Making NZ competitive

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Why is there this obsession in NZ to compare their economic performance with Australia? Why is the standard of the good? As an Australian in NZ, it strikes me as pathetic on so many levels. That is not to say that Australia cannot be beaten, but such a comparison kind of suggests you are 'equal bed fellows'. We are not. We are very different.

For starters. Australia has immense mineral and energy wealth. NZ has relatively little, and what exists tends to be tied up in national parks, and not open to development.

The next point is - Australia has a rapidly growing population of 21 million, and NZ has just 4.3 million people, awkwardly split between two islands, and its stagnating. Why? Because every time that NZ seems to start growing, a group of Kiwis seems to leave the country. Usually in recessions when there is no jobs, but even retirees are inclined to leave for sunnier Queensland. Even the immigrants 'freshly acclimatised' in NZ, move to Australia when they get their citizenship. Why? Because NZ business will not recognise their MBA or PhD qualification, so they were only ever able to aspire to a store manager position at Pizza Hut.

The reality is that PM's do not like to tell their electorate how it is. The reality is that NZ ought not be comparing themselves with a stallion like Australia, but a 'cross-bred' like South Australia. South Australia has a similar population to NZ, and its fairly isolated. At this point it has about as much mineral production capacity as NZ, but I actually expect that to change in generations to come. No one wants to live in Sth Australia too, but that also will change. South Australia will be the next WA boom! So where does that leave NZ? Probably comparing itself to Tasmania, which only has 300,000 people. :)

The reality is NZ has huge culturally entrenched attitudes to work which need to change. It has some huge disadvantages to fight, and it really is not doing enough. The problem for the government is that they are just happy to be in power. Why make changes which will get you tossed out of office. The country clearly needs to break into technological niches, but how do you attract investment. NZ at this point is a bloated welfare state. I see no great desire to change that. The leaders here are 'nice', but they don't inspire confidence in their ability to make changes. Helen Clark had bigger gonads than these two leaders. One of them was even challenged by a 'homo in a tizzy' last week. :) Stereotypes aside. NZ has never had a good leader, so it doesn't know what its missing. None of them convey a positive message.

So what needs to be done. Well if we acknowledge that NZ cannot compete with Australia on low value minerals, we have to acknowledge that NZ can compete on competitively priced, increasingly skilled and productive labour. It is a small market, so NZ has to focus on developing niche-technologies like IT, medical devices, biotechnology, etc. There is also great appeal for NZ in other areas like arts and literature, as certain regions like Wanganui could foster services for these people to attract residents, and flow-on business.

There is a need to attract capital, so it would be desirable to reduce decrease consumption taxes and income taxes, and increase 'dead' capital taxes, principally land taxes. This would result in better utilisation of the land, as well as avoiding tax evasion. The welfare state has to be curtailed, local government needs to be curtailed, as its very inefficient, with majors who don't know what they are doing. There is a need for training, but its to no end unless you have the right corporate incentives to attract business. Actually, NZ is in a very competititive wage gap, i.e. It has English skills so it competes with Australia above (30%+ wages) and countries like Malaysia, Philippines, Thailand and India, with their obvious skill and language difficulties. They need to recruit from these areas, but they need to avoid marginalising these immigrants and nurturing their skills. Not alienating them, and forcing them into Pizza Hut jobs.

There is potential for New Zealanders as well. However they have a skills-experience disadvantage. These foreign immigrants have a culture-leadership-confidence weakness. A lot of these Asian migrants are very skilled. We must remember that many of them have been able to leave the country because they are wealthy, skilled, educated and successful. This is NZ's opportunity to grab them. They are keen to work.

The opportunity really falls upon NZ business to identify and make use of these skills. My partner is an example. She has an Psych degree and MBA from the Philippines. She managed 50 call centre staff in the Philippines, she has vast expertise in online marketing and search engine optimisation. She is not a strong leader, so she needs people to tell her 'conceptually' what to do. But she is incredible at execution, multi-tasking. Great work ethic. Very few people in NZ can do what she can do, and she can also offer a competitive edge because she has former contacts and employees offering outsourcing opportunities in Asia, to further increase productivity.

There are opportunities there if NZ wants to take them. Where are the leaders? Managers? Both in business and unfortunately government because it retains such a tight grasp over the economy.

Not all immigrants come from Asia of course. There are a lot of Europeans and Americans coming to NZ, but I would suggest they are mostly coming to retire. If NZ wants to go that way, and stay a retirement village, then I guess high consumption tax is the way to go.

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Author: Andrew Sheldon

Resource Rent Tax Applied Critical Thinking |

www.SheldonThinks.com

Broadband in NZ

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Broadband services in NZ are very expensive. There is little competition, particularly outside the 3 largest cities. You will find it hard to get wireless services outside the cities as well. We met a farmer who goes to the library, even though he signed up for a wireless service.

Vodafone and Telecom both offer similar plans. If you are in the larger 3 cities - Auckland, Christchurch and Wellington - you ought to look at the deals from Woosh and Orcon as well. We used Vodafone last year. The service was ok. They had high costs to connect and disconnect, so we cancelled, and now we are on spot agreement (i.e. no contract) with Telecom, because se don't spend much time in NZ. The good news is that if you intend to spend 6 months here, 6 months abroad, its easy enough. You just get a spot agreement for say 20Mb, which is $59/mth, plus $47/mth for telephone connection. If you want broadband only, outside the 3 largest cities, the telephone connection is compulsory. This is a similar cost to Vodafone on a contract. Vodafone offers no services off-plan. The benefit of our no-contract is that:

1. We can cancel our tel connection without charge and the telephone exchange will retain our number for 12 months, so we can pick it up in 12 months when we come back.

2. We were able to change the settings on our Vodafone modem so we could use if with Telecom.

Don't let them tell you you need a proprietary modem. Just contact the company to find out how to change the settings.

Contracts tend to come with a free modem. Since we already had a modem, we did not need that free add-on.

Buying products online - NZ wholesalers

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Living in Australia or NZ, one is inclined to pay too much if you buy store-stocked products. This is reason enough to buy online from places like http://excsur.com. This outfit served my step-sister in Australia, so I don't know if they service NZ. Ask them. There are many such online outfits. Obviously its better if they have a local office. I bought my Toshiba laptop online for $NZ560, with an extra battery from a group in Auckland called Playtech - see www.playtech.co.nz. Often you come across these groups by doing a search for popular items like computers. i.e. These wholesalers are often listed on price-comparison websites.

In Japan, I bought a GPS from another group - forget the name of that group, but they were British international. Ex??.com.

A lot of these companies offer free shipping, but of course its the total price value. There are certain things you want to buy in-store. Some things are hard to buy, like business shirts. You need to make sure you know how to measure your size by their standards. Your tailor might have different fitting standard to them.

Liberals would make Hitler proud

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Wanganui NZ is the host to the United Nations 'Peace with Justice' conference. Basically the conference is stacked with politicians, liberals, bureaucrats and the like....all people detached from reality by virtue of other people' money, whether its a rich grandfather, government salary, a non-representative political system, or simply another form of default, whether a history of family abuse or self-loathing. Why do I say that? Well this is the basis upon which these people exist. Their scheme on this occasion is 'Peace with Justice'. Their stated purpose is:

"A world without weapons of mass destruction and with climate change solutions that put people at it’s centre".

The problem with this cause is that they will not achieve their goal. Why? It is not a reasonable objective; its based on false premises; and these are precisely the type of people who will achieve nothing. They are not the solution, they are the problem.

Let's explore some of their issues. Nuclear weapons have contributed more than anything in the current world to the protection of people. Why? Nuclear weapons protects potential victims. People are potential victims of collectivism; that is any philosophy which subjugates facts to perceptions, or any 'majority' who professes to represent the majority. It is no coincidence that organisations like this are alligned with socialists, animal liberationists, welfare advocates, climate change doomsdayers. They have a common scheme - humanity is evil, he has to be restrained from his selfish ways, and the common good involves ....the pursuit of peace, climatic steady-state and justice. Sounds good...but the devil is in the detail.

The problem is that peace is not the standard of value, life is; as well as any measure which protects it. In such issues the basic unit of consideration is the individual, thus such groups ought to be seeking to enshrine individual rights. On this issue the UN is ambivalent because whilst the various UN Declarations and other conventions attempt to protect individual rights, they do so with dubious vigour. These were the noble objectives of the UN in the post-WWII period. Today the values of the organisation are clouded by collectivist philosophy which has seen Keynesian style policies. i.e. Governments running a sequences of credit-financed boom & busts, whilst underfunding regulation of CEOs, etc who bring the market into disrepute. This was of course the intention - to discredit markets, the selfishness of market participants, when it was all orchestrated by governments to keep them in power. The focus of the UN on justice, peace and global warming is a side-show to deliver collectivist - the basic form of socialism. By no means is socialism dead. In every generation it is reinvented. This generation is disparaging global warming and animal rights.

Interestingly, I have never heard an animal rights advocate show any concern for farmers who raise animals. Their interests are 'collateral damage', as they seek to use their political influence over the uninformed, uncritical thinking electorate to extort political concessions from government. Hardly a cause likely to deliver peace, but was that ever their objective. How can you have peace without a discussion of values. Why the focus on peace. If they are seriously interested in peace, they ought to be focused on solving problems, i.e. conflict resolution. In that respect, they do not have the capacity because they are the problem. They lack the values, the cognitive (critical thinking) capabilities and objective to deliver. Instead they, along with liberals in the media and government-sponsored academics are inducing a sense of guilt, social obligation and peer group pressure which is actually pushing us towards collectivism. They are so concrete-bound they know not what they do.

On my global warming blog you can read about the misinformation about global warming. The reason that no politicians are pushing emissions trading anymore because they are awakening to the fact that its a huge scam perpetrated by academics with no respect for objectivity. On my politics blog you can likewise learn why governments are not the solution but the problem, and why such non-government organisations (NGOs) like UNANZ are simply an extension of the same con job. Finally you can more about how society is being conned into recognition of rights for animals, with a greater zeal than Adolf Hitler. Why do you think Hitler wanted to elevate the rights of animals. Do you think it was love of animals or loathing of humanity? Such is the sense of life of these pithy liberals who are not going to deliver freedom, they are going to give greater powers to government to take it away, whether to protect animals (i.e. more regulation), protect the environment (i.e. more regulation) or peace (more rights). The problem is not that they want to protect these things, the problem is they want to protect people with arbitrary rights which will only destroy your prospects of achieving rights.

Most people will fail to grasp the intelligence of this article.... a testimony to your lack of conceptual integration. Read on....these is plenty more explanation. Rome was not built in a day. The thing to remember is that any arbitrary defined right is not a protection, its an obligation or a noose around your head. Grasp that and you will grasp your political legacy and future. When your right to education or whatever constitutes a claim on other people, it is apparent the whole concept of rights has been soiled. Government is a middleman who needs to justify its existence. It does not want to solve problems, it exists by burying you in them. Just like a stockbroker wants to buy & sell stock for you, the government corners both sides of the market, by creating the problem, and creating the perception of being a solution....have you ever seen that happen by the hand of government. Complex problem? Certainly, they have the majority fooled.

The most inaccessible country in the world

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I am willing to bet that NZ is the most inaccessible place to go in the world. Its terrible! Whether you are flying in or out. The good news is that flights are not so expensive anymore. The problem is:
1. Trying to get connections
2. Trying to get flights at reasonable times

I have tried all types of routes to get to the Philippines. I have looked at leaving from Wellington or Auckland. I've looked at flights through Melb, Sydney, Gold Coast, so I could get a cheap flight with Asia Asia. The problem I have is connections. Each requires staying overnight in Australia. Why? Because the NZ flights leave too late, or don't fly direct. I can't even get to Melbourne by noon.

This is not the first time I've had this problem. Its a constant problem. Of course I can always fly Air NZ. Great service, but never competitively priced. I remember attending a conference in Wellington, and I had to fly the day after in order to get back to Sydney, and I had the same problem arriving.

Telephone service with Jetstar is pretty poor, though their flights are cheap.

Large companies have disappointing ethics - supporting scams

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Here is an example of another large company engaging in unethical business practices. We warned Vodafone NZ about their activities over a month ago, and they are still carrying out the activity. They refused to refund us, but they did give us 20c credit to cancel the service.

Here is the scam. If you go to a website like this - a major newspaper - and you see an IQ test on the side left bar. It invites you into doing a test. Of course if you are curious, you engage as its free right. Continue on and you get to a point where you think you have to enter your tel number in order to get the IQ test result. You don't at this point know if you are paying for the test result, but you suspect that the tel number will be used for an advertising service, or follow up email.

What you don't see is the disclaimer because it is out of view. If you have a small netbook like me, then you will not even see the disclosure, which is not even in the same dialogue box as the box where you place your tel number. Clearly this is designed to be misleading.

Days later after my GF placed my cell phone number into this box, my cell phone credits were emptied. We contacted Vodafone, who refused to reimburse us. They did give us a 20c credit to cancel the scheme. We attempted to contact the company behind the scheme. The only number goes to a call centre in the Philippines. They were useless, but we were given a number in the USA. They were also useless.

This is the way business is going - international rackets to earn punitive, misleading fees. Banks started the process, and now telephone companies are going the same way. Of course maybe you think its just $20. Not worth complaining about.....but look at the banks...its $25 for an overdraft, its $20 for a zero balance. Sometimes you don't chose these things, they are imposed. You are buried in rules, such that you cannot live a life without a lawyer. And who would sue a person for $20. You would sooner slit your throat...or as most people do...simply repress it.

Everyone I know is repressed...except my immediate partner. People don't think because thinking only exposed your vulnerability to corporations engaging in scams. This is the world as structured by the "representative democratic" tradition. The politicians like this because it leaves them in political power, whilst their corporate affiliates loot you. They underfund regulatory agencies so you have no capacity to complain. For the hell of it - I suggest complaining here - http://www.comcom.govt.nz/online-complaint-form/

You might just receive an email explaining that they are under-resourced. I've heard it all before. The same crap in Australia.

Excessive taxes on alcohol - backpacker beware

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If you value drinking alcohol, you might want to consider not coming to NZ for a holiday. NZ is already charging a tax of $2.47 per litre on alcohol between 2.5-14% concentration, whether beer or wine. The government is also taking measures, probably punitive, to regulate the campervan trade in NZ.

These are big disincentives for foreigners to travel to NZ, and yet the government is considering another increase in alcohol tax to 'reduce binge drinking among the young'. This is the most insane policy you could imagine. First of all, the tax has already been increased for the same reasons before, to no avail. Is this not simply about using 'punitive taxes' to resolve holes in the national budget. Business will of course need to pass on the costs, which will see a bottle of beer priced between $7-8, and a glass of wine between $16-18. I suggest the increases might even be greater if businesses experience a fall in patronage.

My guess is that the policy would result in several negative effects:

1. Increases organised crime activity in the realm of boot-legging. Maybe the sellers will give you a rebate if you bring your own potatoes.

2. Closure of businesses - restaurants and bars are big employers in NZ, so more taxes is simply going to stop people going out. Expect rural town employers to be particularly hard hit, which will mean population declines in rural areas as rural people are forced to move to the city. I suspect they will move to Australia instead.

3. Less tourism - The backpacker trade will die off because alcohol would be a major expense for this group. They might not spend as much as the premium traveller, but they spend 1-6 months in the country (compared to a few days for business travellers and 1-2 weeks for wealthy retirees), with all funds being recycled through the economy, as well as spreading to the rural areas through the backpacker network. Expect more tourists to head to Australia. OK, Australia does not have the mountain vistas of NZ, but USA, Canada, Europe does, so travellers from those countries will not miss them. Australia will be a more holiday friendly place.

4. Greater use of alcohol substitutes - You can't use punitive measures to correct some action you consider inappropriate. There is a need for education - but not the idiotic messages we are accustomed to on TV. The problem is more fundamental. The problem is that academics do not understand the alcoholism issue. What they don't realise is that kids are going to explore other options like 'glue sniffing', meth, etc. The implication is that the government is driving people into more illicit activities as well as more dangerous activities. Having researched this issue I can tell you that the behaviourist school of stupidity is driving public policy on such issues. Governments are therefore labouring under the misconception that humans are animalistic. The reality is they totally lack any theory of values.

I will be among the first to suggest that alcoholism consumption is a problem, but the solution is never greater taxation. Taxation is slavery - not education! It might change behaviour at the margin, or in the short term, but the 'externalities' of such policies are far greater than any benefit. The implication is greater use of meth, greater use of methylated spirits (i.e. cheaper), greater illicit activity.

NZ might just learn that one of the appeals of travelling to NZ is the low cost of living. After all it is so far away, and does not have a lot of culture to offer. Basically its an 'outdoors experience'. My advice is - ditch the taxes, as well as the bureaucrat/academic reports which suggest punitive measures are the best way of avoiding youth binge drinking.

Send a message to the NZ government that taxation is NOT the solution! Take a holiday in Australia if you are in this part of the world. Better still punish the Australian government (who do the same thing) and tax a holiday in the Philippines or Vietnam. Alcohol there is just $1/beer. With the savings you will be able to buy an apartment for $50K. :)

Another paradox of these silly policies is that youth unemployment is pretty bad in NZ, and kids wanting a sense of efficacy are turning to alcohol or drugs to medicate their low self esteem. The government I believe is quickly taking this country into an escalating crime regime. You guessed it! That means more taxation to regulate behaviour because we didn't learn in the N^{th round of tax increases. We need a change in government administration so we can avoid the spiraling crime and incompetence as practiced by Western governments around the world. They are truly the pits. There is simply a complete lack of good sense and reason needs to be the standard of value. What qualifications do these people have? What life experience? The problem is they are not analytical thinkers. They are lawyers with 'good memories'. Precisely not the type of people you want drafting law.}

^{Details on NZ tax - see Wikipedia.}