Sunday, December 02, 2007

So when will the left get it?

Interesting, yet overall depressing figures just out from Statistics New Zealand (hattip: NZ Herald)
on Average Household income.

I just can't help but focus in on the statement:
Income from self-employment was down 24.5 per cent to $4213, from investments it was up 17.4 per cent to $3057, superannuation and war pensions rose 1.6 per cent to $3970, and government benefits were up 5.7 per cent to $3740

In particular; self-employment down 24.5%, Government Benefits up 5.7%

One would think that the Government and the Labour party would finally be able to see what many keep telling them: they are killing the entrepreneurial and no 8 wire spirit of this country.
By destroying any possible reward for risk taking endeavors they are shepherding more people into "jobs" with existing corporates; rather than supporting those that would actually help to make a difference through creation of wealth - instead of selling time.

I'm sure they will crow about the increases in wages and salaries; but at a fundamental level this will never help us reverse our declining balance of payments, nor declining levels of corporate ownership. Only by supporting risk with real return; and reducing the over subsidization of risk aversion will we make a change for the better.

Otherwise we keep channeling our productive funds to those who, by definition, are most incompetent in their use.

Thursday, November 22, 2007


Today and the EFB...


Wednesday, November 21, 2007

Helen and Jeanette's Crazy EFB

The campaign just released by the IMVDA (Independent Motor Vehicle Dealers Association) on Tuesday stands to be a critical test of both supporters and opponents to the EFB - original and revised.
Because if both sides can peer through their own cognitive dissonance for just a few seconds we will be able to see exactly what a $300,000 campaign launched by a completely independent group to raise public awareness about an issue they feel strongly about looks like.

That's right - a campaign that strongly features leaders from 2 political parties so is in no doubt about it's political message, and that breaches the original EFB by a factor of 5, and is still 3 times larger than what would be allowed next year.

Now my prediction is this campaign - despite being bolstered by actual MSM attention to it - will still go mainly unnoticed by large swathes of the population, and won't be particularly intrusive.
And certainly will fall far short of "buying votes" of large sections of the community.
Which if the supporters of the EFB actually have any independent reasoning left is the point.

This campaign if performed in 1 1/2 months time would be illegal. The Labour Party and the inept supporters of this bill somehow think that the IMVDA by explaining their point of view on proposed law that intimately affects them is a threat to our democratic system.

Sorry - the only threat is by stopping them. I don't agree with their conclusions that they are promoting with this campaign, but to steal the words of others more esteemed; by God I'll defend their right to tell people about it.
Regardless of election year.

Monday, November 12, 2007

Thumbs up Herald, and yet the cynic in me...

Great to see at least one member of the MSM finally pick up the EFB (Electoral Finance Bill) and give it the coverage that it deserves: Democracy Under Attack
And as expected David Farrar has also kicked off the initial "discussions" in the politically aware blogosphere

And yet the cynic in me can't help but focus in on the phrase (in the Herald editorial / front page):
They say this because it would be illegal in election year for any organisation other than a registered political party to spend more than $60,000 (perhaps a couple of full-page advertisements) to publicise a cause that might be deemed political.

and wonder if this is the only reason why they have finally reacted to this outrage.
Did someone at the Herald finally realise what a threat this was to their advertising budgets in the 12 months before the election? Especially given Labour's predilection for multi-million dollar TV campaigns over newspapers (probably something to do with the literacy of their typical voter...)?

And in fact isn't that what they should really be pointing out here as well - that the Labour party and Government departments will still be able to do a repeat of their $15 million dollar Working For Families (WFF) TV advertising before the election (You're better off with Labour [sic]), while opponents and critics wouldn't be able to afford a single timeslot?

But regardless of the reasons for the Granny to finally wake up, thank God they have and the sheeple of New Zealand may finally recognise the threat that is upon them

Tuesday, July 24, 2007

A thought which resonates

The best of a book is not the thought which it contains,but the thought which it suggests; just as the charm of music dwells not in the tones but in the echoes of our hearts. --Oliver Wendell Holmes

For me this suggests a "Song of Stone" by Ian Banks - a story which I could not unconditionally recommend; but would recommend to all that would know.

Sunday, July 15, 2007

Reserve Bank announces changes to FX management

An interesting change announced by the Reserve Bank - in particular the obvious reference to "responding to crisis situations involving sharp falls in the NZ dollar."
One wonders whether this is mainly an announcement for effect, a real repositioning to give themselves more flexibility in the types of moves they have already tried, or an independent repositioning of their strategies.

Certainly it is obvious that the Bank has now realised that it will not be getting any help from the Government in terms of Labour curbing its inflationary policies - and that the Reserve Bank has realised that to continue hiking interest rates to counter this will irrevocably damage the export sector.

The Reserve Bank today announced changes to its financing and management

of New Zealand's foreign currency reserves.

The moves arise from a review of the Bank's balance sheet, announced in
its Statement of Intent in June 2006. The review was aimed at enabling
the Bank to manage its balance sheet to best meet monetary policy,
currency, liquidity management and foreign reserves requirements.

Reserve Bank Governor Alan Bollard said that for the last 20 years, the
Bank's foreign currency assets have been fully matched by foreign
currency liabilities.

"That was an unusual approach by international standards and we are now
moving in the direction of a more conventional approach," Dr Bollard

In the future we will hold some portion of our foreign reserves on an
unhedged basis - an "open FX" position. This means that part of the
foreign reserves portfolio will be funded in New Zealand dollars rather
than in foreign currencies."

Dr Bollard said that the main reason for this new approach to foreign
exchange (FX) management is to give the Bank a more effective means of
responding to crisis situations involving sharp falls in the NZ dollar.

"In crisis situations it is of paramount importance that the Bank
retains access to foreign currency reserves. With a portion of our
reserves no longer borrowed from abroad, but funded internally, we will
become less dependent on international capital markets in times of

"Also, the use of unhedged reserves in this situation will be less
costly and give rise to less additional risk than would be the case
using hedged reserves. Unhedged foreign reserves provide a more
effective form of insurance against a currency crisis."

The Bank's guidelines for operating in the foreign exchange market have
also been modified. Overt intervention intended to affect the exchange
rate directly may still occur. In addition, the Bank will be able to
more gradually accumulate or reduce its foreign exchange position when
the exchange rate is at extreme levels and unjustified by medium-term
economic fundamentals.

Dr Bollard said that the Bank's more passive FX transactions will not
necessarily be expected to directly affect the exchange rate.

"However, such transactions will allow the Bank to give concrete signals
regarding the extent to which the exchange rate is seen as over- or
under-valued. That may indirectly affect the exchange rate by
discouraging speculators from pushing the currency to extreme levels."

Because the interest rates on the Bank's New Zealand dollar borrowings
are higher than on foreign currency borrowing, the annual cost of
holding foreign reserves is expected to increase somewhat with the
change in approach.

The increased open FX position on the Bank's balance sheet is also
expected to result in greater variability in the Bank's net income, as a
result of foreign exchange gains and losses. However, the Bank's foreign
exchange positions could be expected to be profitable on average over
the medium term.

The Bank has been using and will continue to use its FX market
operations to lift the level of its unhedged reserves towards a new
long-run average level. The Bank publishes its open foreign exchange
position monthly on its website, with a lag of one month.

Background documents on this new policy are available on the Reserve
Bank and New Zealand Treasury's websites.

Monday, June 11, 2007

I cannot say how much dread and foreboding this incites

For your information the Reserve Bank released this news release a short
time ago

News release

11 June 2007, 3.45pm

Reserve Bank confirms forex intervention

The Reserve Bank confirmed it has intervened today in the foreign
exchange market to sell New Zealand dollars.

Reserve Bank Governor Alan Bollard said: "As stated in our June
Monetary Policy Statement, we regard current levels of the exchange rate
as exceptional and unjustified in terms of the economic fundamentals.

"This action does not prejudge the future direction of monetary policy,
which as always will remain dependent on emerging economic trends.

"The action is consistent with clause 4(b) of the Policy Targets
Agreement, which requires monetary policy to avoid unnecessary
instability in the exchange rate."

For further information contact:
Mike Hannah
Head of Communications
Ph 04 4713671, 021 497418,

Budget and Economy conference

Had a fascinating evening at the FINSIA Government Speaks event on Wednesday with Tony Alexander, Bill English and Phil Goff giving their views on the budget and economy; enlivened via the expert MC in Barry Soper.

Of course it probably would have been even better had Trevor Mallard turned up as scheduled rather than scarpering at the last moment to Valencia as he realised that otherwise he was going to miss his photo shoot opportunity with Team NZ winning.Typical of politicians in general, but the current administration in particular; sod any other commitments if there is a good looking photo on offer...

Bill English, despite looking like he'd just stepped off a flight back from Europe with too much 1st class alcohol, gave a pretty god account;but the real star speech of the night certainly went to Tony Alexander. With Billy Bowden (of old) exuberance he gave some interesting and challenging views on the economy, direction and views on what the Reserve Bank has and should be doing around inflation.It's just a shame that he needed to heavily contradict himself under questioning around the points of consumer import spending being a one off catchup under the high dollar (his view); as this significantly weakened his arguments that otherwise would have had a greater impact on my viewpoints.

Overall though a spectacular event; and looking forward to the next!

Friday, June 01, 2007

KiwiBank - the real one

Hattip: Stuff

TSB Bank has yet again shown what an incredible waste of taxpayers money the white elephant of KiwiBank truely is.
It "has posted a $34.8 million after-tax profit for the year to March, 11.3 per cent ahead of last year and its 20th successive record profit."
While still retaining "the lowest two-year fixed interest rate on the market for the past seven months."
In terms of risk and return:
TSB's capital adequacy ratio of 16.08 per cent was the highest of any bank in the country and more than double the international standard of 8 per cent.
Return on average assets of 1.28 per cent compared with the benchmark of 1 per cent.

And that is right, while returning a return to the community - not continuing to bleed the poor NZ public for more and more capital injections. Go to Taranaki at some point and see the levels of public infrastructure funded by the TSB and you'll get the idea. The TSB does more for Taranaki than the local body council (although that's hardly surprising - they are too busy building themselves new offices and water features).

But of course without KiwiBank we wouldn't have a(nother) monument to the stupidity of Jim Anderton and the failure of left wing dogma.

Wednesday, May 30, 2007

Regional Road Taxes

Hattip: NZ Herald

Oddly enough I'm actually not against the new regional road taxes -
they do introduce some oddities into the market equilibrium due to the arbitrary boundaries involved but overall they do help to move more towards a user pays environment.

Which is where my real objections lie - the remaining general fuel taxes. Because if each region actually was retaining the fuel tax paid within its boundaries Auckland would now be able to introduce a subsidy - not the 10c tax hike.
The inefficiency is shown through the need to place a regional fuel tax on the motorists of the region which already subside most of the reat of New Zealand.

Which is endemic to the issue of the Labour party and its governing style; the inefficiencies created through the income allocation and redistribution performed keep needing more and more to occur to iron out the imbalances created.
There is a shortfall in spending on Auckland roading infrastructure because the Labour party has decreed that there should be, not because the consumers in that area aren't already paying for it.
I think the regional tax is a great idea - but the existing slush fund of fuel taxes should be scrapped first...

Monday, May 21, 2007

TaxBlog prediction was right - a Year in advance!

Thanks to taxblog post:

That annoucement caused the Labour government some seriously negative press… And prompted calls to reduce the company tax rate to 30%. Interesting that Cullen is still thinking about such a move, at the expense of introducing a payroll tax.
So whatever happened to the payroll tax?
Probably someone in treasury is crunching the numbers working out the revenue implications of trading a 3% drop in corporate income tax for the introduction of a payroll tax

I'm almost worried to find out what he might predict for next years budget...

Friday, May 18, 2007

KiwiBank Home Loan Sale

Anyone else fascinated by the KiwiBank home loan sale on at the moment?
In that the only bank currently discounting rates in the face of the rhetoric of the housing market causing inflation seems to be the Government owned bank?

So the questions would have to be -
Has KiwiBank been given the OK because the Government really does acknowledge that it is their spending that is inflationary, not just the housing market?
Is KiwiBank the only bank that can sustain these squeezed margins, because at it's heart the money returned to the Reserve Bank via the OCR still has the same shareholder...
Does KiwiBank know something about the future direction of NZ's monetary policy that the other banks don't?

Wednesday, May 09, 2007

Subway Storm

OK - there really is little point in arguing about this guys until the point around whether there was two or one cup of drink involved is settled.In one case we have clear intent, the other really is just bad judgement. In the former case, yes, the employer was justified - if somewhat harsh in their treatment of the employee;in the latter case the employee is probably justified in their PG.

But taking the hypothetical of the first case is the PG of the employee still justified - because this really is part of the issue with NZ Labour laws at the moment and why they remain a huge impediment to the growth of NZ companies.

To move to a different scenario (so that I actually know the true circumstances):

We had an (ex)collegue that was so disruptive they had managed to get 3 people to resign in a company of 20.However they were so litigous and CYA oriented that the process of letting them go was drawn out over 6 months.And to prove how unstable they were during the final meeting the employee ended up threatening one of my other colleagues with a stack of glass coasters,and (at least partially) due to the unsettling effects of being stood over by someone yelling at them with a potentially quite harmful object drawn back they stuffed up some of the finer procedural points of that meeting.So to cut what could (and will be if anyone wants more details) be a long story a bit shorter; this person ended up getting paid out around 2 months salary and given a positive reference to their next employer (victim) because their "rights" had been infringed.Never even mind the rights of their collegues to a functional workplace. Because while people bang on about workers rights and rights of criminals etc they often seem to forget that there may be other people having their rights trodden on in the process...

Go Warriors!

Or at least give us something other than that abysmal performance on Saturday!At least the judiciary agreed with us (the crowd) at the appaling standard of the reffing:to only have 2 of the 5 Warriors put on report actually charged shows what the standard of the original decisions were...

Although to be fair it really didn't have that much effect on a team that was determined to lose.

More interesting though is whether the Warriors are truely a side with a culture that corrupts its players?I notice with interest that Tony Martin this week had a "discount" on his charge due to it being his first in 7 years - Wade McKinnon similarly suddenly cops a grade 3 contrary conduct charge last week after 7 years free of charge - while Steven Price also in his first year copped his first judiciary charges of his (not insubstantial) career.So one really has to question the causality in this relationship - does the Warriors outfit really make players more likely to offend; or more likely to get charged?

Friday, March 02, 2007

Housing Affordability

Thanks to the NZ Herald I discover today that Parliament's commerce select committee has decided to hold an inquiry into housing affordability.

Now of course I hope that something good and practical actually comes out of this; like the removal of special treatment for the family home, recognition that the high interest policy leads to higher - not lower - housing costs especially for those in low income brackets etc. But somehow I doubt it.

And more importantly I doubt they will have the wherewithal to try and tackle the main issue with housing prices - people buying things they can't afford. Lets face it the main factor driving up the housing prices in New Zealand today is stupidity. And the complete lack of any willingness to compromise.

We conntinue to read about the lack of affordable housing in Auckland - which is just complete and utter tripe. It is still completely possible to buy a 3 bedroom house for $278,000 in Auckland within walking distance of the largest mall in NZ, the train station, 2 main bus trunk routes, on 700 square meters of land. Or at least I can guarantee that as of last September anyway...

What is the real issue; oh it's not in Remuera et al. And so it's outside where people are willing to look. And so the 'desirable' suburbs are so overpriced as to push the median house price to over $450,000. Note the difference?

Oh of course school zoning doesn't help this - but that really is the exact same issue, as both DPF and Cactus Kate have so eloquently blogged on before; it is the lack of willingness to actually look at both what you can afford - and more importantly what you actually need.

Do beneficiaries need to live in $1.5 million dollar houses in Orakei - by definition proximity to the city to reduce commute times isn't exactly a priority...

Monday, January 29, 2007

Caring and Charity - Socialist Style

First apologies for the recent stasis of my blog :-{
Changing jobs, renovations and increasing despair at the state of New Zealand and it's politics created a mix of apathy and timelessness that has conspired against contributing back to the community. I've still been active listening to the voices though.

As such as I was referred to this from dpf I couldn't help but shake myself out of my reverie at least briefly - mostly because it reinforces what Cactus Kate blogged about recently and the socialist left supporters still couldn't understand - that the Socialist parties are not charitable and do not understand the concept.

John Key's offer was charitable - he offered something of his to Made from New Zealand.
In typical fashion, Mallards response is not charity - he offered something of mine to Made from New Zealand (alright - not just mine - something from everyone but him!)

Do you start to get it now? The right / libertarian wings tend to understand and grasp the concept of charity. They like having the money they earn so they can do charitable things with it.
The left do not understand and like to have everyone else's money so they can spend on what they want - preferably so they can take more of what is someone else's. And pretend to hold the moral high ground while doing so.