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Not a problem, an opportunity!

Once again, a massive opportunity in the online world is being treated like a problem by government.

Reports were published yesterday in which the Finance Minister Bill English was quoted as saying "The most urgent issue is not the large end of town, it's the small end of town, it's hard-working mums and dads spending on the internet" in an attempt to defend his government's failure to implement measures that would see big multinational corporates properly taxed in this country.

What is Bill smoking?

This is, of course, a traditional dim-bulb strategy. Don't even try to defend your position on the low tax-rate paid by the Googles, Facebooks and Starbucks of this world -- instead try to pretend that the lack of tax-take is the fault of those least able to lobby and entice politicians with offers too good to refuse. Yes, of course -- it's all *our* fault -- the people who already pay tax at a rate that is many times that of those corporates in the first place.

It seems that it is our online spending that is eroding the tax-base, not the fact that Facebook paid just $30K to the IRD on the profits it made from NZ last year.

It seems that Bill believes "attack is the best form of defense" - but he's sorely mistaken.

He sees international online retail sales as being a major threat -- however, in reality, it is a *major* opportunity for this country.

What is wrong with cultivating the natural Kiwi entrepreneurial spirit and creating incentives that would see NZ businesses setting up highly profitable online retail operations that target overseas markets and earn us big export receipts?

This would, of course, require some help from government -- perhaps in the form of subsidised postal rates -- because right now, those postal rates effectively kill any small exporter that tries to ship overseas.

Why is it that I can buy a bluetooth adapter for US$1.64 (NZ$1.98), (including shipping) from China and have it delivered to my door for much less than the NZ$2.40 I have to pay for postage alone on a small letter headed in the other direction?

That's simple -- it's obvious that China supports its exporters by keeping the costs of international outbound postage to a minimum -- why shouldn't we do the same?

What we might lose in the form of NZPost profits, we'll gain back many times over in the form of export receipts and taxes paid by profitable cyber-selling NZ retailers.

Of course the big question is: what can we sell?

Ideally, we ought to be selling intellectual property - since then there isn't even the cost of postage to deal with. Fulfillment can be done over the Net (isn't that what the UFB ought to be for?).

So how do we come up with the type of intellectual property that the rest of the world will be clamouring to buy?

Gosh, I seem to recall that back in the late 1990s, we were told there was going to be a knowledge wave. The government of the day was going to back NZ's knowledge economy to the hilt and turn this nation into a world-leader.

Obviously that was a load of hollow rhetoric -- and what a shame it was because if they'd only followed through with that promise, perhaps Bill English would be announcing that the tax rates for all Kiwis would be falling, due to the massive export receipts we'd accumulated over the past decade or so. Perhaps he'd also not have had to sell-down public ownership of our valuable power generation assets and perhaps both National and Labour would have at least *something* other than bribes and threats to offer voters this year.

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