If National wins ...

[gv1]

And..that is not far off bad times, just as our neighbour/cousiz are experiencing. Mergered all Ackld councils, costs/rates have increased. No accountability at ACC, management doing any and everything they want. Everywhere costs are rising without any end...

[iceman]

Didn' ACC levies reduce on April 1 ?

And..that is not far off bad times, just as our neighbour/cousiz are experiencing. Mergered all Ackld councils, costs/rates have increased. No accountability at ACC, management doing any and everything they want. Everywhere costs are rising without any end...

[craic]

If you watch Homes Under the Hammer on the living channel you will learn about the benefit of managed debt. Characters on there buy houses and flats in various states and renovate them with, in many cases, the intention of building up a portfolio of rental properties - some at quite an early age will say that they have ten, twenty or more houses and are continueing to build with banks only too ready to lend them money even though may not have paid off the last half-a-dozen houses. Eventually they stand to be very well off as the rents clear their debts. That is precisely what this and every other government does. This country is well off because we have well managed debts - being debt free is consistent with stagnation. As to throwing good money after bad, my bank fees this month so far stand at about $800. Someone is making a profit out of me but as long as my share is bigger, I don't care.

[gv1]

Didn' ACC levies reduce on April 1 ?

Its because of them investing in s/market. But for how long.

[Daytr]

I would agree with you Craic, if NZ government assets weren't being reduced at the same time!
When you create a property portfolio with debt your asset base & revenue base both expand to service the debt.
Economics 101 here. What we have is a government selling assets & increasing debt at the same time & revenue is about to take a hit.
That's just bad business.

If you watch Homes Under the Hammer on the living channel you will learn about the benefit of managed debt. Characters on there buy houses and flats in various states and renovate them with, in many cases, the intention of building up a portfolio of rental properties - some at quite an early age will say that they have ten, twenty or more houses and are continueing to build with banks only too ready to lend them money even though may not have paid off the last half-a-dozen houses. Eventually they stand to be very well off as the rents clear their debts. That is precisely what this and every other government does. This country is well off because we have well managed debts - being debt free is consistent with stagnation. As to throwing good money after bad, my bank fees this month so far stand at about $800. Someone is making a profit out of me but as long as my share is bigger, I don't care.

[elZorro]

I would agree with you Craic, if NZ government assets weren't being reduced at the same time!
When you create a property portfolio with debt your asset base & revenue base both expand to service the debt.
Economics 101 here. What we have is a government selling assets & increasing debt at the same time & revenue is about to take a hit.
That's just bad business.

Good point Daytr, they're selling off Crown assets and still not balancing the books. Imagine if they had to fund the normal requirement for new schools from their income alone.

But the govt is trying to boost R&D funding, $80 mill extra is the news.

http://www.scoop.co.nz/stories/PA150...rd-funding.htm

Read the fine print, it's $80mill over 4 years, so it's $20mill p.a., and that funding will only go to big business, or well funded business. Each business needs to fund the other 80% of the R&D, they need to spend at least $300,000 regardless, per year, on R&D.

All this means that $356mill has been allocated in govt R&D grants to just 152 businesses. An average of $2.34mill per business. These are not small startups, these are already well-funded businesses, who, it could be argued, will be doing the R&D anyway to hold market share, and because of sharemarket listings, ongoing strong sales and other means, have plenty of access to cashflow.

There are other fund pools that a smaller business can access, but the above example is where a lot of the funding goes. One or two of the recipients of these grants also provide some of their building space for National's election after-parties. Cosy.

On page 5 or 6 of this big list are about 57 businesses who have each been allocated up to $15million over four years. If they all take up the funding, it'll cost the taxpayer $855mill (minus taxes returned, sure) to support 57 businesses, many of whom are listed, overseas owned, or are well established after decades of trading.

https://www.callaghaninnovation.govt...May%202014.pdf

I have no grumble generally with the smaller grants, many of which fund tertiary students through their holidays. Except there could be more of them.

Anyway, next time you see some poor community house or service crying out for a few $100k of funding to keep their free public good service alive, and the govt drops back on previous support citing a shortage of funds, think of the bigger numbers on that list.

[craic]

Selling assets - those that are not as profitable as you imagined - is good business. It frees funding for other purposes. Funding small businesses is also a mugs game - few last the distance. Funding established business for research and development is a wiser use of funds. I know that Labour would have the country in some sort of a paradise in no time flat according to their supporters but after several lengthy cracks at it, the voters judged them to have failed. As to Economics 101, not this lad. My papers were in psychology,history and education. And they were mostly C passes.

[Daytr]

Well that depends what price you get. The power companies were returning a double digit return. Effectively the government had a an additional tax on the nation which imo was wrong in itself. Some government assets are their for social reasons not to return a profit, something National seems determined to change at any cost, socially, environmentally & financially.

[craic]

All I know is that I sold the same asset twice this month and bought it back twice for a little over two G's less than I sold it for and that is net, after all the pipers had been paid. This particular forum is just an aside between my predatory activities on the net.

[elZorro]

All I know is that I sold the same asset twice this month and bought it back twice for a little over two G's less than I sold it for and that is net, after all the pipers had been paid. This particular forum is just an aside between my predatory activities on the net.

But the govt can't act like that in general Craic, they have to take a longer term view.

Treasury is calling for the govt to have another look at CGT on housing. The proportion of Auckland homes sold to investors has gone up from 33% to 38%. They are now poor paying investments, so the main reason investors buy them is for capital gain. Very few of them are caught in a capital gains tax, as they hold them longer term.

http://business.scoop.co.nz/2015/04/...k-housing-tax/

Unedited article on John Key's address, from NZResources:

15/4/2015 — Economics, Politics and Government Key points to a vibrant future

Prime Minister John Key told a meeting of business people in Wellington yesterday that a reason why the economy was doing well was that New Zealand was one of the fastest growing economies through the positive attitude of business and householders.
This, he said was all backed by the Government’s approach to business development.
Now the Kiwi dollar was close to parity with the Australian dollar for the first time in around 40 years – something that was unthinkable until recently.
“We’ve also seen net migration between New Zealand and Australia shrink from an annual outflow of 36,700 two years ago to just 2,600 in the 12 months to February. This is the smallest net loss of people to Australia since March 1992 – a combination of fewer New Zealanders leaving and more returning home.
“When we first came into office in late 2008, New Zealand’s economy had been in recession for nearly a year – well before the global financial crisis. Government spending had climbed 50% in just five years.”
At that time the scenario was net Government debt would exceed 60% of GDP by the early 2020s, with some forecasters talking about an unemployment rate close to 10%.
The economy grew by 3.5% in calendar 2014 – its best performance since September 2007. Annual core Government spending was just 14% higher now than six years ago – including the considerable cost of the Canterbury earthquakes.
Key said the Government was approaching surplus and net core Crown debt would peak at less than 27% of GDP before falling.
“Another 80,000 jobs were created in the past year and the unemployment rate is 5.7%,” he said.
He said NZ can become a country of opportunity that will encourage more young people to bring up their families here instead of in Australia or further afield.
Key said there needs to be a relentless focused on improving competitiveness.
This could be achieved by maintaining competitive tax rates and delivering better results from public services.
The 2015 Budget to be presented by Finance Minister Bill English was just over five weeks away and Key pointed out that the Government was given a mandate at the last election for more reforms.
“Our challenge over the next few years is to ensure the economy continues to outperform, year on year.
“Two of the most important ways we can achieve sustainable, long-term growth are through innovation and investing in the education of our young people.”
The 2015 Budget would set out further steps in both of these areas.
He said smart, innovative exporters are the key to a prosperous future so innovation will be one of six focus areas in the business growth agenda.
Government investment in research and development will total $1.5 billion this year – a 70% increase in eight years.
Key said the new Budget will provide another $244 million over the next four years to meet growing school rolls and to improve the quality of learning environments.
Four new State schools will be built - Rototuna Senior High School in Hamilton; a primary school in Rolleston, near Christchurch; and two primary schools in Auckland – one at Kumeu and the other at Scott Point.
There would also be three new kura kaupapa Māori schools. They will be in Whakatane, Gisborne and Hastings.
There would also be expansion of facilities and classrooms at four existing schools - Golden Sands in Papamoa; Hingaia Peninsula School in Auckland; Shotover primary in Queenstown; and Papamoa College in Papamoa.
In addition, the Government next year we will fund an extra 241 classrooms at other schools, with almost half of them will in Auckland.
In his summary he pointed out that wages were, on average, increasing faster than the cost of living, more New Zealanders are getting off welfare and into work and the crime rate is falling.

A more balanced version:

15/4/2015 — Economics, Politics and Government
Key points to a vibrant future?

Prime Minister John Key told a meeting of business people in Wellington yesterday that a reason why the economy was doing well (yes, trust me it's true) was that New Zealand was currently one of the fastest growing economies through the weirdly positive attitude of business and householders, a result of their good PR spin.

This, he said, was all backed by the Government’s approach to business development, which is to essentially allow big business to do the development, once funded by some taxpayer grants .
Now the Kiwi dollar was close to parity with the Australian dollar for the first time in around 40 years – something that was unthinkable until recently. It helps that the Aussies are doing quite poorly at the moment, the first time in many years.
“We’ve also seen net migration between New Zealand and Australia shrink from an annual outflow of 36,700 two years ago (even worse than Labour had it when we gave them stick) to just 2,600 in the 12 months to February. This is the smallest net loss of people to Australia since March 1992 – a combination of fewer New Zealanders leaving and more returning home. There are a lot less jobs over there, and many returning NZers have lost their well-paid jobs. They are returning because they have little choice.

“When we first came into office in late 2008, New Zealand’s economy had been in technical? recession for nearly a year – well before the global financial crisis. This was mostly because it had been performing so strongly in the previous years, but it entered a negative period in March 2008. Government spending had climbed 50% in just five years, but the tax take then was always suitable to allow a strong budget surplus, as business was thriving.”

At that time one pessimistic scenario based on doubtful figures was net Government debt would exceed 60% of GDP by the early 2020s, with some forecasters talking about an unemployment rate close to 10%. We have used this half-baked flimsy report ruthlessly for seven years.
The economy grew by 3.5% in calendar 2014 – its best performance since September 2007, but not as good as some years when Labour were in office. Annual core Government spending was just 14% higher now than six years ago – including the considerable cost of the Canterbury earthquakes, because we have screwed down every public sector we can get away with.
Key said the Government was approaching surplus and net core Crown debt would peak at less than 27% of GDP before falling. He apologised for taking the debt to this point, after Labour got it down to 5% of GDP by 2008. He admitted that Labour had a strong budget surplus every year they were in office and had reduced core crown debt to $10bill, (now over $70bill) but National were keener on reducing the top bracket tax rate and had been unable to grow the economy at the required rate after the GFC, while faced with higher immigration.

“Another 80,000 jobs of some kind were created in the past year (only keeping up with most immigration and higher labour force participation)and the unemployment rate is 5.7%, still higher than Labour's best result at 3.5%,” he said.

He said NZ can become a country of opportunity that will encourage more young people to bring up their families here instead of in Australia or further afield. We'd just like them to do that outside of Auckland, he said, so the housing prices wouldn't look so bad. He apologised for not ensuring regional job policies were in place to help with this.

Key said there needs to be a relentless focus on improving competitiveness, and the govt won't be doing that.
This could be mimicked by maintaining competitive tax rates and delivering better results from public services, needed to try and get to a long promised budget surplus.

The 2015 Budget to be presented by Finance Minister Bill English was just over five weeks away and Key pointed out that the Government was given a mandate at the last election for more reforms. (Watch out).
“Our challenge over the next few years is to ensure the economy continues to outperform at our new underperforming standard, year on year.
“Two of the most important ways we can achieve sustainable, long-term growth are through innovation and investing in the education of our young people.” But we won't be doing that either, no funds.

The 2015 Budget would set out further steps in both of these areas.
He said smart, innovative exporters are the key to a prosperous future, so innovation will be one of six focus areas in the business growth agenda (because we have to head Labour off in this policy area , therefore we'll fake something).

Government investment in research and development will total $1.5 billion this year – a 70% increase in eight years. Most of this funding has gone to big business, not spread around the SME sector, because we reckon smaller businesses are chumps.

Key said the new Budget will provide another $244 million over the next four years to meet growing school rolls and to improve the quality of learning environments. Charter schools will be rolled out as per our mandate.
Four new State schools will be built - Rototuna Senior High School in Hamilton; a primary school in Rolleston, near Christchurch; and two primary schools in Auckland – one at Kumeu and the other at Scott Point.
There would also be three new kura kaupapa Māori schools. They will be in Whakatane, Gisborne and Hastings.
There would also be expansion of facilities and classrooms at four existing schools - Golden Sands in Papamoa; Hingaia Peninsula School in Auckland; Shotover primary in Queenstown; and Papamoa College in Papamoa.
In addition, the Government next year we will fund an extra 241 classrooms at other schools, with almost half of them will in Auckland. Most of these will be paid for by the sale of state electricity assets, which were providing a good return.

In his summary he pointed out that some wages were, on average, increasing faster than the cost of living, while others were being held constant, more New Zealanders are getting off welfare and into work (although the unemployment rate stays stubbornly higher than under Labour), and the crime rate is falling worldwide because of the increasing use of cheaper cameras and alarms.