Key Points:

The current global financial crisis is one of the most serious events the New Zealand economy has faced for decades, says a new report prepared by the NZ Stock Exchange and the NZ Institute thinktank.

And it says New Zealand's response to the crisis needed to be "deliberate, serious and proportionate".

"The response must be about more than battening down the hatches ... We should see this as an opportunity to position the economy for the longer term, as well as manage the risks."

Titled " Economy on the edge: Swan Dive or Belly Flop? A draft strategy for coming out of the crisis stronger", the report lays out a series of Government actions.

NZX chief executive Mark Weldon has been critical of New Zealand political leaders inaction during the current world financial crisis.

The main points of the plan are:

1 Defer all provisional tax payments for next 24 months. Credit rationing, combined with provisional tax payments and associated uplifts will put companies under pressure and result in significant job losses. Deferring provisional tax will make a positive contribution to keeping firms viable and jobs intact.

2 100 per cent depreciation of capital investment. The speed and strength we come out of the recession will be determined by the amount of capital investment firms make. With credit rationed and cash flow threatened, the recession here will deepen unless capital investment is prioritised and incentivised.

3 Bring talented Kiwis home. Create a two-year tax rebate to cap income tax at 20 per cent for returning Kiwis who have been away for over three years. This is the best time to recruit our own back.

4 Attract new firms to New Zealand. Firms that are not here do not pay tax. If firms move here, with more than ten people, give them two years of no company tax. Financial, IT and environmental/science-based firms can move easily as they are essentially just people + broadband.

5 Retain the R&;D tax credit, to ensure that R&D investment is made in New Zealand.

Other suggestions in the plan include converting KiwiSaver, currently a voluntary scheme, into a compulsory retirement savings plan.
It also calls for tax "bias" that favours housing speculation to be eliminated.

Another plank of the plan is to put all the SOEs together into a "KiwiCo" - similar to Singapore's Temasek Government owned investment company.

"It could tap capital markets to secure expansion funding and could float partial stakes to finance growth. Strong legislative protection would ensure that any equity capital raising at KiwiCo was limited to 25 per cent, and at portfolio company level was limited to minority proportions," says the document.

"We make a special plea that both parties consider this proposal on its merits, rather than on the basis of leftover arguments from the 80's and 90's - it really is time to move on and address the new realities."