Ministry of Finance Economic Recommendations

Day 1,052, 06:23 • Published in New Zealand USA • by Necros Xiaoban

Dear Sweet New Zealand,

I'm so glad to see you could join us here in New Zealand and look forward to working with you in the future ^__^

The Ministry of Finance, in conjunction with the Ministry of Trade has been working to gather the data necessary to provide the People of New Zealand with the information they need to make rational, beneficial career choices and business decisions, and allow Congress to formulate economic policy.



Raw Materials Production

New Zealand has one High Grain region, and one Medium Iron region. It is the recommendation of the Ministry of Finance that anyone interested in investing in raw materials in New Zealand focus solely on the production of Grain. Any grain companies should be placed in Auckland, in order to take advantage of its production.

Notably, the Ministry of Finance strongly cautions against the creation of Iron companies in New Zealand. Domestic Medium Iron is not competitive with imported High Iron, and wastes valuable NZ production which could be used in Grain or Manufacturing production.

Workers should avoid working in any Raw Materials company that is not Grain. These companies are subpar, their owners have demonstrated ignorance of how to run a company, and the companies must inevitably be allowed to die.



Manufacturing

The Ministry of Trade is working hard to encourage the export of Raw Materials to New Zealand to allow the development of our manufacturing capacity. If you're impatient to get a manufacturing company going as soon as possible the Ministry of Finance recommends you create a Food company, as domestically produced Grain should be almost immediately available.

Additionally, whatever you choose to manufacture, it is highly recommended you aim for the highest quality level you can afford to upgrade to. High quality manufactured goods will likely be in short supply, especially domestically produced high quality goods. By investing in upgrades you place yourself in a better position financially and also strengthen New Zealand's export opportunities.

The Ministry of Finance cautions against the creation of moving ticket companies as they typically in weak demand and can be easily transferred by donations from other countries without the need for an export license to meet the needs of our military and ATO operations. As such the Ministry of Finance does not expect a strong domestic market for moving tickets to grow before we begin engaging in regular warfare, if ever.

Another market the Ministry of Finance cautions against is low quality weapons manufacturing. The international markets are absolutely saturated with overstocks of low quality weapons, with little demand for them. While prices for these weapons may initially be relatively high, foreign exporters will soon take advantage by purchasing export licenses and soon lower the price of these goods below the cost of production.


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Taxes

Import Taxes
Some take the view that by raising import taxes we relieve pressure on the domestic companies, which allows the price of goods to rise, which will provide higher wages to workers.
Unfortunately, that view is nonsense. The joint postion of the Ministries of Finance and Trade is that low import taxes keep prices of goods low, because citizens end up paying the absolute best price the world can offer them. This increases spending power, and allows citizens to buy more goods. It also places pressure on companies in weak or over-saturated markets to close, and opens companies in new, stronger markets where goods are needed. This strengthens our export markets by focusing our workers producing products that can't be obtained elsewhere.

If we implemented higher import taxes, pressure on domestic companies would ease, and prices would rise. However, instead of workers making higher wages, companies would be more likely to pocket the additional revenue, which serves only to decrease cash flow through the system, and leaves the poor poorer.
Additionally, we would not increase tax revenues. High import taxes will simply discourage foreign exporters, and they will not sell their products, and we will not collect the tax.

As a fledgling economy we must import. We need imports of raw materials in order to develop our manufacturing base, and we need imports of manufactured goods to meet our demand until domestic companies can catch up, and thereafter to keep those same domestic companies in check.

Low import taxes are also a godsend during large battles. Even a massive battle like Western Siberia doesn't send food prices soaring because we import products from all over the world. We can continue to buy food, weapons and moving tickets even in the midst of a demand spike, because the supply-side is so strong.

It is the recommendation of the Ministries of Finance and Trade that Congress impose a 1% Import Tax on all materials and goods, including grain, and make it clear that we fully support this policy, and will continue it indefinitely.

By proclaiming to the international business community that New Zealand intends to remain a free trade economy we will more easily attract export licenses, and more goods to our markets, driving prices down and offering our citizens more choice.



VAT Taxes
There's a lot of inelastic demand in certain market sectors. Simply put, there are certain goods everyone has to buy, regardless of what it costs them, like food, or moving tickets for those who are mobile in military or political affairs. Raising the VAT raises the price of goods, which hurts the newer, low skill, low wage players most. For higher skilled, better paid players the rise in prices represents a smaller percentage of their disposable income. It essentially put the greatest burden on players who are most likely to pack up and leave the game.

It is the recommendation of the Ministries of Finance and Trade that Congress impose a 1% VAT on all goods.



Income Taxes
Congress should consider Income Taxes as their sole source of tax income. The beauty of the income tax is that it taxes all players as a flat percentage of their income, placing a relatively small burden on new players, while pulling in revenue from older, more experienced players who can afford it.

As for how high the Income Tax should be set the Ministry of Finance recommends Congress, in conjunction with the President, consider how much revenue they need to meet their projected expenditures.

To give an example, if New Zealand has 200 active workers earning an average of .1 Gold per day, they will earn 600 gold in a month. At 10% Income Taxes, they would generate 60 gold a month. At 20%, they would generate 120 Gold. As income taxes rise, the government obviously derives more revenue.

However, it is the view of the Ministry of Finance that the maximum productive tax level lies between 23 and 25%, at which point younger citizens lose their ability to provide for themselves and begin requiring government assistance to maintain their wellness. Furthermore the Ministry of Finance does not believe New Zealand currently has the manpower to devote to regular mass distribution of food to it's citizenry on a daily basis, and councils against such an approach.

New Zealand will likely want to MPP with other nations, and the costs of those MPPs should be considered. Without opening any battles or declaring any wars, New Zealand will require at least 300 gold per month to achieve a minimum level of comfort via MPPs, assuming other nations will be willing to pay half the cost of the MPP




Please be prepared to take all of this information with a grain of salt. Always research your investments yourself, as the markets are subject to change, possibly radically.



Sincerely,
Necros Xiaoban
Minister of Finance