By ELLEN READ
The Irish experience suggests that the first thing New Zealand must do if it wants to join the global knowledge economy is reduce its corporate tax rate.
"That is the first obstacle," says Irish technology and innovation guru Edward Walsh.
"New Zealand needs to make the basic decision whether it wants to join the knowledge age and be a global player.
"If it does, I have no doubt New Zealand has a special niche."
New Zealand's corporate tax level is 33 per cent, and Finance Minister Michael Cullen has ruled out any reductions during the current parliamentary term.
In Ireland, manufacturing companies are taxed at the special rate of 10 per cent, as are companies in two development zones.
Companies with trading income not more than £I200,000 ($527,800) are taxed at 12.5 per cent, and general corporates have their trading income taxed at 20 per cent. Non-trading income is taxed at 25 per cent.
Such low across-the-board tax rates are relatively new in Ireland.
At this afternoon's Competitive Auckland forum, Dr Walsh will make the keynote presentation by pre-recorded video link.
Almost 200 leaders from business, education and the community will attend the forum, aimed at endorsing Competitive Auckland's economic recovery strategy and receiving ideas about the final phase of the project.
Competitive Auckland issued its proposed business growth strategy for Auckland last Friday.
It focused on: six key industries for growth, the attraction of international businesses, the creation of a local business hot-house and investment in education and skills as the pillars of prosperity.
Should New Zealand decide to step up to the plate, a strong co-ordinated approach would be needed from the business, Government and education sectors to effect the change, said Dr Walsh.
Dr Walsh is chairman of the Irish Council for Science Technology and Innovation, which advises the Irish Government on science policy.
He will tell this afternoon's forum how Ireland lifted itself from its economic knees, and suggest lessons that New Zealand should take from that.
The big difference between Ireland's economic success story and New Zealand's present situation was the presence of huge American multinationals, which created a lot of wealth and jobs, Dr Walsh said.
To move forward, New Zealand had to work on attracting these. Slashing corporate tax rates was the first step, he said.
"New Zealand has a fantastic education system, a good quality of life and it's English speaking so there are tremendous opportunities in the knowledge economy," Dr Walsh said.
"But it must move swiftly."
He said taxes and people had driven Ireland's success.
Ireland's universities were very focused. They anticipated the future staffing requirements of the US multinationals, resulting in a "remarkably well-skilled" workforce, Dr Walsh said.
"New Zealand has a fantastic research tradition to build on, but perhaps the universities need to focus more," he suggested.
He said New Zealand needed to add to the base it already had of "wonderfully managed indigenous enterprises," and attract the large multinationals, so that it had the best of both worlds.
"I think they would come. You wouldn't have to spend a lot promoting New Zealand," he said.
He acknowledged that the EU is a factor in Ireland's success, but would not accept that New Zealand's distance from to other markets was a major hindrance.
He said the country's reputation and quality of life could offer other incentives, and that in the technological age, geography could be overcome.
Knowledge infrastructure was also vital - in terms of cable networks linking us with Southeast Asia and the Pacific.
Dr Walsh expressed some surprise at the level of competition between New Zealand cities.
He said that although some competition could be helpful, it appeared to be a little on the parochial side.
After today's forum, Competitive Auckland will next month release a detailed plan of attack for rejuvenating the region.
"From the Irish and other international experience, we know that incremental growth is not sufficient to produce what is required for Auckland to be an international city," said David Irving, Competitive Auckland chairman. "Significant initiatives are needed.
"Auckland must be a region known for its export capability, and cannot continue to be a self-serving city. We cannot sit back and wait for world business, we must make it happen," he said.
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