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Cullen Insult Final Straw - Aardvark To Depart

Cullen Labels NZ Business Community As Latent Tax Cheats


By Bruce Simpson
Aardvark.co.nz
8 June 2000 Edition

According to our Finance Minister, Michael Cullen, I, and the many thousands of other New Zealand entrepreneurs and businessmen, are a bunch of scheming, plotting would-be criminals who, if given half a chance, would enjoy nothing more than to rip off the taxpayer by committing tax fraud on a huge scale.
That is the justification he gave yesterday for going back on a pre-election promise to give NZ's industries tax parity with their overseas peers in the area of research and development expenditure.

It seems that Mr Cullen believes that we're all going to see such tax parity as a giant loophole to be exploited to the detriment of New Zealand.

I wish Mr Cullen wasn't so ill-advised as to judge the rest of New Zealand by his own standards of honesty and integrity -- or the lack thereof.

Quite frankly I, and no doubt a huge number of other Kiwi businessmen, feel highly offended by the Minister's remarks -- and are extremely disappointed, albeit not particularly surprised by his blatant breaking of a contract forged with voters.

If anyone is committing a fraud on the nation's coffers then surely it's this bunch of failed school teachers and career politicians who are paid to represent the citizens of this country -- but who instead have chosen to totally ignore the results of referenda such as those held at the last election.

Were it not for the fact that I'm now very busy exploring the option of relocating myself and my business activities to the USA, I would likely drum up support for a class-action defamation suit against Mr Cullen for the slur he has cast against the business community.

But why am I preparing to abandon NZ? It's not just because I don't like being told that I and my peers are just latent criminals, it's more because I now hold very little hope that this country will successfully transition into the 21st century while it remains in the hands of politicians with a 1950's mindset.

Cullen had the chance to honour a commitment given to voters while simultaneously giving the business community a glimmer of hope that this government was prepared to do more than spew rhetoric over the matter of creating and fostering a new economy -- but he chose the dishonourable and "easy" way out.

So now, instead all NZ businesses enjoying a level playing field with their competitors in the USA and Australia, Mr Cullen has labeled us criminals and decided that it's better to dip into the taxpayer's purse and play favourites by handing out "grants" to those deemed worthy of such favours.

Under Cullen's system, an agency, or agencies of the very government that doesn't bother fund its own website properly and which is populated by a raft of ministers who can't even reply to an email, is going to decide who is most entitled to a hand-out. Given the long list of covert dealings, incompetence, and impropriety that has been uncovered in NZ's political system and state-run bureaucracy over the past few years can we really be sure that these grants are going to be handed out on merit rather than on the basis of political debts which need repaying, special handshakes or the old school tie?

Cullen is quick to accuse the business sector of potential criminal acts -- how is he going to ensure that the agency(s) handling these grants isn't going to get involved in an INCIS, WINZ or Lottery-board type of bungling that disadvantages the taxpayer -- as they have done before!

My God! Instead of a nice simple system that would provide all players with a level playing field, they're going to start playing favourites with taxpayers money and put anyone wanting a break through God-knows how many hoops and hurdles in order to get one of these grants.

Neither I, nor many of my peers have ever asked for government hand-out. We haven't even asked for full equity with those countries that actually offer a tax credit on R&D expenditure -- all we wanted was for R&D costs to be treated like any other legitimate business expenses and be considered non-taxable.

Let me tell Mr Cullen -- the vast majority of R&D is being done by small businesses or individuals who simply don't have the time to fill in endless forms and deal with mountains of red tape just in order to secure one of these "grants" they didn't want in the first place. The one thing many entrepreneurs have even less of than money is time!

This means, despite what Mr Cullen says, that the vast majority of these grants will doubtless go to the larger business and CRIs who can afford to simply allocate someone on their staff to deal with the processes and frustrations of doing all the paperwork, battling the bureaucrats, and jumping through the hoops -- the little guys who need the level playing field the most will miss out completely. Rather strange for a government that is widely seen as being opposed to big business don't you think?

Eighteen months ago I seriously considered moving to the USA out of fear that NZ's government was completely ignorant of what the new economy could offer the country and its citizens. I chose to stay -- and in the process my business created jobs for several hard working Kiwis and contributed around a quarter of a million in tax to the nation's coffers.

To be frank -- I was bloody stupid!

If I had gone with my gut instinct and not been stupid enough to hope -- in the face of overwhelming evidence -- that maybe, just maybe, the government would wake up in time to get this country moving, then I have little doubt that I'd now be one of the many "dot com millionaires" living in California and driving a Porsche. Instead, all I've done is work my arse off and pay lots of tax while constantly trying to cope with the bureaucracy, red tape and trip-wires that this and the previous dim-witted governments have insisted on retaining or adding to the already perilous terrain Kiwi entrepreneurs have to negotiate.

Do you think I'm wrong? How many new Kiwi Net-millionaires do you know of -- and almost all of those who have made it (such as Steve Outram who is now worth a couple of hundred million dollars) have had to leave the country to do it.

Trust me... it's a mistake I am not prepared to make again.

I still have a list of good ideas as long as your arm and I've already had some strong interest from the USA. Some of these ideas will make 7am.com look like a personal homepage in terms of their commercial potential. It's a shame that it will be the poor and underprivileged in some other country that benefit from the huge tax dollars these ideas will undoubtedly generate.

I would have loved to have stayed here and let these businesses earn wealth for this country and help NZ's poor and disadvantaged -- but Mr Cullen has decided he'd rather play silly political games than honestly consider the best interests of this country and its people. He is shooing our most skilled, talented and motivated people out the door at a time when the country can least afford to lose them. The man is either incompetent or stupid -- I suspect he's both!

Heaven help those who are left behind -- they're going to need it. I give New Zealand just three years before something rather major, even terrible happens at a political level (coup anyone?) as the population becomes increasingly driven to despair by a falling standard of living and increasing divide between rich and poor -- produced solely by our hopeless politicians and their self-serving greed, ignorance and scheming.

(c)Aardvark 2000. Republished with permission

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