The current global financial crisis is one of the most serious events the New Zealand economy has faced for decades, according to a new report.
The draft report, released Friday by the New Zealand Institute and NZX, said New Zealand's response to the crisis needed to be "deliberate, serious and proportionate".
"The response must be about more than battering down the hatches... We should see this as an opportunity to position the economy for the longer term, as well as manage the risks."
The report suggested provisional tax payments be deferred for 24 months, capital investment be "prioritised and incentivised", a two-year income cap tax at 20 per cent for New Zealanders returning home, firms be attracted to New Zealand with two years of no company tax and the Research and Development tax credit be retained.
In the longer term the report said a company should be created to manage commercial state owned enterprises, a taxpayer savings vehicle be created to manage financial assets, KiwiSaver be made compulsory and the biases in the tax code that promotes housing speculation be removed.
New Zealand's response to past crises were the "insular" policies of Think Big and protectionism, the report said.
"Our lack of appropriate response then led us to the economic brink a decade later. We now face the same risk.
"We believe there is little we can do about Northern Hemisphere banks, there is a lot we can do to determine how well the New Zealand economy copes with permanent changes to global credit markets and a global economic slowdown."
