Today, we continue our Politics of Angel Investment series with an interview with Rodney Hide, the leader of ACT.
ACT’s policies revolve around reducing government. It’s a simple message, easy to understand, and clear in its impact on investment and innovation. They want to reduce taxes, government expenditure, and the impact of government on our daily lives, leaving us to get on with the job in our selected spheres of expertise, and sinking or swimming on our own merits.
Rodney’s key points:
Entrepreneurs drive the entire economy
Governments are incapable of predicting which ideas are going to be great
The main task is to grow the economy, and catch up to and surpass Australia
Key policy areas:
Fiscal: reduce government spending – taxpayer rights bill would cap government spending at rate of inflation
Regulatory: reduce rules and regulations; they stifle innovation — regulatory responsibility bill protects property rights and freedom to contract
Education: Break state monopoly in education; fund students not schools – that would enable innovation to flourish
The state should be right out of business; they should stick to core business of providing police force and critical infrastructure. Ministry of Economic Development would be disbanded; if state planning worked, the USSR and Korea would have been staggering successes.
Taxes should be as low, flat, broad, and neutral as possible. In an ideal world you should be able to run the state on GST and get rid of income tax. If you have to have an income tax, it should be flat. The worst tax you can inflict on an economy is a capital gains tax, which is especially bad for entrepreneurs.
Broadband: Rodney disagrees with unbundling and the pretend split of Telecom and the constant regulation of the Telecommunications sector. ACT would pare back regulation to a bare minimum, especially the Resource Manangement Act.
Rodney closes by saying, “Angel investors, innovators, and entrepreneurs are the heroes of our economy … I salute them!”
Election year is upon us, and this week we’re starting a series on the Politics of Investment and Innovation. Over the last two months, we’ve canvassed the positions of the significant parties in parliament on their approach to investment and innovation.
The Greens, ACT, NZ First, Labour, and National all happily provided their best spokespeople on these subjects, which in some cases left us with with the impression that they were pretty thin on the ground in these areas. The Māori party were a no-show, despite numerous attempts to connect with Dr Pita Sharples.. The interviews are presented in the chronological order in which they were conducted.
We’ll be releasing one party interview each week over the next five weeks, so that you can contemplate how well each party grasps the core issues and engage in lively and informed discussions with your colleagues. This will be followed up with a summary podcast at the end of the series.
This week we start with Russel Norman, co-leader of The Greens. As you know, Russel is new to the leadership game, and the Greens being a small party with an agenda focussed on sustainability issues, they don’t have well-developed policies in this area. For all of that, I was struck by Russel’s openness and willingness to incorporate new thinking into the Green agenda. After the interview was over, he said that he was seeking assistance from interested investors to help The Greens with policy formulation.
Key positions:
To encourage innovation in the “right” areas:
The right pricing structures need to be put in place
The right tax incentives need to be in place
Publicly funded science research should be shored up
The Green Revolution is where the future of business should be.
The broadband backbone should be publicly owned as a key piece of national infrastructure; National and Labour haven’t gone far enough with their current policies
The Greens support a capital gains tax, excluding the family home, and possibly investment into “higher risk R&D-type investments”.
Foreign Direct Investment is good, but not where it results merely in the extraction of dividends overseas. The Overseas Investment Office says “yes” too often now, and would be encouraged to look closely on the net benefit of each investment to the NZ economy.