NZ's debt to rest of world grows

Net foreign liabilities - a measure of what New Zealand owes the rest of the

 world - rose to $150 billion or 71.7% of GDP in the year according to a Radio NZ report

For a small economy, distant from world markets and reliant so heavily on one export sector this news should be cause for concern.  We need a coherent strategy to develop at least two other major export sectors.  ICT looks as if it could grow into one of those.  Either way an economy owing so much to offshore financiers will remain vulnerable to external shocks until it has a plan to diminish that vulnerability and then executes against that plan.

One element towards a comprehensive solution is that the government must get back to surplus at the earliest opportunity.  But wouldn't it also be smart to look to the private sector savings levels and reduction of household debt to contribute to this overseas-debt reduction cause?

Businesses opposed to new tax on mobile technology

Inland Revenue's latest tax tightening proposals will hit smaller businesses the hardest with extra compliance costs, the Employers and Manufacturers Association says in a recent EMA media statement

"The impact of the new taxes on car parks along with the proposal to tax the personal use of mobile phones and laptops will aggravate compliance costs for all businesses but especially SMEs," said Kim Campbell, EMA's chief executive.

"It's absolutely not worth IRD proceeding with this.  A recent national survey of ours found 47 per cent of employers allow the personal use of smart phones, and 35 per cent allow personal use of tablets and laptops provided for business purposes."

Certainly if you accept the principle that governments should tax those things they want less of then taxing mobile technologies seems like a backward step in the move towards more efficient 21st century business practice. 

The IRD should not be trying to determine the extent to which households or businesses should use new technology. That is the practical effect of this tax proposal.  Like the carpark tax the costs and unintended distortions of this new tax proposal outweigh any meagre benefits.  

Disclaimer: the author is employed by a telecommunications provider.