R&D tax credit
As part of National’s Research, Science & Technology policy, we announced that the R&D tax credit would be reduced from a 15% credit to a 10% credit. This was because much of the money that will be paid out will effect no change in the level of R&D whatsoever.
The reason for not abolishing the R&D tax credit altogether was that most OECD countries have such tax credits, and they are accepted as part of the international business landscape.
However, given the persistent operating deficits revealed in the PREFU, these tax credits have become a “nice-to-have” item that is simply not affordable any more.
National will, therefore, discontinue the R&D tax credits altogether. The additional saving from discontinuing the tax credits, rather than just reducing them to 10%, totals $619 million over the years 2008/09 to 2011/12.

I am pretty disgusted by this. 

New Zealand has one of the lowest percentages of R & D spend against GDP in the OECD.  We need incentives for R & D. We need innovation.  We need productivity improvements which these bring.

There is nothing in this fiscal policy for business.  When times are tough, the government needs to incentivise ecomonmic growth through business.

Considering the top growth countries in the OECD have 50-150% R & D incentives, 10% or removing all together is a big fail from a long term perspective.

However, given the persistent operating deficits revealed in the PREFU, these tax credits have become a “nice-to-have” item that is simply not affordable any more.

Are they a centre-left or centre-right party?  This smacks of a complete lack of understanding about what New Zealand needs to weather the storm in the current economic climate.

National have now ensured I will not even remotely consider voting for them.

Posted by Karl Rohde at 1:30 am | Comments (0) | Trackbacks (0) | Politics

"National's research, science and technology policy, issued yesterday, confirms the party would scrap Labour's Fast Forward Fund and reduce research and development tax credits."

I forget, is it labour or national who are supposed to be centre-left?

New Zealand has one of the lowest investments in Research & Development within the OECD.

We have already firmly established that long term, bulk produce agriculture and light manufacturing is not sustainably competitive in the current worl market.

So now they are going to REDUCE the incentive to undertake R &D.

In order to life our productivity and commercial viability, i.e. become a rich, well paid nation, we need to focus on niche high margin products and services.  Essentially, we need to upskill our workforce.

The only way that will happen is for companies to be able to afford to re-invest in R & D.

Currently countries such as France have base credits more than twice what NZ provides.  In addition to this, it has special treatment for initial R & D which in some cases can cover up to 100% of the R & D cost if it can be proven it may benefit the country long term.

New Zealand needs to get out of this bulk produce farming mentality and step up. 

Focus on:

• intellectual property (designs and patents)
• organic produce
• specialist R & D services for foreign entities

Why as a nation to we continually live in the 70s.

Posted by Karl Rohde at 2:00 am | Comments (0) | Trackbacks (0) | Politics

This is a compelling article...written by a Canadian citizen..

Salute the Danish Flag - it's a Symbol of Western Freedom By Susan MacAllen

In 1978-9 I was living and studying in Denmark. But in 1978 - even in Copenhagen, one didn't see Muslim immigrants. The Danish population embraced visitors, celebrated the exotic, went out of its way to protect each of its citizens. It was proud of its new brand of socialist liberalism one in development since the conservatives had lost power in 1929 - a system where no worker had to struggle to survive, where one ultimately could count upon the state as in, perhaps, no other western nation at the time.

The rest of Europe saw the Scandinavians as free-thinking, progressive and infinitely generous in their welfare policies. Denmark boasted low crime rates, devotion to the environment, a superior educational system and a history of humanitarianism.

Denmark was also most generous in its immigration policies - it offered the best welcome in Europe to the new immigrant: generous welfare payments from first arrival plus additional perks in transportation, housing and education. It was determined to set a world example for inclusiveness and multiculturalism. How could it have predicted that one day in 2005 a series of political cartoons in a newspaper would spark violence that would leave dozens dead in the streets -all because its commitment to multiculturalism would come back to bite?

By the 1990's the growing urban Muslim population was obvious - and its unwillingness to integrate into Danish society was obvious.. Years of immigrants had settled into Muslim-exclusive enclaves. As the Muslim leadership became more vocal about what they considered the decadence of Denmark's liberal way of life, the Danes - once so welcoming - began to feel slighted. Many Danes had begun to see Islam as incompatible with their long-standing values: belief in personal liberty and free speech, in equality for women, in tolerance for other ethnic groups, and a deep pride in Danish heritage and history. The New York Post in 2002 ran an article by Daniel Pipes and Lars Hedegaard, in which they forecasted accurately that the growing immigrant problem in Denmark would explode. In the article they reported:

'Muslim immigrants constitute 5 percent of the population but consume upwards of 40 percent of the welfare spending.' 'Muslims are only 5 percent of Denmark's 5.4 million people but make up a majority of the country's convicted rapists, an especially combustible issue given that practically all the female victims are non-Muslim. Similar, if lesser, disproportions are found in other crimes.'

'Over time, as Muslim immigrants increase in numbers, they wish less to mix with the indigenous population. A recent survey finds that only 5 percent of young Muslim immigrants would readily marry a Dane.' 'Forced marriages - promising a newborn daughter in Denmark to a male cousin in the home country, then compelling her to marry him, sometimes on pain of death - are one problem'

'Muslim leaders openly declare their goal of introducing Islamic law once Denmark's Muslim population grows large enough - a not-that-remote prospect. If present trends persist, one sociologist estimates, every third inhabitant of Denmark in 40 years will be Muslim.'

It is easy to understand why a growing number of Danes would feel that Muslim immigrants show little respect for Danish values and laws. An example is the phenomenon common to other European countries and the U.S .: some Muslims in Denmark who opted to leave the Muslim faith have been murdered in the name of Islam, while others hide in fear for their lives. Jews are also threatened and harassed openly by Muslim leaders in Denmark, a country where once Christian citizens worked to smuggle out nearly all of their 7,000 Jews by night to Sweden - before the Nazis could invade. I think of my Danish friend Elsa - who as a teenager had dreaded crossing the street to the bakery every morning under the eyes of occupying Nazi soldiers - and I wonder what she would say today.

In 2001, Denmark elected the most conservative government in some 70 years - one that had some decidedly non-generous ideas about liberal unfettered immigration. Today Denmark has the strictest immigration policies in Europe. ( Its effort to protect itself has been met with accusations of 'racism' by liberal media across Europe - even as other governments struggle to right the social problems wrought by years of too-lax immigration.)

If you wish to become Danish, you must attend three years of language classes. You must pass a test on Denmark's history, culture, and a Danish language test. You must live in Denmark for 7 years before applying for citizenship. You must demonstrate an intent to work, and have a job waiting. If you wish to bring a spouse into Denmark, you must both be over 24 years of age, and you won't find it so easy anymore to move your friends and family to Denmark with you.

You will not be allowed to build a mosque in Copenhagen. Although your children have a choice of some 30 Arabic culture and language schools in Denmark, they will be strongly encouraged to assimilate to Danish society in ways that past immigrants weren't.

In 2006, the Danish minister for employment, Claus Hjort Frederiksen, spoke publicly of the burden of Muslim immigrants on the Danish welfare system, and it was horrifying: the government's welfare committee had calculated that if immigration from Third World countries were blocked, 75 percent of the cuts needed to sustain the huge welfare system in coming decades would be unnecessary. In other words, the welfare system as it existed was being exploited by immigrants to the point of eventually bankrupting the government. 'We are simply forced to adopt a new policy on immigration. The calculations of the welfare committee are terrifying and show how unsuccessful the integration of immigrants has been up to now,' he said.

A large thorn in the side of Denmark's imams is the Minister of Immigration and Integration, Rikke Hvilshoj. She makes no bones about the new policy toward immigration, 'The number of foreigners coming to the country makes a difference,' Hvilshøj says, 'There is an inverse correlation between how many come here and how well we can receive the foreigners that come.' And on Muslim immigrants needing to demonstrate a willingness to blend in, 'In my view, Denmark should be a country with room for different cultures and religions. Some values, however, are more important than others. We refuse to question democracy, equal rights, and freedom of speech.'

Hvilshoj has paid a price for her show of backbone. Perhaps to test her resolve, the leading radical imam in Denmark, Ahmed Abdel Rahman Abu Laban, demanded that the government pay blood money to the family of a Muslim who was murdered in a suburb of Copenhagen, stating that the family's thirst for revenge could be thwarted for money. When Hvilshoj dismissed his demand, he argued that in Muslim culture the payment of retribution money was common, to which Hvilshoj replied that what is done in a Muslim country is not necessarily what is done in Denmark. The Muslim reply came soon after: her house was torched while she, her husband and children slept. All managed to escape unharmed, but she and her family were moved to a secret location and she and other ministers were assigned bodyguards for the first time - in a country where such murderous violence was once so scarce.

Her government has slid to the right, and her borders have tightened. Many believe that what happens in the next decade will determine whether Denmark survives as a bastion of good living, humane thinking and social responsibility, or whether it becomes a nation at civil war with supporters of Sharia law.

And meanwhile, Canadians clamor for stricter immigration policies, and demand an end to state welfare programs that allow many immigrants to live on the public dole. As we in Canada look at the enclaves of Muslims amongst us, and see those who enter our shores too easily, dare live on our taxes, yet refuse to embrace our culture, respect our traditions, participate in our legal system, obey our laws, speak our language, appreciate our history . . we would do well to look to Denmark, and say a prayer for her future and for our own..

Posted by Karl Rohde at 12:00 pm | Comments (0) | Trackbacks (0) | Politics

"There is no way that it is fair for one employee to be paid less each week in their take-home pay than an employee doing the same tasks, simply because they choose to be in KiwiSaver and the other employee doesn't," Mr Mallard told the Weekend Herald.

In principle, up to the government contribution of $1043 I agree 100%.  After that however, I strongly disagree. I say:

There is no way that it is fair for one employee to be paid less each week in their gross pay than an employee doing the same tasks, simply because they choose NOT to be in KiwiSaver and the other employee does.

Let's take the average income of a software developer with 8 years experience.

They can expect to be paid $65,000 per annum, depending on their specific skill-set.

Once the 4% employer contribution kicks in, the employer will be "topping-up" $1557 per annum for a salary of $65,000.

If the employer has two employees with equal experience, and they are both as good as each other, but only one is in Kiwisaver, the employer will have to pay the non-Kiwisaver person an extra $2373 for them to be on the same remuneration as the person on Kiwisaver.

The net value of $1557 is gross $2373 after 33% tax and 1.4% ACC.

However, it seems the change to legislation actually makes out that the employer is penalizing the person in Kiwisaver, which is simply not logical.  They are getting a net benefit from the employer of $1557.  Just because someone has not joined Kiwisaver does not mean they should be entitled to anything less.  In fact it could probably be argued the employer is prejudicing them by not giving them the same "package".  This would be even more likely if the person not in Kiwisaver happened to be female, but thats a completely different problem that needs to be dealt with.

Assuming the market rate is $65,000 per annum.  Kiwisaver in fact makes the market rate $67,3773 - if the employee was given fringe benefits to the value of $1557 (in simplistic terms sticking to their 33% tax bracket) there would be a gross liability for the employer of $2373.

So, is the employer offering a $65,000 gross package based on market rates really in breach of the legislation if one person decides to join Kiwisaver and one person does not?  $65k total package should be exactly that.  Obviously the Kiwisaver would still get the $1043 subsidised amount - but that's the government paying it, not the employer.

Does the legistaltion only cover that $1043 or is it the whole 4%? 

These are questions that small employers need answers to, $2373 in gross terms means each developer in this scenario would have to bill out an extra 3 hours a month to cover it.  That may not sound a lot - but for professional services, it can be hard enough to keep consistent billing.  Since services companies trade time for money, it is very much a problem.

The person in Kiwisaver is making a choice as to whether or not to join.  If they do join, their package is still the same as the person that didn't join, so they take home less pay.  That is not the boss ripping them off, it is simple mathmatics.

It shows yet again that Kiwisaver was not properly though through, and that most MPs have no clue about the real business world.

Don't get me wrong, I am not against Kiwisaver in principle - but the details are a huge can of worms that will be hurting people for many years to come.

Posted by Karl Rohde at 6:00 pm | Comments (3) | Trackbacks (0) | Politics

The Employment Relations (Flexible Working Arrangements) Amendment Act 2007

Wow. That's a mouthful!

I actually agree with this new bit of law in principle.  However, as with anything "flexible" between an employee and employer there is always a risk of abuse, in this case from the employee.

I do have an issue with some of the wording:

"To provide the employee with appropriate support and information during the course of the request."

I personally think the employer, especially the small business, is already burdened with enough.  If an employee knows about the fact they can request flexible working options, then it's up to the inidividual to be fully informed of their rights. If they can't be bothered, I for one would be concerned about giving them the flexibility they are asking for.

In fact I would go so far as stating I would make it an unwritten company policy that an employee who is clueless about the process would be covered by:

• detrimental impact on performance
• detrimental impact on quality

They would therefore be refused their request.

It would also be necessary to put some very careful monitoring into place which many small businesses simply could not have the resources to do or even the knowledge to do.

Luckily that is covered by:

• burden of additional costs
• detrimental effect on ability to meet customer demand

I continue to dispute that the employer should be tasked with keeping their staff fully informed in matters of employment.

It comes down to empowering people; the more responsibility we take away from someone the less empowered they become.

Unfortunately New Zealand labour laws are generally about dumbing down the labour force, which is why we are so low on the OECD's GDP per Hour tables.  You need a consciencious and educated employee to be productive, something the New Zealand labour force sadley lacks.

I for one will be watching the collateral damage this new law creates as it is tested in employment courts around the country.

I am sure employment law vultures like Garry Pollack, who has historically been quick off the mark to test new labour laws, are on the edge of their seat dribbling in anticipation.

Posted by Karl Rohde at 6:00 pm | Comments (1) | Trackbacks (0) | Politics

14.6% of the population of New Zealand are Māori .

This year, they will have 7 seats dedicated to them, in addition to representation of Māori through both the Māori party plus individuals in the other parties.

I say it is time the Māori "step-up" and acknowledge they have sufficient strength in politics and say we agree with MMP and will honor what the people of Aoteraroa want.  We will accept the 5% threshold, and if we are unable to convince the Māori of New Zealand that we deserve to be in Parliment, so be it.

I mean seriously, if the can't convince 1/3 of Māori in NZ that they should be in Parliment, then maybe they shouldn't be.

That after all is what MMP is all about.

Posted by Karl Rohde at 3:00 pm | Comments (0) | Trackbacks (0) | Politics

""The biggest challenge facing New Zealand today is to improve living standards by lifting wages and productivity," EPMU national secretary Andrew Little said today."

This shows the completely ridiculous understanding of most union leaders because of it's context. 

""Strong work rights give security and a basic level of fairness to New Zealand workers and are an essential condition for lifting wages and living standards."

This is where Andrew fails to understand the real world.

Protecting slack lazy wankers who think everything should be handed on a silver platter does no one any favours.  Small business should be able to drop these type of workers as soon as it becomes apparent the worker is a lay about.  By not allowing small business this right; it impacts harder working more productive staff because to much productivity and money is lost on the fuckwits.  It prevents wage rises for those who deserve them.

New Zealand is in the bottom third of OECD countries based on GDP per Hour.  Yet we work the longest hours!

It is a known statistic that in any give day; after 8 hours your productivity reduces by 25% less.  Hit 12 hours and your are at 50% of your usual productivity.  If you are undertaking work with machines you are at risk because you are now behaving as if you had had three alchoholic drinks.

Small business in New Zealand struggle with producivity because they try to go it alone.  The fundemental reason for this is labour laws in New Zealand.

If I hire someone who at facevalue looks good; but it becomes apparant they don't have the skills or attitude to be a productive member of staff, it should be well within my rights as a small business to get rid of that person within the first 90 days.

Why?  Because if I don't, I might not just have to let them go, I might have to let all the other employees go.  I certainly won't be able to give pay rises to those who deserve them.

Is it up to the employer to "teach" basic skills like how to be polite; on time; undertake quality work.

No.  We are their to teach them how to do the job they are hired to do, not how to work.

If they do their job, are productive and have a work ethic, they have nothing to fear from this proposed change.

Complaints about dropping wages sits squarley with a complete lack of understanding of the small business model this proposed change is targeted at.  We can't raise wages if we have slack and unproductive staff.  New Zealand can't climb the ranking of productivity and become a rich country again until our workforce become more productive.

For all these union leaders who disagree - how about you go and try and run a small business with lazy or incompetent staff and see how hard it is to get rid of them without a law suit.

Employers are not there to wipe employee's arses.  Current law states otherwise and needs to change.

Posted by Karl Rohde at 3:00 pm | Comments (0) | Trackbacks (0) | Politics

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"Any more than two of these and you could be branded a binge drinker in Australia, according to reports."

Their data is rubbish and conclusions unfounded.

More social engineering by chucking the baby out with the bathwater instead of focusing on the real problem.

It has been clinically proven that a certain level of consumption is actually good for you, including drinking beer.

In addition to this, countries like France, Spain and Italy who have a high consumption of alcohol, including for younger people, have substantially lower levels of violence associated with alcohol compared to New Zealand and Australia. They also have lower rates of alcohol abuse.

The issue is about attitude. Kiwis and Ozzies drink to get drunk. That is where the problem is. Why is it these two countries are the only ones to get banned from events like Oktoberfest in Europe? Wake up and focus on cultural changes.

What next? Ban drinking altogether? Didn't work in USA. Just caused a hidden culture of drinking and a huge black market for organized crime.

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• Electricity
• Water
• Health
• Education

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• I make direct statements about political parties
• I make money from the google adsense adverts
• More than one author exists - comments are able to be left

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• 1st offence: Lose license for 12 months, $5,000-25,000 fine based on how much over the limit.
• 2nd offence: Lose license for 60 months, car is impounded and sold. $5,000-25,000 fine.
• 3rd offence: Permanent ban from driving. 6 - 60 months incarceration; home detention primary method.

1. correct capture of statistics
2. addressing lack of skill of drivers
3. recidivist drunk drivers
4. lack of focused vehicle safety

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1. The 42 per cent threshold will increase to $63,001.
   
2. The 47 per cent threshold will increase to $95,001

1. The 42 per cent threshold will increase again to $70,001.
   
2. · The 47 per cent threshold will increase again to $125,000.

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