Saturday, March 04, 2006

Go Windies!

Well at least put up a good fight ;-)
Off to the cricket today after soccer (yeah I know - I watch NRL, but my sport of participation is soccer...) so hoping for a win but maybe a bit closer than the other 4 games.

Guess that is still the big difference between us and Aussie when it comes to spectator sports:
we like to watch a good contest
they like to win.

Friday, March 03, 2006

Reponse to Jim Anderton

Unfortunatly the NZ Herald does not publish its letters to the editor online so I can not link to Jim's letter today - however I post my submitted response below:

Jim - In exactly the same way that the Government had to pump $840 million into the BNZ for capital adequecy requirements in the 90's (to stop bankruptcy), so the giving of money to Kiwibank for capital adequecy is giving it money.

That there is a possibility of future earnings being able to pay it back is irrelevant to the fact it is a current capital injection.

That you continue to deny the existence of the TSB as a wholly NZ owned bank that did everything the Kiwibank does (including post shop banking) without needing millions of tax payers money is phenominal. However perhaps it is because you realise what a waste of our money it has been to setup a new establishment to do exactly what the market had already done - with the exception of providing a party policy vehicle?

Maybe Cullen is right - the surplus IS illusionary

Its not like Labour havent lied about the state of the accounts before...
(and the current administrations disdain for fraud and electoral law hardly give weight that the Public Finance Act would stop them lying again!)


"What I was told in the next few minutes stunned me.

The Bank of New Zealand (BNZ), our oldest financial institution, majority owned by the New Zealand Government and then the dominant bank, was technically bankrupt.

And the strong advice was that the incoming Government must take steps to save it.

The BNZ was about to go belly-up something that the Labour Government had known for many weeks - right through the 1990 campaign - and had hidden the information from the public.

It was worse, much worse than that, because Labour, in the lead up to the 1990 election, had claimed up to the last day that the Government accounts were in surplus.

The truth was starkly different.

Not only did the BNZ require a rescue package of some hundreds of millions of dollars, but the true state of the accounts was that the Government had a massive deficit of billions of dollars, with worse to come if policies were not changed.

When we opened the books after the 1990 election the Treasury's forecasts were a $3.7 billion deficit in 1991/92, growing to a $5.2 billion deficit in 1993/94"

Thursday, March 02, 2006

Why the NZ Government should not own a bank

In contrast, the problems of the BNZ were dealt with differently. Firstly in 1989, the bank required a capital injection its capital adequacy had fallen to 2.4% as a result of the previous year’s $648.8 million loss (Reuters Staff, 1989). The government were forced to temporarily advance an additional $200 million of preference shares to lift while the bank awaited the proceeds of a rights issue.

Again in 1990 problems arose - t
he day after the election the new government was told by the RBNZ and Treasury that the BNZ was technically bankrupt (Bolger J B, 1996). The government, who still owned a majority position in the BNZ, was forced to inject an additional $640 million of capital into the bank in order to keep it as a going concern.

Contrast this to the Governments position that the banks are gouging us and the only way to combat this is for them to provide the competition. Last time they managed to bankrupt their competitive vehicle. This time they are just cross subsidising with NZ post and $15 mil a year captial injections. No similarities?

Am I a Libertarian?

OK - this has made me change my view of being a Libertarian - I'm an Ignorantselfishertarian now too!


Is any Labour minister competent to confirm or deny anything?

Finance Minister Michael Cullen yesterday refused to confirm the proposal was among options being looked at in a sweeping review of the business tax regime.


Wednesday, March 01, 2006

Lotus Notes rocks when things go wrong!

OK - had a user completely corrupt their server mail file while changing the template to a new one :-(

Total downtime - less than 5 minutes! just copy the replicated mail file from their machine (which takes 3 minutes due the 2.5GB mail file...) and we're away again.

Happy admin :-)

How Taxes Work . . .

This is a VERY simple way to understand tax. Read on -- it does make you think!!
[Ed - Thanks for the unknown author who wrote this essential reading for all those all clamour about the "greedy rich"]

Let's put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for dinner. The bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men — the poorest — would pay nothing; the fifth would pay $1, the sixth would pay $3, the seventh $7, the eighth $12, the ninth $18, and the tenth man — the richest — would pay $59.

That's what they decided to do. The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement — until one day, the owner threw them a curve (in tax language a tax cut).

"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20." So now dinner for the ten only cost $80.00.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still eat for free. But what about the other six — the paying customers? How could they divvy up the $20 windfall so that everyone would get his "fair share?"

The six men realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, Then the fifth man and the sixth man would end up being PAID to eat their meal. So the restaurant owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so the fifth man paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a bill of $52 instead of his earlier $59. Each of the six was better off than before. And the first four continued to eat for free.

But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20," declared the sixth man who pointed to the tenth. "But he got $7!"

"Yeah, that's right," exclaimed the fifth man, "I only saved a dollar, too . . . It's unfair that he got seven times more than me!".

"That's true!" shouted the seventh man, "why should he get $7 back when I got only $2? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison, "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up. The next night he didn't show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered, a little late what was very important. They were FIFTY-TWO DOLLARS short of paying the bill! Imagine that!

A history teacher that cant remember the facts:

Cant help but publish these as they come:

Deputy Prime Minister Michael Cullen's approach to saving the minister was, saying that there was confusion with the chairman of the school board having previously said there had been no formal complaint. [sic]

Dr Cullen appears to have suffered a memory lapse, and forgotten that Mr Benson-Pope's denial did not carry any qualification, and that it was he who gave it, not the board.

Okay - showing my liberal tendancies early, I need to rant about the KiwiSaver scheme and the details announced yesterday.

Let me start by saying in general I actually support the idea - we are a nation of pathetic savers and need a kick up the arse to change that but:

We are also a nation that over-invests in property
We are a nation experiencing inflationary concerns and consequently an over valued dollar due mainly to inflation / growth in property prices.

So our history teachers answer? A subsidy on the purchase of a house.
Anyone who has studied any economics (obviously not our esteemed doctor of history) knows a subsidy is going to be split between the seller and buyer - given the elasticity of prices in housing - he's probably just contributed $4000 - $8000 of inflation to a certain price band of houses (see 2 big problems above)...

He then also tries to justify the $100K income limit (remembering this is 1st house only anyway people) by saying they "are not going to help people buy their home on Paratai drive".
I agree - the 50 state homes there are for that purpose :o
Please tell me again as I struggle to pay off my mortgage why I must continue to help others pay off theirs first?
Despite my assurances to myself that I would never enter the self-idolising world of blog publishing here I am....

Even worse I can feel that this is likely just to be an area for venting my spleen primarily on political matters (allwe need another political blog), although I shall also attempt as much as possible to keep this a stream of consciousness; which basically means topics are likely to be politics, rugby league, soccer and information technology.

Welcome and good luck