New Zealand is inadvertently making the case for more competitive Australian federalism
Labor’s 1942 centralisation of income tax stripped the states of their fiscal sovereignty. As it courts Australian startups and businesses, New Zealand is exploiting the vacuum.
“Australians looking to start or grow a business have an epic opportunity, and that opportunity is to do it in New Zealand. No capital gains tax, very simple tax system, broad base, low rate — we keep it simple, we allow you accelerated depreciation and deductibility on your capital investments … Where the bloody hell are ya? If you’re an Aussie, come over.”
Those words, from New Zealand Finance Minister Nicola Willis, deserve to land hard on every state premier in this country, and yet the more important observation is not the offer itself but the fact that it can be made at all.
This is not merely a business recruitment pitch directed at the Australian public. It is a warning shot to state governments that have spent the better part of eight decades collecting the spoils of federal largesse while, in the process, abdicating any serious responsibility for competitive economic policy.
Minister Willis can make this offer precisely because of the Trans-Tasman Travel Arrangement, which provides freedom of movement and employment between the two nations’ citizens, and it is a standing invitation that requires no further legislative action to activate. The more pressing question, however, is why, in a federation of six states and two territories spanning an entire continent, no domestic government is in a position to make a comparable one to its own citizens.
