do about that – trying to push businesses to invest in increasing scale would be counter-productive if we don’t have the capacity in the first place.

“If govts insist on implementing these stupid ideas, I’ll continue to maximise any benefit for my businesses from them. But, being an altruistic and high-minded sort, I much prefer the simpler option: save the deadweight agency costs, save the cost of grants and tax credits, and cut the corporate tax rate accordingly. That will do far more than these tinkering gimmicks.”

Very true!

The tax holiday to attract companies to transfer here (proposed by Messrs. Skilling and Weldon) is even more dubious. A 2 year tax holiday just isn’t enough to bring a business of scale to NZ (I can’t think of anything of that nature that would work), So what about tax holidays for those who are planning to leave, to encourage them to stay? Do we all threaten to leave, and everyone gets a tax holiday?

If govts insist on implementing these stupid ideas, I’ll continue to maximise any benefit for my businesses from them. But, being an altruistic and high-minded sort, I much prefer the simpler option: save the deadweight agency costs, save the cost of grants and tax credits, and cut the corporate tax rate accordingly. That will do far more than these tinkering gimmicks.