If National wins ...

[elZorro]

Belgarion - maybe it's the end of the golden weather. Had to happen sometime.

More from the Solid Energy hearings.

http://www.nzherald.co.nz/business/n...ectid=10871232

Callaghan Innovation's CEO has been chosen.

http://www.nzherald.co.nz/business/n...ectid=10871246

The IRD has been clamping down on taxpayers, in a bid to bring more into the coffers. The carpark tax idea is just an example. Next it's employees meals and accommodation when they're paid to be away on jobs. These types of ideas will just slow business down, and without the compliance of admin departments and overworked business owners, are uncollectable anyway.


http://www.stuff.co.nz/business/opin...-park-tax-plan

[POSSUM THE CAT]

Belgarion Choice 2 is correct

[elZorro]

Well there are lots of mixed messages. Manufacturing is not in crisis, well not if you're involved in the building and construction sector anyway.

http://www.stuff.co.nz/dominion-post...-manufacturing

But this is all internal stuff. What about exports? How is National helping there? I'm beginning to think Business NZ is only ever going to toe the National Party line. Are they basically a lobby group for them?

[Major von Tempsky]

Yes I noted that manufacturing report and I meant to post it here but ran out of time - off to a well overdue holiday at Te Anau and the fjords :-)
I meant to quote extensively from it as the statistics directly contradicted what PtC and EZ have been saying here i.e. despite all the left wing puffery manufacturing employment and output are expanding.
So you are now reduced to only talking about manufacturing exports? Ha! ha! ha! ho! ho! ho!
But full marks to EZ for honesty "manufacturing is not in crisis".

[elZorro]

Enjoy your holiday MVT.

I've lost track of the politicians who have stated that we'll never get rich as a country selling houses to each other, although the Aussie banks will enjoy it. We always have a need to send high-profit goods overseas. In the 50's and 60's it was milk products, wool and meat to the UK, mostly. That model has been risky and only moderately profitable for many years now.

We all know some manufacturers who have had a decades-long spell at exporting, but who have succumbed to cheaper overseas products curtailing their local manufacturing. Nationals' policy is to stand by and watch this, basically.

Labour's policy is to re-energise small businesses to have a look at some new areas for manufacture, and to then protect their IP in some niche markets. A much smarter and more useful vision.

Bill English spies an additional 'out' to the budget surplus model.

English sees growing drought debt for economy

18 March 2013
While rain had a welcome impact over the weekend Finance Minister Bill English estimated the drought could cut $2 billion from the national economy, twice the figure estimated a week ago.
Radio New Zealand reported that the extended dry spell has led to the entire North Island being officially declared as affected by drought, forced dairy farmers to dry off herds earlier than usual and cut milk production.
English told Television New Zealand's programme Q+A the drought could knock 30% off NZ's growth rate in a year. The Government will be getting advice from the Treasury in the run up to the Budget on May 16.
English said the latest advice is that somewhere between $1 B and $2 B will be cut from the national income, and as every week goes by, the prospect of it being the higher figure grows.
Radio NZ said last night that rain was spreading in parts of the country after months of drought but is not expected to last more than a couple of days.
Yesterday Northland, Auckland, Waikato, western Taupo and Taranaki had spells of rain, while light showers fell in Wanganui and Manawatu and a smattering in Wairarapa and Wellington.
A rural economist and Federated Farmers say New Zealanders could soon be paying more for milk and other dairy products as a result of drought.
ANZ rural economist Con Williams said milk prices may rise by up to 20% meaning a two-litre container of milk selling for $3 would cost $3.60.
Williams said overseas buyers are speculating New Zealand will have a shortage of milk as a result of the drought and have been prepared to pay a premium for milk powder at the last three dairy auctions.

[POSSUM THE CAT]

Drongo Methinks you live up to your name

[elZorro]

Methinks you should probably shut your mouth for 1.5 years. They have rationale for doing it (they won) and are doing just that. No suprises.

They (National) are doing what? Mostly nothing, apart from trying hard to get some immediate cash into the coffers.

The only smart thing from National I've heard for a while was the idea that farmers could sort out more co-operative storage for water in some areas, which is then drawn down in times of drought. India thought of this centuries ago. And all it does is allow farmers to continue to make low annual profits and tax-free capital gains from vast acreages of our land base, at low employment densities.

National have no mandate, they got in mostly on the basis that only three years in office wasn't seen as a fair go by most voters, and Labour were in disarray at the last election, with not enough clear policy differences.

Four years in, there are now clear comparisons between Labour's and National's results. It's not pretty for National's hopes at the next election.

[Major von Tempsky]

The trouble is that the moronic Luddite Greens are going around stopping the best from winter rain storage schemes (see what happened to the original CPW (Central Plains Water scheme re Canterbury). If the voters, taxpayers and ratepayers would give the Greens the bums rush then drought would be a problem of the past.

Incidentally, all you guys are wasting your time on here.
If you had bought a median property in St Martins, Chch, a year ago, you could sell it now for 124% gain. Beat that!

[POSSUM THE CAT]

Belgarion pity it did not get past as it would have got rid of most of the young nationals

[elZorro]

Colin James's column for the Otago Daily Times for 19 March 2013.

Solid Energy and a public-private muddle


We have an extractive economy which depends on commodity exports. That makes the drought a big deal. It makes Solid Energy a big deal -- made bigger by a public-private muddle.

The drought is big for farmers. It is big for the rest of us because most exports are of what is extracted from grass grown with rain, from forests, from the sea, from underground and from the landscape, exported as pleasure for tourists.

More advanced economies mainly export what they do with what countries like ours extract. The value they add each hour of work is higher than ours so their people are better-off.

John Key and Co want us to extract more, particularly milk and petroleum. One of Amy Adams' departures from the Land and Water Forum consensus is an enthusiasm to dam nice rivers (with public funds) for water for farms.

But in an extractive economy a commodity price fall cuts our material standard of living.

When the coal price plunged last year Australia's media numerously reported coal mines closing and firms in trouble in Queensland. Solid Energy had lots of company.

But because Solid Energy is a public entity, its trouble is political. Government politicians blame Don Elder for runaway ambition. Opposition politicians blame ministers for being poor overseers.

Elder thinks big and wide. He is solid energy, megajoules of it. His ambition to build a mineral resources conglomerate, which ministers batted away, made waves behind the scenes at the time and attested to his restless lateral thinking and entrepreneurial instincts. He is an effervescent, stimulating fellow.

Elder was the man to deliver what state-owned enterprises (SOEs) were told to do when they were corporatised: act commercially, that is, as private-sector firms do. But, unlike a private firm, Solid Energy can raise capital only from the government (that is, taxpayers). When it wanted capital to spread its risk from reliance on a single commodity ministers said no.

Bill English wanted to strip taxpayer capital out of Solid Energy, not put more in -- just as he will strip 49 per cent of taxpayer capital out of Mighty River Power next month. (A referendum will likely later tell him he didn't have a mandate to do that.)

Without more capital, Solid Energy could expand only out of retained earnings (great while the price was high but only while it was high) or joint ventures or with more debt. Even without expansion, ministers drove the board to raise the debt ratio beyond its comfort level so Simon Power could extract higher dividends. That, ministers thought, would drive commercial efficiency and add to revenue to help English's fiscal consolidation.

So, when prudent private-sector firms around the world were deleveraging during and after the global financial crisis (GFC) and now have cash in the bank, Solid Energy had to lift its leverage and so its, and our, risk.

In short, a public entity, an SOE, was expected to act as if it was a private entity, a firm, but had to do so under the thumb of public-sector ministers who made a careful public-sector (fiscal) decision but a dubious private-sector one.

The cabinet is more comfortable when there is a sharp line between the private and public sectors and it favours the private. So it cuts core public sector jobs and constrains SOEs and its half-step to "mixed-ownership" will inject some private-sector oversight. English often says that a real job is created only when a (private) business hires someone. (At the extreme, that logic says a nurse in a private hospital is a wealth-creating job and one in a public hospital is not.)

But actually, no private firm is an island -- it sells to the public, the public regulates it through the government, to which it pays taxes (or should), and it uses public infrastructure, including roads and schools.

And actually, the public sector does create wealth -- education, for example, adds to wealth, intrinsically for the educated, and, by building human capital, to all of us. And as the GFC kings showed, the private sector can destroy wealth and, as a result, jobs.

In fact the cabinet is not as ideological as its rhetoric. There are no plans for more private prisons: their value is as a monitor and comparator for the public operator and as an innovator, not as an automatically better operator. Don't expect large numbers of "partnership" (charter) schools. Key lavished taxpayer money on private rugby and private Sir Peter Jackson. And "mixed-ownership" is, well, mixed.

The private and public spheres are not distinct. They mesh, overlap and often blend. Drought-stricken farmers needing public-sector handouts know that. Private-sector-loving United States lavished public money on big "private" firms during the GFC.

Solid Energy's past and Mighty River's future suggest a need to rethink the public-private relationship -- not just on the cabinet side of politics but on the public-sector-loving Labour-Greens side. So far, neither side has really done that deep rethinking.

-- Colin James, Synapsis Ltd, P O Box 9494, Wellington 6141
Ph (64)-4-384 7030, Mobile (64)-21-438 434, Fax (64)-4-384 9175
Webpage http://www.ColinJames.co.nz

John Key was just on TV3: National's new fallback position on Solid Energy is that after Treasury and National suggested the SOE increase their dividend, and borrow money from the banks for any expansion plans, that the Aussie banks can take some of the loss. After all says John, the banks make a lot of money out of us. Can the SOE be saved at all? John would like to think so. Novopay? Steven Joyce has a big announcement today.

The budget surplus: can we get there in 2015? - a lot of shifting about, they'll try, it's only the difference between two very big numbers (about $70billion). But remember National is the party bringing NZ back into budget surplus, with an $18billion hole caused partly by the earthquakes etc.

Yes John, we remember, Labour had several years on the trot of budget surpluses, and you guys wanted it all returned to taxpayers. Labour used it to pay off debt and employ a lot of people, giving the economy a further hand up at the same time.