Nz Politix

[peasea]

yup, too much time on me hands

I am glad I never really got the plot in the first place ! ( doesnt look to flash from here !)

Stephen

I must admit, I'm nowhere near as busy as I used to be; awfully glad I bought a couple of machines when I had the cash. Now I have the time to enjoy them (when the weather plays the game) without having to worry about paying for them on HP or something equally daft.

Can't complain about life too much.

[Brian d marge]

I must admit, I'm nowhere near as busy as I used to be; awfully glad I bought a couple of machines when I had the cash. Now I have the time to enjoy them (when the weather plays the game) without having to worry about paying for them on HP or something equally daft.

Can't complain about life too much.

+1 on that

Thats why this idea of a house in NZ tickles my fancy , Why cant we be happy in the doo doo we are in ,,,

The weather here is like an oven , so No garage for me until November, so this is my planning / drawing time .... hence way too much time on hands

I started to draw a enfield chopper ,,, we will see how that works !

Stephen

[davereid]

New Zealand was just a cold windy island populated by stone age cannibals until foreign investment arrived.

English pounds purchased land, turned it into farms, built roads, power stations and Labours precious train set.

There are three ways to build something, particularly an infrastructual something..

1) Use your own money
2) Borrow the money
3) Find an investor

If the government has the money for option 1, it has been overtaxing for years, taking money out of the pockets of the real people and businesses that create wealth.

If government borrows money, its going to have to start taxing at rate (1) above. Plus, a crappy politician decides how and where the money will be invested, and we end up with another stadium or train set. And of course, the interest goes overseas, regardless of the viability of the venture. So you end up paying for the project, sending the interest overseas, and perpetually bailing out a dodgy venture.

Or 3, you let an investor build it. If it fails, he goes home with his tail between his legs. He will have hired kiwis to build, and spent oodles here already, all win win for us. If he has invested wisely, he will survive. Still employing kiwis, contributing to our economy, and paying taxes.

We are still in control, able to pass laws that shape and control the investors market position. At least we would be if we had anyone with 1/2 a brain in the commerce commission.

Sure, he takes his profits home, but, if those profits are magical, another investor will arrive to compete. Unless Labour bans them.

[MisterD]

It's what we f-ing need, proper sensible rules and policy around foreign invenstment rather than the political meddling and flip-flopping from C&C...chinese buy the Wellington power lines? Good. Canadians buy a chunk of reclaimed swap in Mangere that happens to have a runway on it? Bad. Whatfuckingever.

[Winston001]

There are three ways to build something, particularly an infrastructual something..

1) Use your own money
2) Borrow the money
3) Find an investor

If the government has the money for option 1, it has been overtaxing for years, taking money out of the pockets of the real people and businesses that create wealth.

Just for argument - not if you are the government of Alaska, Dubai, Bahrain, Venuzela etc. There are countries which are wealthy in natural resources and don't need to tax citizens.

Or 3, you let an investor build it. If it fails, he goes home with his tail between his legs. He will have hired kiwis to build, and spent oodles here already, all win win for us. If he has invested wisely, he will survive. Still employing kiwis, contributing to our economy, and paying taxes.

We are still in control, able to pass laws that shape and control the investors market position. At least we would be if we had anyone with 1/2 a brain in the commerce commission.

Sure, he takes his profits home, but, if those profits are magical, another investor will arrive to compete. Unless Labour bans them.

One example - NZ Rail. Berkshire Hathaway Partners (Warren Buffet's vehicle) and Faye Richwhite bought this from the government and then drained it. When NZ Rail was bust, the govt gulped, guaranteed various funds, bought back the Auckland network, and let another rail co buy it. Which also eventually failed.......so we bought the whole lot back for $700million.

The Overseas Investment Commission (not the Commerce Commission) is a gatekeeper, not a day to day inspector. Don't blame them for normal business decisions to yield maximum profit.

[Usarka]

Don't think to many people are aware of the ramifications. If not just think of how much the Aussie banks have ripped us off. Even Key is on record suggesting that their profit margin is too high. And remember how much forighn corperations allowed rail to backslide

I assume you're with kiwibank then?

Funnily enough most people I speak to who complain about profits going offshore are happy to bank with offshore banks...

[Brian d marge]

I assume you're with kiwibank then?

Funnily enough most people I speak to who complain about profits going offshore are happy to bank with offshore banks...

Hang on I am offshore but I bank with ... Kiwibank , was one of the first to sign up !

Stephen

[davereid]

Hang on I am offshore but I bank with ... Kiwibank , was one of the first to sign up ! Stephen

Kiwibank has been a great success, and those who bank with it have enjoyed lower fees, and interest rates than those who bank with the international banks.

But, its not correct to assume that because profits go overseas with international banks, that New Zealand is disadvantaged.

This is based on the assumption, that if we have $100 going around, and a yank or skippy takes $25 home as profit, that now we only have $75.

Most people assume, (quite incorrectly), that the supply of money is fixed, or limited, and that only the government can create more money, and that to do so is inflationary.

In reality, money is just a medium of exchange, whereby we trade items of value, using money as the measure, and sometimes as a store of wealth.

In fact, the supply of money is virtually limitless.
What does this really mean for us as traders and producers ?
It means that profit taking is irrelevant, as paradoxically as that may seem.

Lets take Joe the farmer. Joe has 20 acres of gorse he can't use, and he doesn't have the money to turn it to pasture. It's wasteland, and unproductive.

Then Joe meets an investor, someone seeking a profit, who is prepared to use their money to develop Joes land, seeking a profit to take away.

The investor puts money into Joes farm. A tractor and bulldozer are hired and the land is cleared. Joe plants potatoes, and 3 years later has a great crop.

Real new wealth has been created.

Wealth that never existed.

After paying for the tractor, the bulldozer, the seed potatoes, the labourers, the man who fixes the tractor, Joes' Tax and rates and PAYE, and buying new seed potatoes for next season, Joe has made a profit.

The investor and Joe share the profit, with the overseas investor taking it to New York.

New Zealand of course is massively better off. No doubt. No one lost, we all won.

[Brian d marge]

Kiwibank has been a great success, and those who bank with it have enjoyed lower fees, and interest rates than those who bank with the international banks.

But, its not correct to assume that because profits go overseas with international banks, that New Zealand is disadvantaged.

This is based on the assumption, that if we have $100 going around, and a yank or skippy takes $25 home as profit, that now we only have $75.

Most people assume, (quite incorrectly), that the supply of money is fixed, or limited, and that only the government can create more money, and that to do so is inflationary.

In reality, money is just a medium of exchange, whereby we trade items of value, using money as the measure, and sometimes as a store of wealth.

In fact, the supply of money is virtually limitless.
What does this really mean for us as traders and producers ?
It means that profit taking is irrelevant, as paradoxically as that may seem.

Lets take Joe the farmer. Joe has 20 acres of gorse he can't use, and he doesn't have the money to turn it to pasture. It's wasteland, and unproductive.

Then Joe meets an investor, someone seeking a profit, who is prepared to use their money to develop Joes land, seeking a profit to take away.

The investor puts money into Joes farm. A tractor and bulldozer are hired and the land is cleared. Joe plants potatoes, and 3 years later has a great crop.

Real new wealth has been created.

Wealth that never existed.

After paying for the tractor, the bulldozer, the seed potatoes, the labourers, the man who fixes the tractor, Joes' Tax and rates and PAYE, and buying new seed potatoes for next season, Joe has made a profit.

The investor and Joe share the profit, with the overseas investor taking it to New York.

New Zealand of course is massively better off. No doubt. No one lost, we all won.

I can see the point but I cant ( and am open to it ) agree with it

SOE ( e.g. electricity companies) I can see the investment thing and the profit ( since when does a basic utility need to make a profit , unless its an indirect tax, the overseas investor can take a cut , sure because we haven't enough capital ( why?))

but there IS a finite money stream coming in to the company ( say 100 dollars ) and the CEO takes his cut , 10 and profit overseas 10 , then there is only 80 left )

now the POTENTIAL for unlimited money is there , but that is held in check by the physical resources of the company

and at the end of the day my one bar heat is chewing through a very finite pay packet ,when it doest have to if the country used its capital better ( labour and limited money ~)

Rail is a very efficient way of moving stuff around , what short sighted numbskull decided to rely on roading !

Stephen

[Clockwork]

Kiwibank has been a great success, and those who bank with it have enjoyed lower fees, and interest rates than those who bank with the international banks.

But, its not correct to assume that because profits go overseas with international banks, that New Zealand is disadvantaged.

This is based on the assumption, that if we have $100 going around, and a yank or skippy takes $25 home as profit, that now we only have $75.

Most people assume, (quite incorrectly), that the supply of money is fixed, or limited, and that only the government can create more money, and that to do so is inflationary.

In reality, money is just a medium of exchange, whereby we trade items of value, using money as the measure, and sometimes as a store of wealth.

In fact, the supply of money is virtually limitless.
What does this really mean for us as traders and producers ?
It means that profit taking is irrelevant, as paradoxically as that may seem.

Lets take Joe the farmer. Joe has 20 acres of gorse he can't use, and he doesn't have the money to turn it to pasture. It's wasteland, and unproductive.

Then Joe meets an investor, someone seeking a profit, who is prepared to use their money to develop Joes land, seeking a profit to take away.

The investor puts money into Joes farm. A tractor and bulldozer are hired and the land is cleared. Joe plants potatoes, and 3 years later has a great crop.

Real new wealth has been created.

Wealth that never existed.

After paying for the tractor, the bulldozer, the seed potatoes, the labourers, the man who fixes the tractor, Joes' Tax and rates and PAYE, and buying new seed potatoes for next season, Joe has made a profit.

The investor and Joe share the profit, with the overseas investor taking it to New York.

New Zealand of course is massively better off. No doubt. No one lost, we all won.

Your example is all well and good when the investment can be used to create income via export earnings but how is NZ better off when a foreign investor purchases an existing entity/asset (so they've created nothing new) that earns its revenue solely/largely from the domestic economy, as any service industry like banking, telecoms, utilities and infrastructure. Generally cut jobs rather than create them and the sends the profits offshore?

[davereid]

Electricity companies are a strange beast, New Zealand SOE model is set up as a virtual tax. The monopoly of power companies is assured by government, and paradoxically the left.

I can't find the exact quote now, google is not helping. But a past CEO of Meridian said something like:

"I have invested $50,000,000 of the companies money attempting to get resource consent to build new generation, without a single win, or even the prospect of generating a single unit of new energy.

In all conscience, I have to advise the board that we should not attempt to establish new generation. We can sell every unit we currently produce, at the worlds highest prices, and the Resource Management Act will ensure that this remains the case"

In other words, my Joes Farm analogy did not allow for laws that stop Joe planting potatoes (to protect the view), even while people starve.

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Your money, if not taken overseas by investors will go there anyway. The dividends left in NZ are soon turned into cars, TV sets, or motorcycles, from foreign manufacturers.

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N.Z. Rail has gone broke so often that its a joke, with the misery added to by government that can't resist buying it back.

It would appear that the worlds best rail operators can't make a profit on narrow gauge rail, through moutains, with no cargo. The big stuff is best sent in a ship, the small stuff in a truck.

[Oscar]

I didn't.

Don't think to many people are aware of the ramifications. If not just think of how much the Aussie banks have ripped us off. Even Key is on record suggesting that their profit margin is too high. And remember how much forighn corperations allowed rail to backslide

Now English is going to open up us to be screwed further.

If any one thinks that the offshore share holder is going to give a toss about the locals..........think again.


Skyryder

The profit margins of Aussie banks are excessive.
But they are also amongst the most financially sound Banks in the world.
This has sheltered us from some aspects of the worldwide financial meltdown.

We also glean some second hand benefit from the Australian Government Deposit G'tee scheme.

If we had been relying 100% on local banks in the past 12 months, things would have been much worse.

[Clockwork]

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Your money, if not taken overseas by investors will go there anyway. The dividends left in NZ are soon turned into cars, TV sets, or motorcycles, from foreign manufacturers.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Not quite the same thing though is it. At least this way the consumer gets somethng in exchange for the money.

If anyone is going to make outrageous profits out of poor market models or monopolies I would prefer it be the Government. They're going to get their "pound of flesh" out of the economy somehow and if they're not making fat SOE profits they'll just demand more income tax!

I find the idea that all foreign investment in NZ is good and to be encouraged at all costs absurd. I rekon we need to be more selective about what sort of investment we want.

Show me a foreign investor that can demonstrate a net economic benefit to the NZ economy via overseas earnings and I'd happily let them offshore their profits may be even at a reduced tax rate!!

But I can't think of many foreign investments in NZ that would fall into this category. What we seem to get are the type I described in my previous post

[Winston001]

I find the idea that all foreign investment in NZ is good and to be encouraged at all costs absurd. I rekon we need to be more selective about what sort of investment we want.

Agreed and I don't think anyone says that. The Overseas Investment Commission exists for this purpose. There are barriers.

Show me a foreign investor that can demonstrate a net economic benefit to the NZ economy via overseas earnings and I'd happily let them offshore their profits may be even at a reduced tax rate!!

But I can't think of many foreign investments in NZ that would fall into this category. What we seem to get are the type I described in my previous post

We mustn't be paranoid about foreign investment. NZers invest in other countries and we as a nation benefit. I think we would all agree about not wanting asset strippers but frankly, there isn't a lot to strip out of NZ. Sod all minerals, they can't pick up land and take it away, what's to lose....??

[Clockwork]

Agreed and I don't think anyone says that. The Overseas Investment Commission exists for this purpose. There are barriers.

Sorry, but you don't hear comments like that from the Government or the likes of the Business Round Table.

Bill English was citing the Auckland Airport business when justifying his decision to relax the rules and claiming that such investments would create jobs In NZ. I honestly doubt that, more likley to have the opposite effect.

"Finance Minister Bill English yesterday said the Government was dropping criteria preventing the sale of "strategically important assets" into foreign hands as part of a raft of changes aimed at encouraging greater foreign investment. Mr English said it was possible the change would put Auckland Airport back on the sales block, although any bid would be subject to the same screening process as for any other major foreign investment."

""Let's get practical - we need the money because we need the jobs. " - Bill English

How does selling Auckland Airport create jobs in NZ?

"The Government will introduce a new right to veto on the grounds of "national interest" - but Mr English expected it to be used so rarely that he could not think of a case which might require it to be invoked."

And as quoted from the radio..
"Finance Minister Bill English said [In the past 10 years] 98% of all applications were approved anyway and the move would speed up the process and cut red tape."

But the rules he is reversing havn't been in effect for 10 years so I can't imagine why he would cite such a statistic!!

Now I admit I've selectively quoted the man here but I don't believe I've misrepresented what he was saying.