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Corporate welfare is an ugly thing

8 February 2017

Nationalise the losses, privatise the profits - that's the mantra of corporate welfare and you'd think that in a country as sweet and virginal as New Zealand, such thinking would be an anathema.

Sadly however, it is anything but -- at least at the level that our politicians in both local and central government operate.

Take the Peter Thiel case for example.

There could be a case for arguing that it's worth selling citizenship (as NZ does) if, in return, there was a gross benefit to the country. Let's face it, having persons of high net worth living in NZ and spending large amounts of their wealth here has the potential to create jobs, boost the economy and make the nation as a whole somewhat wealthier.

This is why we granted Kim Dotcom residency and allegedly why we fast-tracked a back-door citizenship for Thiel.

However, now it has been revealed that we were perhaps big losers on the deal and Thiel came out streets ahead -- to the cost of Kiwi taxpayers.

How does that work out as being in the best interests of those hard-working Kiwis that struggle to make ends meet and are still handing over huge swathes of their earnings to the government by way of tax?

Well I won't regurgitate the facts and assertions already made in stories already published by the mainstream media but it seems that the bottom line is that we are blessed with politicians and bureaucrats who couldn't organise a fart in a bean factory.

Do these idiots get star-struck every time someone with a wallet bigger than theirs arrives in the country? Star-struck to such an extent that they come up with deals which effectively hand over huge chunks of *our* money whilst pretending to be doing the opposite?

I've seen it happen at a local government level and the "Thiel deal" shows that it's some thing which is perhaps endemic throughout all strata of governance and bureaucracy.

What's just as bad in this case is that nobody within the ranks of government seems prepared to take responsibility for the fiasco that has resulted. Joyce says it was a previous Labour government and Labour say it's entirely down to the Nats. Hell, if they don't know (or refuse to admit) who is responsible, what's to stop this kind of idiocy happening again?

Perhaps it's time we scrapped the concept of corporate welfare completely. After all, why do companies with multi-million dollar (sometimes orders of magnitude more) turnovers need handouts from the taxpayer?

Take companies such as F&P for example. I recall that they received a very tidy $3m from taxpayers some time ago -- allegedly to help fund some kind of research.

Excuse me? F&P is a very successful company which has increasingly moved its operations offshore -- so why were we rewarding them with a handout? If anyone could raise the necessary funds on the open markets, it was them.

As long-time readers will likely recall, my own encounter with "government funding" really opened my eyes to just what a joke this is. Back in 2000 or so, I applied for and was awarded a "technology grant" for developing an idea I'd been working on for some time. Sounded great -- $36K to help get this concept to the proof of concept stage.

Sadly, the hooks and strings associated with the spending of that money made it utterly impractical to use. If I'd complied with all the strict requirements I would have spent more time doing bookwork (rewriting my development program every time the results of a test suggested a slight change of direction) and I would have wasted most of the money by being forced to outsource the work I could have done far more efficiently myself.

It was clear that those administering these grants didn't have a clue what real research and development involved and how people like myself had become very good at husbanding our financial resources so as to get maximum benefit. They were attempting to get small-time developers to operate like large, top-heavy corporations -- which was clearly a huge waste of money and time.

As a result, I refused the grant, figuring that my own time and money was too important to waste building a huge pile of paperwork and lining other people's pockets.

Similarly, the funds administered by Callaghan Innovation very much appear to be gifted to those with "the right connections" rather than those who could best use that money and help to develop technologies that would benefit the country as a whole.

I'm sorry but it seems that all the canny, savvy business people are not in the least bit interested in working in/for government and as a result we tend to get (with only the occasional exception) buffoons who come up with deals such as the one which has made Mr Thiel tens of millions of dollars richer -- at taxpayers' expense.

We're told that NZ is the least corrupt nation on the planet -- but it sure as hell seems we're also one of the stupidest.

Readers views? Should we be diluting the value of our passports by selling citizenship to anyone with a fat wallet or will this keep coming back to bite us on the arse -- as it appears to have done so with Mr Thiel and as it did with the residency of Mr Dotcom?

Is it the responsibility of those working on minimum wage to have a chunk of their hard-earned cash taken by government (in the form of tax) and thrown at those who are already obscenely rich by way of corporate welfare?

Or is it time for government to get back to its knitting and ensure we have police, public health, free education, a sensible level of welfare support and just the other "core services" that governments should be focused on?

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