MEL - Meridian Energy

[CJ]

Why do people who stag have to pay extra tax? NZ doesn't have a capital gain tax?

there are other dedicated threads on this so have a look for more detail.

If you buy with the intention to profit from selling, then it is deemed to be income, not a capital gain.

[MAC]

Demand for power even without Tiwai must be on a strong growth curve with all the new power conections required for irrigated dairy farm conversions alone. No dought the new City of Christchurch will need a bit as well .

Electricity demand in NZ is forecast to grow at around 1.2% per annum over the foreseeable future, so any meaningful growth for Meridian in terms of capacity would need to come from offshore investments eg: that wee hydro they are looking at in Queensland. Meridian have a combined hydro and wind portfolio of 2,744MW, so to grow at a humble rate of let’s say 10%, they would have to build 274MW per annum. Hmmm, entirely unlikely ?

Consider also that since 2007 there has been an enormous amount of power station construction in NZ and the market has switched from being slightly constrained to being slightly over supplied. This is one of the reasons CEN has been trading in such a tight range over the last 4-5 years.

Meridian should be a fantastic dividend stock though for those who pick up the IPO incentives, well better than mum and dad leaving their hard earned cash in the bank.

I’m still trying to reconcile if the IPO incentives are worth more than just waiting for a better entry point during dryer event times, the hydrology is about average at present. Need to do some more work on this.

Electricity Demand.jpg

[ratkin]

UK labour party talking about a freeze on utility bills if they come into power.

Expect NZ labour party to follow

[percy]

Maybe some one in NZ Labour party will have read Muldoon's book and realise that price freezes do not work.

[gv1]

Why do people who stag have to pay extra tax? NZ doesn't have a capital gain tax?

NZ doesn't have have CGT, but some doesn't understand that if you are in a taxable activity, intentions of engaging in business for gain/loss. Every dollar earned is taxable.
Thats why I am confused when people say that those who buy and sell houses doesn't pay tax. They'll have to pay income tax on gains made, as this becomes taxable activity under Income tax act.

[fungus pudding]

Housing is no different, if you buy and sell house's for a profit and dont pay tax and the IRD get wind of it look out.
I know of a family that has done it for years and they just keep buying propreties in different names.
Make's me a bit grumpy cause if you make money you should pay tax thats how the system works.

No matter what system, there's always a way around taxes. The only way to make a cgt work is to not allow exceptions, e.g. the family home.

[MAC]

Maybe some one in NZ Labour party will have read Muldoon's book and realise that price freezes do not work.

If you may think we have government intervention here, take a look at how totally crazy Queensland is, Labour put a freeze on power prices, and guess what, power companies stopped building, why would they with that sort of risk, and now the Govt is increasing power prices by 22.6%, gee what a surprise ?

http://www.brisbanetimes.com.au/quee...531-2ng00.html

[percy]

MAC.
Thank you for the link.
No surprises there.! lol.

[hammer&nail]

Asides from the fact that P/E ratios for NZ electrical utilities are completely meaningless.

[JAYAY]

Yes, I heard of a builder who successively built houses, lived in them while he built the next one and sold the ones he moved out of as if they werwe private property. IRD are not stupid, they caught up with him and he went for a skate big time. If you know someone who is making big bucks ripping of the tax system then understand that we are all paying for it. You can always write a anonymous letter to IRD. They are obliged to follow up on all anon info.