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Monday, October 31, 2011

Selling off our SOE's

The present New Zealand government (Nov 2011)  is proposing to sell off shares in our SOE's (State Owned Enterprises).  These include power companies and the State Airline. They propose to keep 51% of the shares in the hands of the government and to give Kiwis the first chance to buy the  shares that are 'on offer'.  At present, the dividends from these companies go into the government coffers and reduce the amount of tax the citizens of New Zealand have to pay.  Reportedy, one of the power companies that they are proposing to sell off is earning a 20% dividend on  the government investment.  Their proposal to sell off part of our SOE's is a little like a trucking company selling off  a profit making-truck to get money to pave the parking lot.  Not a great business move.  I have a problem or two with this proposal.


Ownership
My first problem is I can't see how these shares can be sold to us.  We already own them.  They have been paid for by generations of Kiwis through their taxes.  It's like taking empty bottles from the back of a convenience store and selling them back to the owner.  Since we already own these shares collectively, surly they could only be sold to a non Kiwi.  Then the proceeds should be divided up and sent to each of us - every man, woman and child of us.  How silly would that be.  Far better that we, the people of New Zealand, keep the ownership of the shares and use the dividends to defray taxes.  The present government doesn't own the shares except in-so-far as each member of parliament owns exactly the same amount of these companies as every other Kiwi.


Tax Increase
Of course, if we sell off the shares and reduce the amount of dividends going into the government coffers, taxes will have to increase.  Yes, the government will have some extra cash to do it's work  from the proceeds of the sale but when this money has been used up taxes will increase.  

Taxes will increase for all Kiwis but at least more well off Kiwis who had the spare cash to buy the shares will have some dividends to make up for the extra taxes.  Less well off Kiwis will simply pay more.  In effect we are taking money from the less well off and putting it in the pockets of the more well off.  A typical money-go-round.  The one saving grace of this whole sorry event is that we will get back a third of the dividends in taxes from the Kiwis who have bought the shares.  A very cute system.  We the people of New Zealand will no longer  own a large part of  our SOE's but we still  get a third of the dividends to defray taxes.  That is, unless the better off Kiwis have some system to avoid paying taxes.  Surly they wouldn't do that!!!!


Final Ownership
Eventually, when the owners of these shares need money or when the shares have increased in value, the owners of these shares will sell them.  In fact all we need is another economic crisis (think PIIGS*) to make people desperate to get a little ready cash in their hands.  I don't know how you read the economic climate in the world today but I suspect we have only begun to see a series  of crashes, each one more serious than the previous one.  Who will  buy these shares.  Who has lots of ready cash from selling cheap goods to the rest of the world.  They won't necessarily buy the shares directly.  There are plenty of people who are willing to be a front company or a front company for a front company etc. etc. for a share of the profits.  The shares will go overseas and we become, to a greater and greater extent, tenants in our own country.  

* Portugal, Ireland, Italy Greece and Spain

Banks are lining up to reap the benefits of selling these shares.  One estimate I have heard is that they will end up keeping 1% of the value of the companies they sell.  Do we really want this money flowing off shore to Australia (most of our banks are owned in Australia) 

These banks will likely buy and retain some of the shares.  More money in dividends flowing into Australia.  


Sunday, October 23, 2011

Helping President Obama

I don't think most Americans understand how the American political system works.

Congressmen and Senators
The only thing these folks fear more than not being re-elected is not being reelected and not getting a cushy job as a lobbyist or as a high paid executive in some part of the corporatocracy.  This explains many of their actions when they are in power.  We can use this fear.

The President
When you have elected a good one your president is the true representatives of the people and you have one of the best you have ever had in the White House right now.  When you elect a lemon, the  president is the representatives of the corporatocracy.  Guess who reduced controls on big business and the banks and allowed them to regulate themselves.

 Don't get me wrong.  I'm not against business and certainly not against the so called Capitalism.  Business is good, and properly regulated Capitalism is by far the best system we have come up with.  In the majority of cases, what is good for business is good for the people but this is not axiomatic.  A business that does most of its manufacture overseas is not good for it's country.  A business that pollutes the environment and sickens people living nearby is not good.  Businesses that do not recycle are not good. A business that builds in obsolescence in its products is not good for the citizens of it's country. I'm sure you can think of other examples.

America has a habit of throwing out their best presidents.  Look what happened to Jimmy Carter.  For once you elected a highly intelligent president with the needed vision to protect and nurture America and take her into a bright future.  If you had elected him for a second term there is a very good chance that you wouldn't be a declining country controlled by the industal-military complex, the banks and the  corporatocracy.  You wouldn't be dependent on fossil fuels and you would have a decent medical and general safety net.  Better yet, you would hardly need  this safety net because people would have jobs.  If you get in behind Obama you will get the same result.

A president can't go it alone.  He needs a mandate from the people and he needs this mandate for everything he does - not just the mandate of being elected.  Even if he has a Democratic Party majority in the congress and the senate, it is hard enough for him to get things done.  Even the Democrats are hoping for these cushy jobs if they get thrown out of office.  If the old reptile ###holds sway in the senate and the congress, the president is truly stymied.  What to do.

###  This link sometimes doesn't work.  If it fails, google Bill Meher thanks Teabaggers and Sarah Palin

Also look at this message that Obama sent Xmas 2011.  This is what I mean
"Earlier this week, it looked like Congress would go home for the holidays without preventing a tax increase that would mean millions of American families would have about $40 less in each paycheck.
But then something pretty incredible happened.
It began when we asked everyone to show us how that missing $40 would affect them and their families. In a matter of hours thousands of vivid, powerful stories from Americans of all ages, all backgrounds, from every corner across the country were pouring in. For some, $40 means dinner out with a child who's home for the holidays. For others it means a tank of gas or a charitable donation. In just two days, tens of thousands of Americans were making their voices heard.
You spoke up. Your voices made all the difference.
Thanks to you, Congress reached an agreement to extend the payroll tax cut.  On top of that, vital unemployment insurance will continue for millions of Americans who are looking for work."
 

Demonstrations are good.  A good example is the demonstrations of Oct. 2011.  "The man" is taking notice of these demonstrations against corporate greed and bank bail outs.  Look at how much money the banks are contributing to the police to put down the demonstrations.  Incidentally, who's money do you think this is that they are giving to the police.  But demonstrations are not enough.  And in reply to these demonstrations, the powers-that-be are asking for specific measures that the people want.  I don't know why the demonstrators are so reluctant to get down to specifics.  What would be wrong with carrying around placards with  the following messages.

Maximum pay for a CEO 6X the lowest wage in his company


95% tax on bonuses


Banks that make the loan carry the risk


No speculation by banks


Ban derivatives.  They are gambling - not investment


Banks that speculate can not call themselves Banks


Banks invest,  They do not speculate.


If you speculate, you are not a bank


Pre-Reagen rules for banks


No more toxic mortgages


A flat tax rate for individuals and business but no loopholes

Jim Hansen's Tax and Dividend


Zero tax up to the poverty level, Flat rate above that


Clean legislation.  No attachments.

Banks.   
Stop using our money.    
To pay the police.  
To suppress our demonstration. (Four plackards marching behind one another to do this one)

How about this one.  It will really set the cat amongst the pigeons

Creating money is a sovereign right


or


Debt money created by the bank is sinking us


watch the bankers squirm with these two


see this link

and so forth. 

But what else is needed.  You must bombard your congressman and senators (two per state as I understand it) with letters and e-mails telling him what you expect him to do and how you expect him to vote on every issue.  Never make a letter more than one page.  Never be abusive.  Always get someone  you trust to read over your letter before you send it.  Give the reasons why you expect him to vote that way.  Always run your letter through spell check.  Leave it for a day at least and re-read it before sending.

And to someone out there, please put up  a web site which has an easily understood list of the voting record of your representatives.  Study it and see if he is truly representing you or if he is cow-towing to the corporatocracy.

Use blogs and social media to clearly express why you are for or against this or that policy and why.

And finally, vote with your purchasing power.  Buy from businesses that are good for America.

Saturday, October 15, 2011

Leagalize Cannabis

Do I think Cannabis is harmful??

Absolutely

If the research is anything to go on, used in large quantities it can cause psychosis.  It is often used by teenagers, just when their brain is undergoing another surge in growth similar but smaller than the post birth surge.  It is at this time that they are laying down much of the knowledge of physics, geology, biology, math, literature and so forth that will stay with them for a life time.  Instead they are mellowed out.  It is like taking a finely honed wood carving chisel and dragging the edge across a stone. The smoking of cannabis is also just as carcinogenic as tobacco.   So why do I want to legalize cannabis.

Clearly, the present system is not working.  It is resulting in a huge prison population, it is making the drug peddlers rich, it is leading to crime as people steal to get money to pay for their fix and arguably, the use of cannabis is less harmful than the use of alcohol.  Making it illegal is having many of the same effects as prohibition and we have to try something different.

What I would propose is letting out of prison anyone who's conviction was only for the use or sale of cannabis.  As they leave prison, let them take a 5kg package of confiscated cannabis with them.  If the stock of confiscated cannabis is not sufficient, buy in more.  Flood the market and trash the price.

At the same time, use all the money saved from not having these people in prison and all the money saved by the police not having to police cannabis, to fund an educational program, similar to the one on cigarettes showing the danger of cannabis.  Go all the way with this with freed up police talking about the down side of cannabis at schools and public meetings.

And all the while, make cannabis freely available so that there is absolutely no incentive for anyone to grow or sell the stuff.  I know this sounds a little crazy but the present system hasn't worked.

While we are talking about drugs, how about party pills.  If you look at any beneficial drug, it has to go through an incredibly expensive, time consuming process to prove that it is safe and effective.  Even then, some drugs come on the market that have to be recalled when unexpected side effects come to light.  Why can anyone formulate a party pill from anything he wants and sell it without similar checks.  Clearly, forcing party pill peddlers to jump through the same hoops would make it far too expensive for them to market their products.  Recently here in New Zealand a party pill came on the market that was primarily composed of bovine worming medicine!!!  Go figure?

I know there is a conflict between these two messages.  Put on restrictions - take off restrictions.  At the bottom of the whole problem is why we think we need to alter our minds with all these drugs. Life is such a blast when you are completely sober.  It boggles the mind.  In the end, I have to admit, I really don't know what the solution is.  Personally, I would hang anyone caught making or selling drugs like P and Heroine but that is not PC.  I would treat users like alcoholics.

Part, but only part of the problem is the number of people out of work and this comes down to the way governments set up regulations to do with imports, exports, taxes and so forth.  To a large extent, if we all had worthwhile jobs that gave us a good living, a lot of us would not  turn to drugs to make a crust or to help us forget our troubles.

I suspect the path we should take is to consider growers, producers and  dealers, as high end criminals, but users, sick people in need of help.

KiwiBank

A few years ago, the government started KiwiBank.  I may have my facts crossed up here but below is my understanding of how it was set up and how it operates.  My information is  from bits and pieces in the press and on the radio.  And it is brilliant.  No, I'm not being my usual sarcastic self.  It really is brilliant.

The government provided the seed capital for the bank.  I have heard that this was $200m.  The bank is therefore an SOE (State owned enterprise).  The difference between this SOE and others is that the government doesn't insist on a dividend.  KiwiBank is allowed to put her earnings back into the business.  This is the first brilliant move.  KiwiBank can grow organically by plowing her profits back into increased capitalization.

KiwiBank was set up to operate from existing post shops.  If you have gone into banks in many countries you will see that they are the most opulent of any business you are likely to visit.  Marble counter tops,  paneling of rare and expensive wood etc.  Where do you think the money came from.  You guessed it.  Higher charges to borrowers, lower interest to depositors and so forth.  Not in KiwiBank.  The shops are already there, the workers already in place and earning their crust, primarily from the post shop.  In addition, once you have set up your bank account with KiwiBank, almost everything you have to do can be done online.  Once again, very low overheads.

I'm not sure if this is still so but initially, KiwiBank didn't have any other shareholders.  This is the third brilliant aspect of  KiwiBank.  If you have shareholders, you have to give dividends.  This a stream of money leaving the bank that could better be used to decrease interest for borrowers and/or increase returns for depositors and/or  increase the capitalization of the bank.

The fourth brilliance of KiwiBank is that it is wholly owned by Kiwis.  To the best of my knowledge, all our other banks have a majority Australian ownership.  Ausi shareholders  expect a dividend, and this is a stream of money pouring out of the country.  A recent item on Nat Radio suggested that this revenue stream is around $4b.  None  of this is from KiwiBank.

All is not clear sailing, however.  There is talk (perhaps it has already happened) of selling shares in KiwiBank in order to increase its capitalization.  In other words, borrowing money.  It would be far better to grow KiwiBank organically.  As profits are made, they increase the capitalization of the bank and it can loan more money*.  I would even go so far as to say that as it grows, KiwiBank should pay back the government seed money.  This way it becomes completely independent.  It becomes a bank that can serve the needs of New Zealand and not rich shareholders and bosses with expectations of completely unjustified bonuses.  Am I worried about an uneven playing field.  Not a bit of it.  I want our KiwiBank to have an 'unfair' advantage.

*Banks must have a certain legislated level of liquidity.  In other words, they must have X amount of money in their vaults in order to be allowed to loan Y.

Saturday, October 8, 2011

New Zealand Going Under

America has finally woken up. (funny way to start a blog on New Zealand).  As of early October, 2011 she is talking about bringing back manufacturing from overseas and providing jobs for Americans.  This has nothing to do with virtue amongst the American Corporatocracy.  They haven't finally started to think about the good of the country that spawned and nurtures them.  They haven't suddenly put the good of their fellow citizens above their own highly inflated salaries and bonuses*.  No, the reason is far more prosaic although I'm sure they will try to claim the moral high ground.  The truth is that the Chinese Yuan is beginning to rise with much more 'up' inevitable in the near future and the wages of Chinese workers are rising, by latest reports, at about 15% per year.  American firms see the writing on the wall.

*Their latest ploy is to join with a small country overseas and, while staying in America physically, pay taxes overseas. Have a look at one of Elizabeth Warren's Youtubes to see a full description.

By the by, did you ever wonder what happened to that fabulous dream we had a few decades ago that we would all soon be working 30 hour weeks with 5 week annual vacations plus all the other holidays throughout the year.  What happened to the story that with automation, fabulous goods would become less and less expensive and we would all be living in the lap of luxury.  Well to some extent it came true.  Look at this fabulous invention, for instance, thanks  to Steve Jobs, that you are using to read this blog.  Look how the price has come down from it's first inception.  However, the futurists, as they usually do, forgot one part of the puzzle.  You have to have a job in order to buy things.  In a perverse way, some of us have lots of free time.  We are on welfare.  As long as our needs are modest and we have somewhere to live, all our time is our own.  If we can earn a little money under the radar we are 'sweet'.  Not a pretty picture.  But this is supposed to be a blog about New Zealand.

New Zealand is just as prone to corporate greed and government short sightedness as any country in the world.  We are always decrying our low productivity, complaining about the lack of jobs and even more so, about the lack of worthwhile jobs.  Our diaspora is somewhere around a million of our best and brightest and most enterprising people.  We wonder why our young and not so young people search for a better life overseas.  Lets look at how we are operating New Zealand Inc. and how we could operate.

Our Lumber Industry
New Zealand has the basis of a great lumber industry.  We have slightly more land than the UK and a population of 4.3 million (UK - 62m) so we have lots of land on which to plant trees............ and we have   lots of trees planted.  Our main species is the Monterrey Pine, Pinus radiata and with our fabulous growing conditions, the cycle is from 17 to 25 years.  You should see the growth rings on  our pine logs.  They are typically  a cm or two wide.  We plant them, prune them (lifts) to ensure clear, value added wood and replant as soon as the trees are cut.

 Then we send raw logs overseas!!!  Our lumber mills have closed in droves.  In the mean time, Canada is undergoing a boom in value added timber products.  Question:-Where does she sell her ply wood, milled timber and even fully made up struts?   Answer:-  To the same markets where we send our raw logs!!!   How come Canada can get it right and we can't.

Mean time, our lumber mill workers are either packing super market shelves or leaving for Australia and points North.  A skilled lumber mill worker will have a productivity, measured as the value of what he produces divided by the hours he works.  Lets call his productivity 'X'.  When he changes jobs and starts to pack super market shelves, his productivity will drop to 0.1X.  If he goes on welfare his productivity is minus 0.1X.  No wonder our productivity stats are low.  We are trashing all the high productivity  jobs.  No wonder our tax take is down.

Could this trashing of one of our primary industries be due to the nature of our much vaunted free trade agreement.  Note that when China felt herself in danger of not having enough Rare Earth Metals, her free trade agreement didn't stop her from curtailing their sale*.

* If you think this is an exaggeration, let's send a trade delegation to China to buy their REM concentrate.  We will refine it here and sell, either the refined metals or the electronic equipment made from these Rare Earth Metals. Since we have the inside track, overseas companies will be pushing and shoving to set up here in New Zealand.  Any idea what China will say when we invoke the Free Trade Agreement in order to buy her REM concentrate. I'm sure she will put it very politely.

We have just had a disastrous earthquake.  This could be and element of our salvation with respect to the lumber industry.  Let's put a major research effort into the building of wooden buildings from composite wood-epoxy beams which laugh at earthquakes.  Then let's export made up beams and other wooden building materials to other earthquake areas.  Let's not export the technology.  That is a short term gain for a long term loss.

Our Fishing Industry
Our fishing industry is another example.  We allow foreign fishing boats to fish our waters.  They must land their fish in New Zealand (at least we got that right)**.  Recently there has been a great bro ha ha (sp?) about the terrible conditions of Indonesian fishermen on Korean boats that are doing our fishing for us.  As usual we are looking at the right hand while the left hand does the trick.  Why do we allow foreign fishing boats anywhere near our fish stocks.  Does anyone think that these Korean paragons of virtue will treat our fishing stocks better than they treat their Indonesian fishermen***.  In the mean time, our people are out of work.  Out of work, on welfare, not paying taxes, not shopping at local businesses (who therefore pay less taxes) and ultimately looking for work overseas.  Once again, the same story as with our lumber industry.  People out of work, negatively productive, fleeing New Zealand, breaking up families and not paying taxes.  No wonder we have to borrow money.  We have to borrow to make up for the lost tax take and to pay welfare to the out-of-work Kiwis.

*Incidentally, much of our fishing industry is owned and operated by Iwi (Maori Tribes).  Here we have the unedifying sight of Maori bosses putting their own people out of work so that they can get higher salaries and bonuses and so that the Iwi can make larger profits. The bosses then get mana by passing on a dribble of this larges to their members.  Maori were given large concessions to fish our marine waters.  They sell these concessions to companies who aggregate them into worthwhile bundles and sell them on to foreign fishing companies.  One of the reasons for giving these concessions to the Maori was so that they would employ Maori in the fishing industry.

** I got that one wrong.  It has now been revealed that much of our fish is processed overseas.

***This same boat was later found to have dumped a hold full of our fish in order to have room for a more valuable catch she made.
  
12 June 2017  I just learned that one of our salmon farm businesses, King Salmon is Malaysian owned by a company with very a very questionable record on human rights and sustainable fisheries practices.
   

Fisheries policy - let's change tacks.
Whale Poo

Rolling Stock Manufacture
We are going back into rail and Electrified rail at that. GREAT MOVE.  We have seen what is rolling down the turnpike at our stalled car (Kiwi Inc.) and have made a very sensible decision.  Then we go and buy our rolling stock overseas despite having a local industry that is perfectly capable of manufacturing them!!!  Are we nuts*.  See:
cost-of-manufacturing-overseas

* Incidentally, a news item on National Radio sometime in Sept 2012, following the closure of yet another industry, suggested that for every  job lost in a primary industry, another 4 ancillary jobs are lost.  I have no idea if the 4:1 ratio is in the ball park but the principle is sound.  Imagine how many jobs would be created, just by producing our own rolling stock in New Zealand, not to mention all the other industries mentioned (and not mentioned) in this blog.Imagine how many spin off industries would result from us having to upgrade our manufacturing capacity to build these modern rail cars and engines.

Sale of our Land
We are at the beginning of a boom in agricultural markets overseas as other countries continue to grow their GDP, Increase their middle class,* trash their environment mine their water and send their soils downstream to the sea.  The way the world population is growing and, far more important, the way they are increasing their "standard of living", the future for an agricultural country is bright.  Then we sell our farm land to overseas interests!!!

In Asia.  On the contrary, much of the western world is trashing their middle class.

No argument about selling land to someone who wants to come here as a permanent resident, buy and operate a dairy farm, join the local volunteer fire brigade, send his kids to our schools and be part of the community.  Why, though, do we sell blocks of land to vertically integrated overseas companies that will take the profits overseas.  If they were bringing some vital technology here there might be some justification but to the contrary, In so many branches of agriculture and especially in dairy, we are the experts in the field.

The worst example of this is the recent sale of the Crafer farms.  These are a block of 10 or 12 dairy farms that the receivers peddled overseas.  They insisted on selling them as a block which pretty well eliminates individual Kiwi share milkers who want to become dairy farmers from purchasing them.  Instead they sold them to a Chinese dairy business.  Are we nuts!!!

The government has argued that this selling of our farms (and our houses) to overseas concerns does not raise the price.  The liquidators of the Crafer farms obviously thought otherwise.  If they thought they could have got more money by selling them individually to  local farmers they would have done so.  After all, they work on commission. 

Sat, June 3, 2017.  I just read in today's press that our major parking company in Christchurch is a Hong Kong company.  This is beyond a joke.

Energy Policy
I'm not going to type  all this again.  We show very little imagination or creativity.  Have a look at these links:

1.  The government, with very little expense, could make the uptake of solar electric much more financially feasible.  Panel prices are coming down and correct government action could set us well on the way to energy independence. Absolutely no subsidies needed.
Solar-electric-government-role

2.  Having solar panels is financially identical to having a pension  right now,  long before we retire.  There is a good argument for allowing access to our KiwiSaver to finance them
Kiwisaver-and-solar-panels

3.  Much nonsense has been talked about the unsuitability of renewable energy because of its intermittent nature.  This totally ignores such coming innovations such as demand balancing, electric cars, new types of batteries and smart grids. It further ignores the function of the grid to pass power from places with wind to places without and areas where the sun is shining to areas where it is not.
Excess-energy-what-to-do

4.  We mustn't fall into the German trap.  Their uptake of solar electric has been fantastic but there are fish hooks.  There is a better way.
Double-metering-its-insidious

5.  Same as "4"
German-fit-system-brilliant

6.  The steady replacement of our fossil fuel powered domestic fleet with Electrics has many benefits.  The function of government is to set the stage, not to actually do anything.  Again, no subsidies needed.
Legislation-for-electric-cars

7.  Wind farms are been shot down all over the country.  Some of the concerns may be justified, Most are pure nimbiism.  The government should sort out this mess.
Enabling-wind-farms

8.  Get real guys.  Wind energy is clean, competitive in price and highly compatible with our Hydro rich energy mix.  Let's get on with it.
Wind-energys-no-good


Our policy on Climate Change
We could be far more innovative here as well.  We must be completely selfish here and look after New Zealand.  We can't do anything of significance about world climate change ourselves.  If we stopped all our emissions of greenhouse gasses, it would have no effect on the world output.  We could:

a) set an example as we have often done in the past,
b) guard our clean green image,
c) future proof New Zealand against a likely collapse of the ecology and economy of our major trading partners and
d) reduce our financial obligation under Kyoto
global-warming-anthropogenic-or-not
forget-climate-change

Note that our lumber industry should get carbon credits, not a carbon charge.  The trees we grow are taking Carbon dioxide out of the air and because our forests are young and growing (not mature forests in which net CO2 uptake is zero) they take up a lot of carbon.  Very close to 50% of the dry weight of wood is carbon.  In-so-far as part of this wood is built into long lasting furniture and buildings it is a long term sequestration of  carbon.  Then instead of using the highly polluting lignite coal to manufacture urea, we could equally well be using all the wood waste.  This would bring more carbon credits to the lumbering industry and the ability to sell green urea.  We could even burn this wood in such a way to leave charcoal and enrich our soils, especially in the far north with it.
Urea from wood waste 
The value of Charcoal in the soil.



Carbon Tax
Our Cap and Trade policy to control our carbon emissions is designed to make the banks rich**, most of them not even Kiwi owned. Australia has just introduced a carbon tax system and the banks are lining up, rubbing their hands together vying for the business.   If much of the commentary is correct, Cap and Trade will not even be effective.   Jim Hansen has proposed a far better system called Tax and Dividend which has every chance of being effective and will protect the citizens of any country that adopts it, from the temporary increase in the price of just about everything which will be caused by switching to renewables.  Best of all, from the point of view of the political party that proposes it, it would be a real vote catcher.
Jim Hansen's climate change solution

Why are our political parties so reluctant to propose Hansen's Tax and Dividend instead of cap and trade.


**By the by, if we do insist on making the banks rich, with whatever carbon tax system we put in place or, for that matter, if we insist on the disastrous policy of selling our family silver,,,,, give both jobs to KiwiBank.  Are we really that intent on making Ausi banks rich.  Does someone (Everyone??) in government own shares in Ausi banks???  Give the job to KiwiBank who would then increase her capitalization and her ability to make loans and her revenues  would stay in New Zealand to the benefit of all. 



Our Agriculture
We could be producing green urea (sounds like an oxymoron, doesn't it?). Instead we are proposing to use our lignite which is the dirtiest form of coal.  Even worse, the company that is proposing to do this is an SOE for heaven sake!!!  A government company.  Note that Urea only contains the nutrient, Nitrogen but we could also be producing high quality whole (with all the nutrients) fertilizer for our farms at a very low cost.  We could also have truly green dairy farms. 
fertilizing-new-zealand-natural-way
wood-waste-and-urea
indoor-dairy-farms

Selling off our SOE's (state owned enterprises)
The government is now talking about selling off 49% of our State Owned Enterprises to make up for the money we are borrowing.   This is like a trucking company selling off it's trucks to make the end-of-year books look better. I have a "problem or two" with this.  It is unbelievable that she is selling off assets which are reported to return dividends of 20% (I don't believe this either) instead of borrowing money at 4%.

1) We, the citizens of New Zealand, already own these companies.  The SOE's are the property of every Kiwi.  They don't belong to the government except in the sense than every member of parliament owns just as much of them as every other Kiwi. Selling us our own SOE's is like stealing empty bottles from behind a convenience store and trying to sell them back to the owner.  (at the age of 9, I tried this, was caught and this was the end of my career in crime).  Where in the legislation does it allow these very temporary directors of Kiwi Inc. to sell off the family silver.

2).  All Kiwi's will have to pay more taxes because  of the reduced dividends coming in from these SOE's

3) Who will buy them.  Clearly Kiwi's who have some spare cash.  They will then get the dividends*.  The rich Kiwis who have bought shares will have some income to make up for the increased taxes.  Poor Kiwis will be simply out of pocket.  The bottom line.....  Money coming out of the pocket of poor Kiwis into the pockets of rich Kiwis. A typical  money-merry-go-round that we have, in the past, associated with America, not with New Zealand.

*incidentally, it is very clever on the part of government.  They sell us our own property, we get the dividends and then we pay tax at our marginal tax rate on these dividends.  The government gets a third of the dividend back even though they no longer own the shares.  Very cute.

4)  As soon as the buyers of these shares need money or when the shares have gained some value, they will sell them.  Who will buy them.  Who has lots of American dollars because of their low wages.  You guessed it.  And they don't necessarily buy up our SOE's directly.  There are front companies and front companies for front companies and......  you get the picture.  Same result.  We end up with 49% of our strategic assets owned overseas.  We end up being tenants in our own country.

5.  Apparently, shareholders which own 25% or more of a company have quite a few rights in controlling a company.  I am not familiar with the inns and outs of this situation but it would appear that owning 51% of a company does not give the control that is implied by the Key government.

KiwiSaver
And finally KiwiSaver.  It has the potential to be the most important innovation in our history (OK, that may be a little exaggerated --- but only a little).  KiwiSaver is Kiwis investing in their own economy, the dividends coming back to Kiwis to be spent in Kiwi businesses which pay taxes to the Kiwi government etc.    The benefits are far more extensive than sketched above. See:
KiwiSaver - Good for new Zealand

But it is a terrible investment....... and not to put too fine a point on it - a scam.  The poorness of the investment is obvious when you see the bribes that the government had to offer to get people to invest in it.  To provide these bribes, the government has to a)borrow more money,  b)lower services or  c)hike taxes.  The present government has done all three.  Sure, the present world economic situation has a lot to do with our economic woes but KiwiSaver bribes are a contributing factor.  Money is simply taken out of Kiwi Pockets in order to bribe other Kiwis to save.  Government debt is increased while private debt is decreased.  A zero sum game as far as our overall New Zealand debt is concerned.  No wonder our credit rating has gone down from AAA to AA.  It would be so easy to fix it.  (See the above link).  Simply stop all the government and employer contributions (another scam) and let us invest before taxes.  Go all the way and tax our real (above inflation) dividends rather than our nominal dividends.  This way KiwiSaver becomes a viable investment in its own right.

Why should the rules around KiwiSaver be different from the rules around other investments??(that is a retorical question).  Because we are asked to put a large proportion of our disposable income into an investment fund for all of our working life for the good of New Zealand.  This is not an investment such as we would make when we buy shares or a rental house and should not be treated the same way by the government.  It is not an investment that we can cash up when we decide to.  Surly we deserve a fair return on this sort of investment.  And imagine the money coming into the economy as Kiwis retire and have a decent pension fund.  Instead of being a burden, retiring Kiwis become a positive asset to the economy.

New Zealand is a great innovator.  We lead the world in so many ways but we could do so much more.