Hard News by Russell Brown

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Hard News: Only what we would expect a child to do

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  • Kumara Republic, in reply to Craig Ranapia,

    God knows that they'll need the distraction if they keep putting out policies with costings that look like they've been done by Mark Hotchin during a long liquid lunch.

    If anyone asks Phil Goff where the money's going to come from, here's a good start.

    The southernmost capital … • Since Nov 2006 • 5446 posts Report Reply

  • Andre Alessi, in reply to Sacha,

    And I have yet to hear any convincing explanation of how cutting government spending reduces non-government debt. Magic beans, perhaps.

    Consistency matters. After all, if they were claiming this thirty years ago, they can't stop claiming it now without being called hypocrites, flip-floppers, etc.

    Never mind that the policy has never worked, it's a "principle" so we're all stuck with it.

    See also: crime and punishment policy, tax policy, employment law, etc

    Devonport, New Zealand • Since Nov 2006 • 864 posts Report Reply

  • Matthew Poole, in reply to Craig Ranapia,

    So, any party got a policy that they'll scale back the dividend demands from state-owned generation companies? Or is gouging consumers to plump your own bottom line only bad when dirty dirty foreigners and rich pricks do it?

    Pretty sure the Greens want dividend payments stopped, or at least cut way back, but the problem with that is that power prices probably won't display a corresponding drop.
    At least if it's the state doing the gouging the money remains in the country. Flogging off part of your income-generating assets in a manner that invites foreigners to buy them means you lose that income.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • BenWilson, in reply to Sam F,

    Makes it all the sadder to see the contrasting editorial, doesn't it?

    Yeah, talk about a National Party press release.

    National has to get really specific about what they're going to buy with the proceeds, offer clear evidence that all the money is earmarked for that. Inherently the idea of trading up to different assets is not bad, if only it could be believed that that is what they will actually do. 10 billion worth of new assets on the books might not look so bad, if there was genuine engagement with the public (whose money they are playing with) to show what assets and where. If it's mostly going into highways I'll be royally pissed.

    Or is gouging consumers to plump your own bottom line only bad when dirty dirty foreigners and rich pricks do it?

    It's definitely way less infuriating when you know the profits actually go to the government.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • Rich Lock, in reply to Ian Dalziel,

    Then what do they (we) have to pay the rest of their borrowings (plus interest) back with?

    Why, you silly goose, it's quite simple.

    We all use the money saved in our tax cuts to buy shares in companies that are part of The Big Selloff (tm). Then, erm, the dividends on the shares you buy are used to pay off the money the goverment is borrowing to run the country. See?

    back in the mother countr… • Since Feb 2007 • 2728 posts Report Reply

  • Sacha, in reply to BenWilson,

    National has to get really specific about what they're going to buy with the proceeds

    On Close Up last night (with a surprisingly assertive Sainsbury), Key mentioned using the proceeds to invest in irrigation schemes for South Island (dairy) farmers.

    Because there's no way the lil battlers can possibly pay for their own, let alone in a way that reflects the true input or environmental costs. And selling ice cream to China is the ambitious future of this nation, I tells you.

    Ak • Since May 2008 • 19745 posts Report Reply

  • Matthew Poole,

    This article in the SST is interesting, if depressing. Did the maths on welfare cost over here, and the numbers are pretty minimal overall. True levels of benefit misuse (in the "bludging" sense) are probably less than the foregone income from the last round of tax cuts.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Kumara Republic, in reply to Sacha,

    And selling ice cream to China is the ambitious future of this nation, I tells you.

    Either that, or designer razor wires and security walls that blend in with the McMansion hedge.

    The southernmost capital … • Since Nov 2006 • 5446 posts Report Reply

  • BenWilson, in reply to Sacha,

    Key mentioned using the proceeds to invest in irrigation schemes for South Island (dairy) farmers.

    Gawd, that must have happened really quickly (he does talk fast), I didn't hear it at all in that clip (I'm not saying it didn't happen). What I did find incredibly disingenuous in that spiel was blaming the rising cost of power entirely on government ownership. There was no mention whatsoever of the massive rise in oil prices that happened during the period he's talking about, which meant cascading price increases across the entire energy sector.

    Sainsbury was good, I agree. He hammered the lack of detail about the cuts. He should also have hammered the lack of detail about where the redistribution of assets was going. Key spoke of 33 billion worth of assets we want to buy and can't afford. These things he *can* itemize, and should be challenged right now to do so. I expect there's a hell of a lot of cuts in there that don't have to come from beneficiaries.

    As a side note, he mentioned that people with money in Kiwisaver have nowhere to invest it, except Australia. That should have been slammed immediately. Kiwisaver is *savings*. It's a superannuation plan. It's not intended to be something we sink into the stockmarket, without the slightest clue (for most people) about what we're doing, it's a plan to encourage saving through tax cuts to savings. I can't think of a worse time to be suggesting that average people should be investing in the stockmarket, FFS we just had the biggest crash in 80 years.

    Furthermore it's total bullshit that there isn't a New Zealand stockmarket to invest in, not to mention lots of other ways of investing locally, the most popular being in property. The totals invested there rival even the huge numbers that Key threw around for NZ's asset base. There's putting it in the bank, putting it into commodities, buying your own small assets, investing directly into a business, buying things that save money (like better energy solutions, or investing in your own education), paying down debt (my main reason for not being in Kiwisaver) etc, etc.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • Paul Williams, in reply to BenWilson,

    As a side note, he mentioned that people with money in Kiwisaver have nowhere to invest it, except Australia. That should have been slammed immediately. Kiwisaver is *savings*. It's a superannuation plan. It's not intended to be something we sink into the stockmarket, without the slightest clue (for most people) about what we're doing, it's a plan to encourage saving through tax cuts to savings.

    But Ben, don't most super plans include a balance of investments including in stocks? Also, I must confess I know little about my (Australian compulsory) super. In my defence, I have little influence over it beyond choosing a provider and a scheme (every provider must offer at least three schemes) and checking the benchmarked performance - it's this that might be behind Key's comments? That the average rate of domestic investment returns generate off the NZX is low by comparison with those on the ASX?

    Sydney • Since Nov 2006 • 2273 posts Report Reply

  • Kumara Republic,

    @Matt P: what chance of a 1981 Part II happening over the wealth gap?

    @Ben W: said savings policy still seems to have echoes of the Dancing Cossacks. >:(
    I hate to say it again, but David Harris was right - it's the lingering cargo cultism behind current Nouveau Riche thinking that continues to make me, and us, cringe.

    The southernmost capital … • Since Nov 2006 • 5446 posts Report Reply

  • Sacha, in reply to BenWilson,

    I didn't hear it at all in that clip

    Ooops you're right, it was from the earlier TVNZ news clip (at the 1m40 mark).

    Ak • Since May 2008 • 19745 posts Report Reply

  • BenWilson,

    But Ben, don't most super plans include a balance of investments including in stocks?

    Paul, the way it's done in Ozzie, yes. My own Ozzie plan, forced on me by their system, is like that. It lost a lot of money recently. I expect it will balance out by the time I get my hands on it, in 16 years, although I'd much rather have the money off my mortgage here, which would provide me with a guaranteed 7% tax-free return every year, which would in turn lower my cost of life, pay my mortgage off quicker, and shield me from the random disaster that is provisional tax. Indeed, if I'd had it sooner, I'd have been able to buy a property about 5 years earlier, and that would have saved me about $100,000 right there.

    Edit: Not that I think super schemes are a bad idea, mind. I think they're a very good idea, and could well be a large part of what is behind Australia's prosperity, and the success of their stockmarket - they have very high levels of local investment, which helps them a great deal.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • Paul Williams, in reply to Matthew Poole,

    I've said consistently that "No asset sales in our first term" was just code for "We'll strip-mine the asset ledger in the second term", and Key has proved that I was correct.

    I'm catching up a little in this discussion, but thought National were reasonably clear that they'd not sell assets in any first term but made clear they'd consider asset sales if they were elected to a second term. If that's broadly correct, then Key's reasonably signalling his plans well ahead of the election which is fair enough. I'm not making a statement about the policy per se, just about the process which I think is reasonable.

    I'd much rather have the money off my mortgage here, which would provide me with a guaranteed 7% tax-free return every year, which would in turn lower my cost of life, pay my mortgage off quicker, and shield me from the random disaster that is provisional tax.

    Sure. Understood. Though the clear downside of compulsory super is that, if you were still here, you'd have no access to it anyway.

    Edit: Not that I think super schemes are a bad idea, mind. I think they're a very good idea, and could well be a large part of what is behind Australia's prosperity, and the success of their stockmarket - they have very high levels of local investment, which helps them a great deal.

    Edit: Too right! I can't help but think NZ is still paying for the idiocy of Muldoon and his decision to scrap the 3rd Labour Government's compulsory pension savings' scheme.

    Sydney • Since Nov 2006 • 2273 posts Report Reply

  • Sacha,

    For those who haven't seen it, John Campbell's interview with Key was also revealing - and streets ahead in the intelligent interviewing stakes, though some spin still slipped through.

    Nailed him on the whole 'mums and dads' being taxpayers thing, though. This is just another transfer of wealth from all of the public who already own those assets to those who can afford to buy shares. That's 'mums and dads' who look more like the Hotchins and the Fays - or foreign investment funds, more like.

    Ak • Since May 2008 • 19745 posts Report Reply

  • Matthew Poole, in reply to Paul Williams,

    I can’t help but think NZ is still paying for the idiocy of Muldoon and his decision to scrap the 3rd Labour Government’s compulsory pension savings’ scheme.

    Piggy scrapped that scheme. English stopped payments to the Cullen Fund in order to pay for tax cuts, and reduced the level of mandated employer contribution to KiwiSaver. And they call Labour poor managers of the economy?!

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Matthew Poole, in reply to Kumara Republic,

    what chance of a 1981 Part II happening over the wealth gap?

    Not sure. I think things would have to get a lot worse before they get to that point. Maybe if National wins in November and the economy is still in dire straits at the start of 2012, triggering more attacking of benefit levels and "expendable" civil servants, we might get to the point of violence. Right now, though, not really seeing it.

    Of course, if National make it to a third term and Pull-ya Benefit is still in charge of slagging of DPB mums and the unemployed all bets are off.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Sacha, in reply to Matthew Poole,

    Of course, if National make it to a third term and Pull-ya Benefit is still in charge of slagging of DPB mums and the unemployed all bets are off.

    You don't seriously think that will take another term?

    Ak • Since May 2008 • 19745 posts Report Reply

  • BenWilson, in reply to Kumara Republic,

    it's the lingering cargo cultism behind current Nouveau Riche thinking that continues to make me, and us, cringe.

    Heh, interesting to hear from a guy in the exact same business as me. My own business partner is very similar to him, although far more right wing.

    I was thinking much the same as him yesterday morning when I came in to find my (better paid) American colleagues had royally stuffed up something I'd been working on. Being a humble diplomatic soul, I didn't just say "Fuck man, put it back how it was, can't you see that won't work". Instead I praised him for his alternative approach, then got him to explain to me how it could do the very thing that had led me down the more correct path. He hit the wall eventually, realized there was no way his design could be finished without some really, really hard, sophisticated coding. He concluded "I guess I should put it back how you made it?". Still no triumphalism from me, instead "Yes, I'm sorry about that, it's my fault for not explaining why I'd done it that way". But curiously, this morning, I found both him and another guy requesting a code review from me, something they've only ever requested from my biz partner, the system guru. I was chuffed. We all won.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • Sacha,

    This government's pervasive lack of ambition continues to unimpress me.

    Key says there are only two options - borrow or increase taxes.

    Nothing about increasing our national *income* especially by improving productivity and smart investment that creates attractive jobs, business opportunities and sustainable high-margin returns for New Zealanders.

    Ak • Since May 2008 • 19745 posts Report Reply

  • Matthew Poole, in reply to Sacha,

    They could start by restoring the R&D credits that they cut within months of taking the reins in order to fatten the lolly scramble they had planned. But that would require vision, and a real (as opposed to claimed) commitment to sustainable, high-value industry developing in NZ.

    Auckland • Since Mar 2007 • 4097 posts Report Reply

  • Andre Alessi, in reply to Matthew Poole,

    I'd love to see more targeted tax credits replacing blanket tax cuts. It makes sense at a practical level by encouraging specific behaviours, and it completely bypasses the "taxation destroys business growth" crap that is still getting recycled even now.

    But there's always the issue of whether New Zealand business will actually come on board, culturally speaking, with policies like these. Sure, start-ups will leap at them, but what we really need is for the stodgy old corporations who actually drive the economy to join in, and I have a strong suspicion that breaking the habits of a lifetime in that regard won't be easy.

    Devonport, New Zealand • Since Nov 2006 • 864 posts Report Reply

  • BenWilson,

    Just discovered that Keith has made us an appropriate thread for this. Suggest we all move there.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • Craig Ranapia, in reply to Kumara Republic,

    If anyone asks Phil Goff where the money’s going to come from, here’s a good start.

    I'd much rather he just put up costings that don't have large holes to be filled with handwavium at some unspecified date. You can have a serious argument about the merits of the policy, but the only thing that's even more indefensible than the costings is the way Goff and Cunlffe got away with it.

    North Shore, Auckland • Since Nov 2006 • 12370 posts Report Reply

  • Kyle Matthews,

    The Herald and Fairfax kept calling me to ask me to do so, but I didn’t return a single call. I knew it wasn’t me, they knew it wasn’t me, so the notion that I would give the story more air by publicly denying it was me, seemed artful at best.

    That must have been an interesting editor - reporter conversation: "So Martin Devlin got arrested for disorderly conduct yesterday. I need you to ring John Campbell and get him to deny that it was him so we can rule him and every other 46 year old out in tomorrow's paper."

    Real telling truth to power stuff.

    I’ve said consistently that “No asset sales in our first term” was just code for “We’ll strip-mine the asset ledger in the second term”, and Key has proved that I was correct.

    I'm entirely happy with Key's announcement. They've stuck to an election promise, and they've outlined next term's policy nice and early to make it an election issue. I'm not happy that they're planning to sell assets, but they're a right wing government, they do these things, at least they're being open and sticking to what they say about it.

    Yes, it’s not going to be popular, is my prediction. In fact, I think it could be unpopular enough to lose National the election. This is the issue Labour should be jumping on, right now, real hard, and keep hammering it.

    If only they didn't have Goff fronting the issue. Key owned him in sound bites last night. Goff must have spent so much time defending asset sales in the 80s that he doesn't know how to attack them 25 years later.

    National has to get really specific about what they’re going to buy with the proceeds, offer clear evidence that all the money is earmarked for that. Inherently the idea of trading up to different assets is not bad, if only it could be believed that that is what they will actually do. 10 billion worth of new assets on the books might not look so bad, if there was genuine engagement with the public (whose money they are playing with) to show what assets and where.

    From a financial point of view, it makes no sense to sell income producing assets, and buy non-income producing assets (or income-costing assets, like schools, hospitals).

    There may be good social reasons for doing so, but I don't think you can claim that the government is trading up assets in any way no matter what it spends the money on.

    Since Nov 2006 • 6243 posts Report Reply

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