Treasury forecasts
The various election debates have been splendid to date contrary to some opinions. The finance debates have been very good. Who would have thought 10 years ago that Jim Anderton would be standing there as total Labour stooge selling lower corporate tax rates!? - saying (as he did the other day) that he doesn't care if that encourages foreign owners to repatriate more profits because we have to do something "symbolic" for business?! Of course the old fuckwit can sit around the cabinet table playing with his mechano set while Michael Cullen puts 92% of the vast Super Fund into off-shore investments and then go on TV, without blinking, and say we don't have enough infrastructure or business investment and should encourage more from off-shore. Fuck wit. The National Bank Money For Jam Oh God This Is The Most Sure Fire Safest Investment Ever comes up for sale and Anderton does absolutely nothing. As someone could have said "There's a licence to print money, Jim - We could buy it with the Super Fund, keep half as a passive investment and sell the rest to Mom and Pop Kiwi investors and reduce the current account deficit and cream it - what was that, Jim, don't interupt me when I'm writing my "underinvestment in the economy - govt. should act" speech. Right. Ok, Jim, - oh, and Jim the cleaning lady says all the mechano nuts and bolts in the carpet are damaging the vacuum cleaner."
Good to hear Winston Peters making some sense (in a scare-mongering framework, naturally) about underinvestment and export plans. He took almost sole credit for handling the '97 Financial Asian Crisis as Treasurer and not crashing the economy. Not so good to hear that our massive, ever-ballooning current-account deficit is not a priority for anyone (except maybe Peters) and that they still haven't seen the big picture regarding the Super Fund's off-shore billions being used as asset ballast to keep our dollar high while we mortgage our property to Aussie banks and use immigration as a tool to keep those assets high. Gareth Morgan and his continuing, lisping, handle-bar moustached, prophesies of real estate doom seem more reasonable by the day.
Good to see Rod Donald getting along so well with Cullen considering he wants a seat at the grown ups table. Cullen allocates $10-20m annually for each coalition or supporter to do with as they like on their pet projects. And the cheap whores whore their whoring whore votes for that whoringly whorefully risible amount like the filthy whores of whoredom they are. For Anderton it is a crony-capitalist lolly scramble "regional development" circus. For the Greens it was the energy efficiency conservation authority thingy quango thingy that puts stickers on appliances to say whether it lives up to Jeanette's puritan standards. For the Family Common Sense Christian Worm party it was a flakey Families Commission. And now Donald has said (and Cullen has agreed) to a "Buy NZ made" campaign - which will use up their $10-20m if they get in. Peters will get a $10-20m Export Assistance Planning Authority thingy if they want NZFirst help. Pita Sharples is right now working out how many Kapa Haka shows he can put on for $10-20m.
John Key tries. He seems really nice. Skillfully tucking into that $40k+ ambitious singles and small family demographic to undercut Labour. Pensioners might get a lift too. That's good. If only Key could do the selling and not dozey old Don.
Rodney Hide deserves to get back in and those traitors who wanted Franks as leader should worship the ground Hide walks on. He was great on the economy debate on the wireless the other day, and on Kim Hill the other night. Can't understand the Amerika-worshipping/nuke-loving myself, but no one's perfect. If National look likely to lose with a fortnight to go expect to see those ex-Act Nat supporters thinking: Do I want to see a lefty govt. with just National in opposition and no Act and maybe no Act ever because of the blood-letting that would occur afterwards and the logistical nightmare of rebuilding with no parliamentary money. If that happens they will swing back as they have done at each election so far. The ideal would be Rodney winning Epsom and not reaching 5% but bringing in everyone short of Franks (who can then promptly fuck off and join the Nats like he habitually says he wants to).
It may come down to simple messages:
Cullen is a Treasurer presiding over a good economy who will stop interest on Student Loans and help families.
Key is a wannabe with no track record with a complex Student Loans plan and will help middle-high income earners.
Why should we change horses now?
posted by Bomber @ 1:04 am
9 comments
9 Comments:
well may you ask. 'If it ain't broke, don't fix it' springs to mind. The red & blue lolly scrambles aren't too far away from each other, so i think it'll come down to two broader ideological positions of a)more, and b)less, state interference in your life. However, remembering '75 in particular (but vaguely i might add as i was at primary school)we all voted for Muldoon's big lollypop of National Super For All, so wallet won over heart. Just on that topic, i like the notion of personal account allocation for the NZ Super Fund-that would make it a real taxpayer-funded super scheme rather than a war chest of cash to be potentially abused (the present structure is really another "Welfare Solution").I do tire of the bitching about this fund being invested overseas; just under 15% of it isn't by the way, and some would argue that's too much. NZ represents .02% of the world economy. To carry out the obvious mandate of stable returns it needs to diversify globally as it has. Imagine what would happen to it's value with one foot and mouth scare here (let alone an actual outbreak)if it was all invested in NZ. Or an earthquake happened in Wellington (...or could that avoid the tag 'disaster'?). Speaking of which, at one time the EQC insanely had all it's reserve fund in NZ dollar investments-much like buying car insurance in case your house burns down- but at least we were buying NZ Made!.
RR:
I agree with the individualisation of any state super fund. I notice Rodney Hide is also bitching about it being invested overseas.
You are seeing things in risk/prudential terms exclusively, rather than as a state's fiscal tool. But even so, local investments that are monopolistic or captive in some way represent low risks, esp. when they are controlled/regulated by the state - which would not act to impair their performance (I know... Commerce Commission/judicial intervention level playing field etc. - what I mean is their exists a great deal of certainty when you make the rules).
I don't advocate an "active" stake or appointing cronies or carrying out govt. agenda that are not in the commercial interests of the company etc. but a large minority/small majority holding at an arms-length scenario - independent directors etc. Prime targets would be: Safe bets like a bank (in a local cartel that is controlled by the RBNZ seems pretty safe to me - National Bank would have been perfect), tolled highways, ports, Sky TV, Fairfax, APN, Telecom, Sky City, NZ Refining etc. These cash cows are inherently connected physically to NZ and it's jurisdiction. Because of the strategic media concerns a double arms length scenario would be necessary with a very strong mandate for commercial-only actions and completely independent directors. But that should apply to all these operations.
There have been problems in the recent past with 100% "nationalised" co's like NZ Post and Aiviation Corp thinking they can spend large on off-shore whimsy. I don't think those forays would get passed if half the board were non-Govt.
I would be interested in hearing from anyone with knowledge of how Singapore manages these things. They seem to be fairly successful up to this point. And when they reach max. saturation at home they start really coining it with overseas expansion or exports.
"we all voted for Muldoon's big lollypop."
No. See here - http://www.elections.org.nz/elections/FPP_seats_won.html - the Nats got 47% of the vote, the rest going to Labour and Social Credit. However, they got 55 seats to Labour's 32. The unfairness of the rural gerrymander in elections like that is what got us MMP.
And by way of comparison, no doubt we will have an absolute majority vote for lollipops this election, because Labour and National are both offering enormous ones. It comes down to what coloured lollipop you'd like.
No sooner have I commented than this news arrives in the in-box c/o The Independent:
Trade deficit widens
Total exports of merchandise goods last month are provisionally valued at $2,431 million, down $35 million (1.4%) from the same month last year, while the value of total imports was $2,431 million, an increase of $198 million (6.9%). This resulted in a monthly trade deficit of $617 million, up from $384 million in July last year. A deficit is normal for a July month, but this is the largest July deficit on record. Exports to the United States, Japan and China all decreased.
and
Refiner swells profits
NZ Refining has announced an after-tax half-year profit of $61.846 million, almost double the $34.323 million in the comparable period last year, which was impacted by the costs and reduced production caused by a planned major maintenance shutdown. In the six months to 30 June, the refinery processed 19.1 million barrels of crude oil, achieving a strong refining margin of $US7.76/ barrel. Production was close to physical capacity.
Rope, old, money, for etc.
oil price directly impacting trade deficit?
Oil costs up 51% according to this article in the Herald! Trade deficit at $5.4b and current a/c deficit at 7% of GDP ($10b) and getting worse. Worse still is what we're spending all that fucking money on: expensive oil and consumer goods. Not capital assets and productive machinery etc. but bloody plasma screen TVs!
Will tax cuts to the top half be inflationary? Well if current spending habits are correct - yes. Or they will plough it straight into buying bloody property, ie "speculation" rather than "investment" as such. Waddyado?
tax cuts to the bottom half definately inflationary ("I'm getting $10 extra a week now, i'll get Sky!") top half will save, generally speaking. Any cash assistance to first home buyers will fuel the property market, through perversly (from the POV of the architect of such a plan)increasing the average purchase price. Unfortunatley this is the same market segment attractive to investors, result, new bubble. I don't see the average punter spending their tax cut on Auckland Airport shares.. it'll be consumption for sure. Only upside from an inflationary perspective is increase in GST takings.
Internal discord is a big turn-off. As for Judd, she was a Wellington insider and a controversial choice from memory. Hide should have taken Epsom last time however when the Member for the Northern Club first contested it - that was his best chance... 3 weeks left.
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