Is John Key the man to lead NZ?

[Robert Taylor]

You got it. Like I said, I loved the old Squawks, but as a 21st century strike aircraft they were not a lot better than a squadron of Spitfires.

But fast jets are 3rd generation warfare, and we're well into 4GW. A couple more SAS squadrons would have been cheaper and more effective than the Squawks, but binning them was a good excuse for a bunch of civvies who had no interest in the services to rant about what a bitch Helen Clark was, so it's all good.

At least it showed we had the intent to pay our way to help defend ourselves. Had a Nat Govt been returned in 99 we would have had a continuation of having a woman priminister and also a bunch of F16s.

[davereid]

Now hand on heart:
I do not believe that the government should be involved in any business activities of any kind unless it is to introduce and establish it for the nation!
Ownership of any such asset is of no consequence, what is important to consumers is the goods and services that they provide!
Once established such a business should be sold off and the money received from the transaction should be returned to the government coffers for use in core government activities or reduction of government debt!

I would argue that.. if government has to introduce and establish something for the nation, that the nation should benefit from that investment. After all it was the nation that made the investment.

Ownership of assets is at the very heart of the reason they exist. For the owner collects the profits.

Why should I as a taxpayer, fund the development of power stations, then allow then to be sold, then be told I have to pay enough to ensure the americans who bought my power station get a 10% return on investment ?

Those american investors are free to build their own new power stations if they wish, they simply smell a cheap deal.

And lets not forget the laws of supply and demand. If you own a power station, and can sell every unit of electricity you produce at $0.25, why would you build a new power station ? You will have spent money doing it, and is there is more supply, you will only get $0.15c a unit.

The idea that assets should be sold and used to retire debt, is appealing, but simplistic.

A debt will accrue interest. Say 10%.

Your asset will provide income, say 10%.

Asset worth $1000, returns $100.
Loan worth $1000, costs $100.

Sell asset, repay the loan, net position no change, except you don't have the asset.

If you have assets that you will always need in the future you have just screwed yourself. The loan had a finite term and would have been paid off. The asset would have paid you dividends forever. That of course is why the man you sold it to bought it.

This of course assumes that you get a good price for your asset when you sell it. John Key says we will get $5b for our network of power stations.

They cost more than that to build.

How much would they cost to build again, assuming you could find enough rivers to dam and valleys to flood ? I bet you could NEVER build them again.

[ducatilover]

I would argue that.. if government has to introduce and establish something for the nation, that the nation should benefit from that investment. After all it was the nation that made the investment.

Ownership of assets is at the very heart of the reason they exist. For the owner collects the profits.

Why should I as a taxpayer, fund the development of power stations, then allow then to be sold, then be told I have to pay enough to ensure the americans who bought my power station get a 10% return on investment ?

Those american investors are free to build their own new power stations if they wish, they simply smell a cheap deal.

And lets not forget the laws of supply and demand. If you own a power station, and can sell every unit of electricity you produce at $0.25, why would you build a new power station ? You will have spent money doing it, and is there is more supply, you will only get $0.15c a unit.

The idea that assets should be sold and used to retire debt, is appealing, but simplistic.

A debt will accrue interest. Say 10%.

Your asset will provide income, say 10%.

Asset worth $1000, returns $100.
Loan worth $1000, costs $100.

Sell asset, repay the loan, net position no change, except you don't have the asset.

If you have assets that you will always need in the future you have just screwed yourself. The loan had a finite term and would have been paid off. The asset would have paid you dividends forever. That of course is why the man you sold it to bought it.

This of course assumes that you get a good price for your asset when you sell it. John Key says we will get $5b for our network of power stations.

They cost more than that to build.

How much would they cost to build again, assuming you could find enough rivers to dam and valleys to flood ? I bet you could NEVER build them again.

To my (limited) knowledge, if you sell an asset, it only makes sense that we have a smaller income from said asset.
So, when it's earning less, we are not quite so well off.
I suppose it'd end up somewhat like the American health, power and water systems with all their privatisation.
Not what I want as a poor person.

[shrub]

At least it showed we had the intent to pay our way to help defend ourselves. Had a Nat Govt been returned in 99 we would have had a continuation of having a woman priminister and also a bunch of F16s.

Defend ourselves against who? The only countries that have invaded others in my lifetime have been Iraq and the USA. Iraq is pretty well fucked and the US can't afford to invade anyone else for a long, long time. Besides, the only places that is close enough to be a threat and has any motive is the Chatham Islands, and they'd need to get us to give them a lift across.

And why would anyone invade us anyway? For our pineapple lumps? Daniel Carter? The design patents of the Trekka? Mate, if any foreign state wants anything we have all they have to do is buy it off us, usually at a discount rate. For example, the price of the royalties on our petroleum deposits is probably about what it would cost to send a C130 and a couple of Humvees from Texas. China definitely wants our water and ability to produce food, especially our dairy produce, but already we sell it to them. And if (when) China wants NZ to bend over and assume the position, all they have to do is say "you know that money we lent you, well we'd like a higher rate please", and we'd be fucked. Especially if they said "we've decided not to pay you your asking price for milk. If you don't like it we'll sell you a plastic whistle."

Remember how fucked up we were when Britain changed suppliers in the 70s? Don't you just love how history repeats itself, only this time we're not dealing with the Old Country who want to help us out, this time we're dealing with China, and those boys play hard ball.

If we had a clever government they'd be looking to diversify our exports and markets. But we don't and won't come Saturday.

[Robert Taylor]

Defend ourselves against who? The only countries that have invaded others in my lifetime have been Iraq and the USA. Iraq is pretty well fucked and the US can't afford to invade anyone else for a long, long time. Besides, the only places that is close enough to be a threat and has any motive is the Chatham Islands, and they'd need to get us to give them a lift across.

And why would anyone invade us anyway? For our pineapple lumps? Daniel Carter? The design patents of the Trekka? Mate, if any foreign state wants anything we have all they have to do is buy it off us, usually at a discount rate. For example, the price of the royalties on our petroleum deposits is probably about what it would cost to send a C130 and a couple of Humvees from Texas. China definitely wants our water and ability to produce food, especially our dairy produce, but already we sell it to them. And if (when) China wants NZ to bend over and assume the position, all they have to do is say "you know that money we lent you, well we'd like a higher rate please", and we'd be fucked. Especially if they said "we've decided not to pay you your asking price for milk. If you don't like it we'll sell you a plastic whistle."

Remember how fucked up we were when Britain changed suppliers in the 70s? Don't you just love how history repeats itself, only this time we're not dealing with the Old Country who want to help us out, this time we're dealing with China, and those boys play hard ball.

If we had a clever government they'd be looking to diversify our exports and markets. But we don't and won't come Saturday.

Are you not aware that Oz has a huge military presence because there are hundreds of millions of Indonesians just up the road?

Are you also not aware that had a few naval battles not gone in favour of the US we would have had the murderous presence of a few Japanese tourists here in NZ?

THOSE WHO ARE IGNORANT OF HISTORY ARE CONDEMNED TO REPEAT ITS MISTAKES

We have got a huge fishery and coastal reserve, theres probably lots of oil and ironsand out there ( which we should be mining ) We are one of the worlds foodbowls, we have abundant fresh water. To think that we wont be threatened in the future is naive.

[SPman]

To my (limited) knowledge, if you sell an asset, it only makes sense that we have a smaller income from said asset.
So, when it's earning less, we are not quite so well off.
I suppose it'd end up somewhat like the American health, power and water systems with all their privatisation.
Not what I want as a poor person.

Supposedly, these sales will produce around $5bn-$7bn -- but nobody's quite sure exactly how much.
Let's assume $5bn.
Now if that were used to retire $5bn worth of borrowing then I would expect we'd save ourselves about 4% of that amount annually -- the interest paid on that borrowing.
This is $200m.
Presently, we're seeing a dividend of over $800m being returned from just some of those assets which will be on the block. Selling down to 51% means that the government will be losing almost $400m in dividends -- in return for a savings of $200m on interest otherwise payable.
That doesn't sound like a good deal to me.
And let's not forget we have over $100m to pay out to the Australian bank that will be handling the sale.
But, that assumes the whole amount realised from the sale would go to paying off debt -- and National has told us that this won't be the case at all. A good chunk of that money will be spent supposedly on education and boosting our science industries.
So, if we end up paying down just $2bn of debt then we're going to be swapping $400m per annum of dividends for $80m per annum of interest savings plus a one-off cash injection that will doubtless have a fair percentage swallowed up by the bureaucracy of government.


Now, have I got a deal for you on some vintage F16's..........

[pete376403]

Are you not aware that Oz has a huge miliatry presence because there are hundreds of millions of Indonesians just up the road?

Are you also not aware that had a few naval battles not gone in favour of the US we would have had the murderous presence of a few Japanese tourists here in NZ?

THOSE WHO ARE IGNORANT OF HISTORY ARE CONDEMNED TO REPEAT ITS MISTAKES

We have got a huge fishery and coastal reserve, theres probably lots of oil and ironsand out there ( which we should be mining ) We are one of the worlds foodbowls, we have abundant fresh water. To think that we wont be threatened in the future is naive.

Absolutely correct. So when the millions of Indonesians or Chinese decide they want our stuff, you really think a few antique Skyhawks would make them think again?

[Ocean1]

imho a few land mounted rail guns would probably be the go, after all if an invasion force lands here we're fooked, more SAS or not. Politics, getting in the way of practical solutions since ages ago eh.

Any such asset would be the first casualty in any invasion. Right idea, just need to make 'em mobile.

And any invasion of NZ would need to involve a massively expensive occupying force, there's few worse terrains in the world to attempt to hold against simple guerrilla tactics.

[Brian d marge]

Are you not aware that Oz has a huge miliatry presence because there are hundreds of millions of Indonesians just up the road?

Are you also not aware that had a few naval battles not gone in favour of the US we would have had the murderous presence of a few Japanese tourists here in NZ?

THOSE WHO ARE IGNORANT OF HISTORY ARE CONDEMNED TO REPEAT ITS MISTAKES

We have got a huge fishery and coastal reserve, theres probably lots of oil and ironsand out there ( which we should be mining ) We are one of the worlds foodbowls, we have abundant fresh water. To think that we wont be threatened in the future is naive.

oh wars are just passer, ( sp) , See crafer farm for how its done these days,
boredy boredy bored with war , its not where the action is

lets see , iron sand ( lots of gay people on beaches ) lets say u can make Iron , out of it , ...buy a Smelter , lobby government with a proposal promising 1/4 to 1/2 back in taxes , if the government stumps up the investment ...( i mean if it goes pear shaped , u don't want to be holding any risk )

then just mine away , send all money back to the mother ship , then pay taxes owed , if any

meh , bored with war, ..not since they made all motorcycles diesel


Stephen

[oldrider]

I would argue that.. if government has to introduce and establish something for the nation, that the nation should benefit from that investment. After all it was the nation that made the investment.

Agreed and the sale should reflect that in the price.

Ownership of assets is at the very heart of the reason they exist. For the owner collects the profits.

The asset produces a product for consumption, the price of the product consumed should reflect the level of profit.

Why should I as a taxpayer, fund the development of power stations, then allow then to be sold, then be told I have to pay enough to ensure the americans who bought my power station get a 10% return on investment ?

Why must you presume the buyer's will be American?

Those american investors are free to build their own new power stations if they wish, they simply smell a cheap deal.

Why do you presume the deal will be cheap?

And lets not forget the laws of supply and demand. If you own a power station, and can sell every unit of electricity you produce at $0.25, why would you build a new power station ? You will have spent money doing it, and is there is more supply, you will only get $0.15c a unit.

New power stations are only built to meet forecast increase in demand.

The idea that assets should be sold and used to retire debt, is appealing, but simplistic.

True! One would expect that sales were done following thorough planning and due diligence by the involved parties.

A debt will accrue interest. Say 10%.

Your asset will provide income, say 10%.

Asset worth $1000, returns $100.
Loan worth $1000, costs $100.

Sell asset, repay the loan, net position no change, except you don't have the asset.

The new owner will still (or now) be paying tax on those profits to the government.

If you have assets that you will always need in the future you have just screwed yourself. The loan had a finite term and would have been paid off. The asset would have paid you dividends forever. That of course is why the man you sold it to bought it.

True but the business will still be here in the country and no longer a distracting political football.

This of course assumes that you get a good price for your asset when you sell it. John Key says we will get $5b for our network of power stations.

True, one would expect that the government would maximise the effects of the transaction and not sell for the sake of selling.

They cost more than that to build.

True! That fact should be taken into consideration in the terms of the sale.

How much would they cost to build again, assuming you could find enough rivers to dam and valleys to flood ? I bet you could NEVER build them again.

True, not unless there were some very big adjustments made to the resource management act, nothing will ever get done ever again.

Then there are some assets that have become liabilities and are no longer profitable and are dysfunctional without taxpayer's unnecessarily propping them up.

Railways was one of these but the Labour government got rid of it at fire sale price and then bought it back at an astronomical cost/loss to the Taxpayer!

Air NZ was only bought into to save the politicians perks for life, they (politicians) needed ANZ more than the taxpayers did.

The Taxpayer could just use the opposition airlines at the same price or less but the politicians had nowhere else to go but ANZ!

There is nothing wrong with asset sales or purchase, what is wrong is the motivation and reasons for doing it!

Can our politicians really be trusted with such an important politically impartial "business" decision? ..... That's the real question IMHO!

They should not be involved in business and should be focussing on their core activities and even then can they be trusted to get it right?

[rainman]

Supposedly, these sales will produce around $5bn-$7bn -- but nobody's quite sure exactly how much.
Let's assume $5bn.
Now if that were used to retire $5bn worth of borrowing then I would expect we'd save ourselves about 4% of that amount annually -- the interest paid on that borrowing.
This is $200m.
Presently, we're seeing a dividend of over $800m being returned from just some of those assets which will be on the block. Selling down to 51% means that the government will be losing almost $400m in dividends -- in return for a savings of $200m on interest otherwise payable.
That doesn't sound like a good deal to me.
And let's not forget we have over $100m to pay out to the Australian bank that will be handling the sale.
But, that assumes the whole amount realised from the sale would go to paying off debt -- and National has told us that this won't be the case at all. A good chunk of that money will be spent supposedly on education and boosting our science industries.
So, if we end up paying down just $2bn of debt then we're going to be swapping $400m per annum of dividends for $80m per annum of interest savings plus a one-off cash injection that will doubtless have a fair percentage swallowed up by the bureaucracy of government.


Now, have I got a deal for you on some vintage F16's..........

Brilliant comment. And yet the sheeple here will still vote for "the successful Mr Key". Like lambs to the slaughter.

And any invasion of NZ would need to involve a massively expensive occupying force, there's few worse terrains in the world to attempt to hold against simple guerrilla tactics.

There's no need to invade, we're so easily bought.

Then there are some assets that have become liabilities and are no longer profitable and are dysfunctional without taxpayer's unnecessarily propping them up.

Not energy assets and national airlines, though.

Railways was one of these but the Labour government got rid of it at fire sale price and then bought it back at an astronomical cost/loss to the Taxpayer!

I agree Labour overpaid for the buyback but it was a sensible strategic purchase.

Air NZ was only bought into to save the politicians perks for life, they (politicians) needed ANZ more than the taxpayers did.

Sorry, but that's horseshit. Tourism is a hugely important part of our economy. Having a national carrier is critical.

There is nothing wrong with asset sales or purchase, what is wrong is the motivation and reasons for doing it!

You mean like mindless ideology rather than good business sense (see SPMan's comment)? Some assets should indeed not be owned by government - but energy assets are strategic and don't fall into hat category. Dumping them all at (relatively) the same time, selling only 49%, selling the good performers, selling the entire sector, spending the money on irrigation and schools - these are all entirely the wrong way to go about managing an asset portfolio. We will end up poorer for this, not wealthier. Key is not acting in NZ' best interests.

What I want to know is, how can you and others like you who defend this move, stomach the assault on property rights that this so clearly is? We the people of NZ own these assets, and Key and his bunch of wide boys are going to thieve them and redistribute the proceeds to pay election bribes and sustain unsustainable tax cuts that reward the wealthy; all the while slashing social spending. The rest of us will just get stuck with the debt, the higher prices, and have to bail the new owners out when they inevitably come crawling back to the government tit.

This should be anathema to any right thinking libertarian, but only davereid has the balls to tell it how it is. There is a moral dimension to this that transcends tribal politics, and the unwillingness of much of the right to speak out on this is telling.

[shrub]

Are you not aware that Oz has a huge miliatry presence because there are hundreds of millions of Indonesians just up the road?

Are you also not aware that had a few naval battles not gone in favour of the US we would have had the murderous presence of a few Japanese tourists here in NZ?

THOSE WHO ARE IGNORANT OF HISTORY ARE CONDEMNED TO REPEAT ITS MISTAKES

We have got a huge fishery and coastal reserve, theres probably lots of oil and ironsand out there ( which we should be mining ) We are one of the worlds foodbowls, we have abundant fresh water. To think that we wont be threatened in the future is naive.

Do you seriously think China, Indonesia etc will spend a fortune invading us militarily when all they have to do is get us so deeply in debt to them that we have to sell them our food, water, coal and electricity generation for a few billion to pay that debt back?

[shrub]

Absolutely correct. So when the millions of Indonesians or Chinese decide they want our stuff, you really think a few antique Skyhawks would make them think again?

It's well known fact that if Iraq had had a dozen or so Squawks there is no way Bush would have invaded. The reason the US wouldn't let us sell our old ones was because they knew any military that got their hands on them would be invincible.

[mashman]

Any such asset would be the first casualty in any invasion. Right idea, just need to make 'em mobile.

And any invasion of NZ would need to involve a massively expensive occupying force, there's few worse terrains in the world to attempt to hold against simple guerrilla tactics.

Absolutely. Perhaps land based translated as fixed point... like ya say, they need to be mobile.

Very true. We're too narrow and once the high ground has been taken it'd be game over. Still, rail guns would give us a shot, for want of a better expression.

[Robert Taylor]

Absolutely correct. So when the millions of Indonesians or Chinese decide they want our stuff, you really think a few antique Skyhawks would make them think again?

Of course not, but what really sucks is we show absolutely no intent to defend ourselves. What also sucks is we effectively freeload off the Australians.