Originally Posted by
elZorro
Neither. We have a wide range of skill levels over here, so we need manufacturing to provide employment and exchange earnings. Unlike yourself and FP, I don't view small tax incentives and part-grants as protection and government intervention. It is simply a deliberate attempt to quicken up policy and direction changes in the private sector. When done well, the outcome is an even greater tax return and a stronger economy , so this is not a waste of taxpayers money, it's quite the opposite.
I don't think either of you have been manufacturers yet, but can you imagine what would incentivise a business owner to keep making a particular product that sells well, but at a small profit because of competition, and use what is left of his/her capital to do some R&D on a new export product that might or might not sell, and might or might not have a better profit margin when it is ready to go, perhaps 1-4 years down the track. There could be well over $200,000 spent by then, on just a small product. F&P have spent 10 years looking at the next generation washers, they expect to spend $20-30mill on the development to complete it by 2016.
FP, most small businesses are working too hard just keeping the cashflow moving, to think about R&D, they will never go there without a push in the general direction. A tax incentive is the easiest way, and it's non-intrusive.