112 thoughts on “General debate, April 28, 2013

  1. Is this what we are competing with?

    “The psychotic central bankers, “bought and sold” political class, mega-corporation soulless chief executives and corporate controlled media use propaganda techniques, paid “experts”, talking head “personalities”, captured think tanks, and the willful ignorance of the majority to spin an increasingly dire economic descent as if we are recovering and getting back to normal. “

    http://www.theburningplatform.com/?p=52862

    We really need to DRAMATICALLY change the basis of our economic system.

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  2. Well, well…Look at this!

    http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10879448

    What’s your suburban dream?
    18950–19000 votes

    Apartment. 6%

    Townhouse. 7%

    Standalone three bedroom. 30%

    Lifestyle block. 33%

    I have no desire to own my own home. 3%

    I have already acquired my dream home. 21%

    ….even still, Auckland council tells everyone that Auckland wants THEIR high-density vision, even though we now know (though it’s really always been obvious) that only about 12% of the market wants to live in it.

    Oh what a pack of creeps we have in Auckland council (excluding a few good one’s, like Dick Quax).

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  3. I want an apartment mate. I don’t want a lawn to mow. I don’t want to have to drive. I don’t want to worry about my roof. I want to be able to walk to the shops and take mass transit to the library and to see the shows and go downtown for the concerts.

    That’s not the problem though. The PROBLEM is that we must (as Tony is so apt to remind us) “power down” to the extent possible. We need to remember that there are a lot of things happening and we are going to have LESS arable land in 100 years than we have now. We are, when Auckland goes partly underwater, going to wind up with North North Island and a SOUTH North Island – give it about 250 years to happen.

    You are right. People WANT those lifestyle blocks… not knowing how much work they are. “Hobby Farms” some call ‘em. They get to be a lot of work. Figure a hectare per… and work out the numbers.

    http://www.mfe.govt.nz/publications/ser/eco-footprint-sep03/html/page8.html

    Auckland’s area is some 450 thousand hectares… has a million plus people and so if you doubled its size (you can’t go east and west there) it would just about have enough for everyone to live. It’d take nigh on an hour to get from one side to the other with GOOD mass transit, and more if you use cars.

    If you count up the energy deficit that this country is running at when you leave non-CO2 generation out, we are going to have to cut back on energy use. Transport is energy use. Heating and cooling is energy use… and any arrangement of individual buildings maximizes that energy use over a single building with apartments within it. More surface area for the volume. Similar considerations for the transport of food and other goods.

    So yes, people WANT the things… but they are a pretty bad idea for the society as a whole. Sort of like it is with food. We crave the sweets and salts but they make us sick.

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  4. Len Brown, who is forcing Urban densification on Auckland, lives on a 2-acre section, and his area is apparently not targeted for intensification.

    As you can see, his heart is really in [everybody else] “saving the planet” with forced densification.

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  5. The effect of this would be that you double the distances between the stops, because area increases by the square of the distance.

    Works for Christchurch and Hamilton but not for Auckland and Wellington… as I pointed out to start with. I do not, by any stretch, imagine cities without green. NYC has central park and Moscow has green between its apartment blocks.

    You mistake the notion if you think it means NOTHING BUT apartments. It simply means using the 3 dimensions we have to work with, rather than merely 2. Auckland will more than double its population while you build this system?

    The worst part is more like the banking problem I have. You can’t GET there from here. Even if I agreed that it was 100% better than anything else figuring out a method of changing things so that it worked that way… it wouldn’t happen.

    How do you do that in place of the housing that already exists?

    I’d need to analyze the energy efficiency of your arrangement vs the efficiency of other arrangements to say yea or nay anyhow. The advantages of your transport system flow on to apartment arrangements just fine and no matter HOW efficient one makes the individual dwelling, the resource consumption per person in a collective dwelling can beat it.
    My house has 6 outside surfaces, my apartment 1 or 2.

    I am dubious that the transport system no matter HOW arranged, can do better than 2x the current efficiencies… where you are expecting 5x. I’d be happy to be wrong, but arranging things within the existing roading and building and development structure so that this alternative design can flourish is… going to be difficult.

    [[ article correction?: You say in here

    http://andrewatkin.blogspot.co.nz/2009/06/automated-transportation-network.html

    "With modern technologies, it cannot be argued that we will eventually have full-automation transport" and I think you meant to say that it can be strongly argued or that it cannot be argued that we will not...
    ]]

    Sorry – stuff like that is like a 2×4 to the back of the head. I agree with you about autonomous vehicles. That’s almost certain to come about, though I don’t know exactly what shape it winds up taking. I just don’t buy the notional “green sprawl”. Greener than current arrangements possibly, if the transport system works out perfectly and optimally, but I don’t know it will. I can’t forecast that tech well enough to design a whole society around that change. Greener than a similar more densely arranged metropolitan region with adequate parks? Unlikely. But the trees help…

    http://www.fastcoexist.com/1681799/plant-a-tree-lower-the-crime-rate

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  6. You’ve touched on it, BJ. Brown, et al, never, ever, consider whether their assumptions are valid when thinking about long term plans. Their assumptions are that economic growth will get back “on track”, that oil will continue to flow in abundance (and affordability) or some other fuel source will somehow appear and be equally as powerful and abundant, that planes will continue to fly, that the climate will be just about the same as it is now, that no-one will actually care about the environment very much and that everything will grow (except the volume of sea water).

    Mind you, even greenies take it for granted that we’ll be able to have at least as complex a society in the future, for however far ahead they want to look; they just want to do some things a little greener than now.

    Very few people do joined up thinking these days.

    By the way, I don’t think cities are sustainable (they’ve never proven to be, so far) as they need to import everything. As societies inevitably start to simplify and localise, I can’t see hundreds of thousands of people being supported in a city.

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  7. bjchip:

    I’ve only got the energy to say this: Use polystyrene-based insulation and double-glazed windows if we must. Housing insulation is not the concern. Tax for efficiencies and let the innovative market respond. They will – no problem.

    http://andrewatkin.blogspot.co.nz/2012/12/styrofoam-brick-houses.html

    Tax transport efficiencies too, if need be. People will use smaller cars. For commuters, if you put enough of an “eco-tax” on cars, they will be reduced to enclosed motorcycles if need be. get it down to 5% energy consumption. Stick a solar panel on the roof. Whatever.

    But outlaw one option over another, without letting the market find its own way to reduce energy, and kiss all your young New Zealander’s goodbye as they go to Australia…along with most of the new capital investment.

    http://andrewatkin.blogspot.co.nz/2013/04/the-remarkable-mega-cities-of-future.html

    …Oh, research has shown that per-floor area, apartment living is more energy intensive due to the need for air-conditioning and lifts, etc.

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  8. “research has shown that per-floor area…” Have you a link for this research Andrew?
    Comparing energy use ‘per-floor area’ would bias toward larger houses being more efficient.

    https://www.uvm.edu/~gundiee/pubpdfs/Shammin_2010_Ecological_Economics.pdf
    “Even though sprawlrelated factors account for about 83% of the average household energy consumption, sprawl is only 17–19% more energy intensive than compact living … some of the advantages of reduced direct energy use by people living in high density urban centers are offset by their consumption of other non-energy products … lifestyle choices (household type, number of vehicles, and family size) play a significant role in determining household energy intensity.”

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  9. BJ,

    Will the Greens come out with the plans to nationalise the banks in New Zealand?

    Surely that would be of greater benefit to New Zealand then, the poorly presented and thought out, electricity sector nationalisation plans?

    Priorities?

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  10. One thing at a time, Gerrit. Electricity is topical just now. Once the wailing and gnashing has subsided, we can look at these other issues.

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  11. No need.
    Just legislate for State banking like the communist State of North Dakota. Support Kiwibank as a State bank and local finance co-operatives.
    https://publicbanking.wordpress.com/

    If the private banks are truly more efficient than State banking they will survive in New Zealand. I suspect they won’t.

    As they are not we will end up with the same situation as North Dakota, where most of the banking is public.

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  12. Kerry says “If the private banks are truly more efficient than State banking they will survive in New Zealand. I suspect they won’t.”

    Kerry thinks they won’t survive – Yeah right.

    Aussie Banks like ANZ and Westpac have been going in New Zealand for 170 years and 150 years respectively.

    In fact ANZ (then Union Bank of Australia) was New Zealand’s first bank in 1840. Soon after there was Bank of Australia (also now ANZ) and Bank of New South Wales (now Westpac).

    Apart from being one of the oldest surviving companies in NZ, ANZ is valued at $80b, compared to $60b for the whole NZ stock market.

    And you think it won’t survive….

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  13. “Auckland council tells everyone that Auckland wants THEIR high-density vision”

    Well, I’m likely to agree that the Auckland’s council is full of spin and hypocrisy, but I don’t see the relevance of the survey quoted. Are you really suggesting we should build urban planning around what people would like to have if they could?

    By this logic, you should really set up a Michelin-starred cordon bleu restaurant in my street as me and the other residents would love to eat there two or three times a week. We won’t, because most of us can’t afford it, but we’d like to, so your hypothetical fortune based on dream dollars can well be imagined, if not made.

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  14. photonz1 – I think Kerry’s point was that after a hypothetical legislation change promoting State banking, the commercial banks might struggle to make such vast profits and remain viable.

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  15. Sam Buchanan

    Are you really suggesting we should build urban planning around what people would like to have if they could?

    To a degree I think that should govern policy… Giving people what they want in terms of space is important, because space equals potential development, reduces conflict and in many ways defines Kiwi lifestyles… There’s a calculation around somewhere to find the space required for each individual needed for happy communities. What this is all about is finding a balance between having enough space for each individual and having enough housing to accomodate everybody.

    The issue here isn’t just about what the majority wants, it’s about what is good for the economy, the environment and also what Auckland needs. Auckland doesn’t need more people living in garages because there’s a shortage of appropriate housing. At the same time, Auckland doesn’t need more urban sprawl because it’s already one of the largest cities in the world in terms of land mass. In my opinion, the answer isn’t just about more intensive housing projects either, it’s about better utilizing what’s already available. Ensuring houses don’t sit empty while families live in garages is one way to resolve the issue, but I’m unsure about how best to achieve that.

    The answer is also to do with increasing investment into smaller townships so the migration to Auckland slows. People move to Auckland because of a lack of opportunity elsewhere. Increase the opportunity for employment in townships and rural areas and the housing crisis in Auckland will be somewhat resolved. In the mean time more intensification is required to ensure there’s enough accommodation. The current size of Auckland should ensure that on average people have the space they require to be happy and aren’t living in chicken coops.

    Photonz1 can’t help but say quack!

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  16. “Giving people what they want in terms of space is important, because space equals potential development, reduces conflict and in many ways defines Kiwi lifestyles…”

    True, but there’s no point having urban planning based on what people aspire to while we have economic policies that keep most people unable to realise their aspirations (even if people actually do want a lifestyle blcok when it comes down to it).

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  17. Gregor says “I think Kerry’s point was that after a hypothetical legislation change promoting State banking, the commercial banks might struggle to make such vast profits and remain viable.”

    The dilemma is that when a bank – ANY bank, public or private – has low margins, it gets rated as a higher risk, and will often have to erode those margins even further to continue to attract capital.

    The government can’t afford to guarantee even a small bank like Kiwibank (which incidentally got downgraded last year as it wasn’t particularly profitable).

    It’s actually vitally important that banks make reasonable profits. And for several years profits of the big four banks have been hovering around 5%.

    That seems reasonable. The best thing to do is have the government own part of the banks via NZ Super Fund and ACC, and have New Zealanders own them thought Kiwisaver funds, and private shareholdings – which is all happening. We just need to encourage MORE investment in shares so it happens more.

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  18. It’s actually vitally important that banks make reasonable profits. And for several years profits of the big four banks have been hovering around 5%. That seems reasonable.

    Good point – assuming no change to the status quo of course.

    I don’t have a huge problem with banks making reasonable profits. What I have a major issue with is them not paying territorial taxes on those profits.

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  19. Gregor says “I don’t have a huge problem with banks making reasonable profits. What I have a major issue with is them not paying territorial taxes on those profits.”

    I agree. They should pay tax where they make profits, along with google, facebook etc.

    Then what about Amazon, Ebay, Paypal etc, who may make significant profits from NZ but may not have any offices here?

    Those cases are more problematic with no easy answers. The Banks are a breeze compared to that, and mainly pay their taxes are far as I’m aware, though in the past have tried to get away with whatever they think they legally can.

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  20. I read your link Andrew Atkin. A few things though… First you say urban sprawl isn’t bad, but then you say that it increases fuel costs by 20%. Where on earth did you get that figure from, and isn’t increased fuel costs actually a bad thing, especially considering we have to import half our petrol already?

    You then say there would be a stop and go system for transportation, but don’t seem to comprehend the enormous cost of implementing such a system. The government is already dragging its heals over a simple central rail loop for Auckland, even though it has widespread economic benefits.

    Then you think that the answer to using less electricity is to increase its cost FFS! Are you for real? We already have families who are energy poor. They cannot heat their homes, let alone pay for all the efficiency gains you envision on houses they usually don’t own.

    Then you claim that; “rational price pressures will naturally drive housing and lifestyle design”. If that was the case, it would be happening now. There are no “rational price pressures” to ensure we have enough housing or the right type of housing for everybody, and such free market dogma as you profess is already a proven failure!

    There’s one thing I agree with you about though, that people who grow up in Nature have a closer affinity with it. However you don’t need more urban sprawl with a fake “environmental” sign above it to achieve such an affinity. We just need to protect what we already have and ensure everybody has a chance to enjoy it.

    I think your plans have some merit, if we had unlimited funds and were starting from scratch. But we’re not, and increasing urban sprawl is clearly not the answer.

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  21. The dilemma is that when a bank – ANY bank, public or private – has low margins, it gets rated as a higher risk, and will often have to erode those margins even further to continue to attract capital.

    ?

    http://www.motherjones.com/mojo/2009/03/how-nation%E2%80%99s-only-state-owned-bank-became-envy-wall-street

    A public bank, that is one explicitly backed by the taxation and even the sovereign issuing power of the state, can have “high risk”? I think only to other banks.

    There’s a reason the bankers fear this sort of move…

    …moreover, this isn’t just about the bank’s official profits. Try to remember that the top six banks in the US now own (in the US) the equivalent of 60% of the US GDP. Try to remember that their profits are, and trading is, manipulated specifically to remove taxable income from the view of the tax collector.

    It is really quite naive to think that the banks are only making “5%”.

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  22. bj says “It is really quite naive to think that the banks are only making “5%”.”

    If you are an owner, that’s what you make in dividends.

    Hopefully if the banks grow, you’ll also get some capital gain, but the likes of ANZ and Westpac have only this year caught up on where they were 6 years ago.

    Meaning they still need to go up another 16% to cover inflation, just to get back to where they were in 2007.

    If they are so profitable you should buy shares.

    Then you’d soon find out banks give relatively low return compared to other companies.

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  23. Photonz, oh naive one. Nobody said anything about the shareholders suckers benefitting.

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  24. “relatively low return compared to other companies”.

    After you just gave an example of a bank which was presumably worth zero when it started and now worth more than, how many billions? 80 you said??

    A good capital gain is it not.

    Dividends are not the only income from shares.

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  25. bj says “Photonz, oh naive one. Nobody said anything about the shareholders suckers benefitting.’

    Oooohhhh!!! – a big conspiracy. How exciting for you. The big institutional owners are all suckers. Yeah right.

    Kerry says “Dividends are not the only income from shares.”

    Duh !! State the blatantly obvious.

    Kerry says “After you just gave an example of a bank which was presumably worth zero when it started ”

    Following a statement which is blatantly silly.

    Every business I know starts with a large injection of capital. And most, particularly those with high growth, usually have regular injections of capital along the way.

    For example ANZ regularly attracts new capital investment in share issues, i.e. at least $1.6 billion in 2008, $2.5 billion in 2009,

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  26. Kerry says “Photo, as usual, only gives half the story.”

    Wrong – I’d already discussed capital growth AND dividends.

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  27. greenfly has a big long whinge about personal attacks instead of substantive comment, then does exactly what he complains about (for the 1000th time).

    In the meantime ANZ announces it’s profit and will be paying a 2.4% dividend for 1H13, leaving a further 1% to reinvest. See
    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10880623

    Can anybody tell me which bank is making “vast profits” – I want to invest.

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  28. BJ – solar dishes would work well in many parts of Australia, but not so well in New Zealand. Because they concentrate the sun’s direct rays, they can’t make use of scattered radiation from clouds and haze and therefore will not be as effective in regions with a significant cloud cover – such as much of New Zealand – the land of the long white cloud.

    Trevor.

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  29. Sorry Photonz…. I am simply observing the real world. Something that you avoid like the plague.

    The ability to detect/understand when someone is conning you is not a strong NZ trait. Just how much dirt are you actually capable of ignoring? Taibbi makes the point well. Too big to Jail, Too big to Fail… they run governments and own just about everything… and you think they are HONEST? You are simply too trusting. Seriously too trusting. A lot of New Zealanders are.

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  30. Banks are not making big profits eh! Photo?

    http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=10880655
    “The banksters like to say that they are not earning extraordinary profits but the (admittedly) simplistic analysis below suggests otherwise. Look at 10 year sharemarket returns. The numbers for Westpac, ANZ and CBA are 14.5 per cent pa, 12.0 per cent pa and 17.4 per cent pa respectively. In the same period the Australian stockmarket ex resources has returned 9.7 per cent pa. If we look at what returns the four major Australian banks are achieving on their capital invested their return on equity is around 15 per cent to 16 per cent which is well ahead of that of major NZ companies like Fletcher Building and Fonterra.”

    Though, profits or not, what service does the finance industry provide that it deserves such a large, ever increasing, share of our GDP?

    It was supposed to be trust which justified banks profits. Joke!

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  31. Kerry quotes a story “The banksters like to say that they are not earning extraordinary profits but the (admittedly) simplistic analysis below suggests otherwise.”

    There’s a clue there Kerry… “the (admittedly) simplistic analysis”.

    “Simplistic” because it ignores huge factors like –
    – ten years of inflation
    – most of the growth comes from the billions and billions of dollars of NEW capital that investors add to banks every year.

    For example in ANZs half year announcement yesterday, they will pay a dividend of 2.5% and keep the remaining 1% to reinvest.

    They have grown a lot (i.e. by buying National Bank, expanding into Asia, etc), which was funded with billions in new investment money from new rights issues.

    If banks were making anything like the long term percentage you claim, I’d have a hell of a lot more shares in them than I do now.

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  32. Photo. Obviously you like it simple.
    If I have a rental house and make $3000 in rent on it, (after expenses of course) put $1500 towards buying a new rental house (Expansion) and take $1500 (dividends). I have still made $3000. Except in RWNJ world.

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  33. kerry says “If I have a rental house and make $3000 in rent on it, (after expenses of course) put $1500 towards buying a new rental house (Expansion) and take $1500 (dividends). I have still made $3000. Except in RWNJ world.”

    You should learn basic business accounting Kerry.

    Whether you spend half you profit on other assets or spend it at the pub, it’s still counted as $3000 profit – not $1500.

    I recently spent $50,000 on new equipment. That money is taxed as if it’s profit in my pocket, and I can only claim it back as the equipment depreciates and loses value.

    If I buy assets for my business, as I often do, likewise, they are paid for with TAX PAID PROFITS – they are not claimable as an expense.

    You claim you used to run your own business. That seems unlikely, because if you did, you’d know all this.

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  34. When I spent retained earnings back in my business they either increased my working assets/tools and the amount of work I could do and/or increased my customer base. Either increased both my income, the value of the business and my share of the market.

    Doesn’t it work that way, in your business, Photo?

    Of course i was doing something useful, building, so I was also contributing to the greater good in relation to my earnings, adding to New Zealanders tangible assets, not speculating in pushing up the costs of assets that were paid for long ago.

    What banks have done is taken a far greater share of the economy than is justified by any contribution they make.
    In the UK they cost 7 times more from the economy than they earn.

    I wonder what the multiplier is here?

    15.8 billion plus leaves NZ in interest and profits every year.

    What were the net earnings from agriculture again?

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  35. When I spent retained earnings back in my business they either increased my working assets/tools and the amount of work I could do and/or increased my customer base. Either increased both my income, the value of the business and my share of the market.

    Doesn’t it work that way, in your business, Photo?

    Of course i was doing something useful, building, so I was also contributing to the greater good in relation to my earnings, adding to New Zealanders tangible assets, not speculating in pushing up the costs of assets that were paid for long ago.

    What banks have done is taken a far greater share of the economy than is justified by any contribution they make.
    In the UK they cost 7 times more from the economy than they earn.

    I wonder what the multiplier is here?

    15.8 billion plus leaves NZ in interest and profits every year.

    What were the net earnings from agriculture again?

    From your famous FTA with China?

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  36. Kerry says “When I spent retained earnings back in my business they either increased my working assets/tools and the amount of work I could do and/or increased my customer base.”

    Which is exactly what you’re doing with the banks – counting the profit twice.

    If I make a million dollars after tax profit and buy assets with it (which increases my businesses value, you’re counting the million first as my profit, then you’re counting it a second time as a capital gain.

    No wonder your confused about their profits when you’re counting it twice.

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  37. More bullshit from Photo.

    $1500 retained income used in increasing the business value (Capital gains) + $1500 in immediate income still equals $3000 income.

    Try getting the IRD to agree you are counting it twice.

    The only difference is on one you get taxed immediately, the other you get taxed when you make the gains.

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  38. Far from getting taxed twice their are many ways an international company, like a bank, can use accounting tricks/tax avoidance (legal unfortunately) to avoid tax on the second $1500.

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  39. $1500 retained earnings plus $1500 increase in the value of a firm most certainly does not add up to $3000 income. The original $1500 has not been received because it was retained by the the firm. The extra $1500 that might be obtained by selling the firm is simply a recovery of the original $1500.

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  40. Kerry/photonz1 – aren’t you guys essentially arguing the same point?

    Kerry – From your example, $3000 profit (after tax) is $3000 profit. It doesn’t matter what you do with it after that point. Disburse or reinvest, the tax is paid. Photonz1 agrees with you on this point.

    Generally though, a business would make investments in plant and equipment from revenues not profits.

    If you do reinvest half of that profit, it might generate additional profit (one would hope so anyway) and that will be taxed accordingly. Also, the asset value of your business should increase by that amount. This is not taxed directly as it is assumed that its PRODUCT is taxed, but generally this reinvestment will be depreciated.

    Maintenance of that reinvestment (assuming that it is plant) is a expense (pre tax) so coming out before your revenue as an operational cost, before your new taxable profits are determined.

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  41. Mikesh. Failed reading comprehension along with Photo.

    $1500 retained earnings which add $1500 to the value of the firm. plus $1500 taken as earning straight away equals $3000 in earnings.

    $1500 income taken as, say, drawings. Plus $1500 income deferred by adding to the business value. Which is, if you have done it right $1500 extra income when you sell the firm. (If I spend $1500 on a business expense I bloody well expect it to add at least $1500 in value). Still $3000 total income.

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  42. “Generally though, a business would make investments in plant and equipment from revenues not profits.”

    Just thinking about this for a second, it’s more likely in fact that you would might take a loan to invest in plant which appears on your books as increased asset value, and you service the interest on that loan which is a pre-tax expense.

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  43. Revenue, gross income, income. Money wot comes in you can use for drawings, dividends or retain for investment.

    Was trying to make it simple for Photo.

    Got to remember also accounting profit is a fiction adjusted for tax purposes. That is why cashflow is equally if not more important.

    We are getting off the point a bit. Which is the amount of money the banks, especially offshore ones, remove from the economy for what they do.
    The effect on our economy is the same whether they use it as retained earnings, Australian staff wages, dividends or profits. It is still gone.

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  44. Kerry – if I make $3000 profit on rentals, keep $1500 and invest $1500 on a new investment, the IRD will still tax me on my $3000 profit – not on $1500.

    Get that?

    Even if I spend $1500 on another asset, I still get taxed on my profit – the WHOLE $3000.

    Which is why it is not a capital gain – it is merely spending your profit on an asset.

    You want to count it as profit twice. That would be like taxing your wages, then taxing it again because your bank balance has gone up.

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  45. Metiria Turei uses her vast business experience to lecture business that they will be better off under the Greens/Labour power policy.

    Which shows just how completely ignorant the Greens are of the largest financial ramifications of their policy, and understand nothing of business and finance past the utterly simplistic notion of lower power prices.

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  46. Metiria’s letter in response to the ridiculous self-serving pap from Phil O’Reily was most excellent and showed how strong the Greens now are. No fading flowers, Mrs Turei and Dr Norman! No, they are taking it to this corrupt Government and slamming them good. The Greens are major players now and are behaving like winners. Well done.

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  47. Greenfly says “No fading flowers, Mrs Turei and Dr Norman!”

    You mean the Dr Norman who ducked for cover, threw the “policy” like a hot potato onto Gareth, who threw it to Clint who batted it back, Gareth juggled very badly for a bit, then threw it to Metiria and hid.

    Similarly Shearer made the big announcement then scarpered to Europe passing the bag of dog crap to Grant Robertson to threw it to David Parker. He threw it back to Robertson again, who has just as quickly passed it back to Parker.

    And the big announcers of the “policy”, Shearer and Norman, are both still underground and have both barely said a word about it since the announcement of what everyone can plainly see is an attempt at economic sabotage, dressed up in drag as a policy.

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  48. What a whiner you are, photonz1. You snivel around Frogblog attacking each and every post in your nasty way (“passing the bag of dog crap” – what an unpleasant person you are).
    And you are wrong on almost every count, especially when you fail to understand what posters like myself mean, for example, where I say, “No fading flowers, Mrs Turei and Dr Norman”, I mean, “No fading flowers, Mrs Turei and Dr Norman”. Your bitter and twisted interpretation is evidence of your inability to understand what the people who don’t live inside of your head, are saying.

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  49. Oooh greenfly – another personal attack. What a surprise after you rant on about how awful personal attacks are.

    If this policy is so great, why did Norman and Shearer announce it, then been in hiding ever since from all the questions that were asked about it?

    Why has it been passed from person to person to person?

    Why won’t they answer where the money will come from?

    Why won’t they answer what a “reasonable profit” is?

    After the total failure by Greens and Labour to answer the questions, they then complain that business doesn’t understand their “policy”. Unbelievable.

    The problem for Greens and Labour is business has seen straight through their hastily thought up sabotage/ policy, and they’ve got no idea of how to withdraw it without looking stupid.

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  50. How it upsets you, photonz1, that Dr Norman and Mr Shearer are keeping their own counsel for the moment and not joining the yabbering from the likes of Phil O’Really? The leaders of the Green and Labour parties are calling the shots here, and it infuriates you and Mr O’Really? and that’s what I call “smart politics”. Rant and rave as much as you like, photonz1. Dr Norman will speak to you when he is good and ready. Mr Shearer might too, if you are a good boy.

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  51. greenfly says “Dr Norman and Mr Shearer are keeping their own counsel”

    That’s very funny. Anyone else would call it hiding and avoiding questions.

    How quaint- “keeping their own counsel”

    Keep passing that hot potato until you figure out how to get rid of it.

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  52. greenfly – two weeks ago you were crowing loudly about National down 4% and Labour Greens up 1.5% in the Roy Morgan Poll.

    What do you think of the latest Roy Morgan Poll where National is up 6% and Labour Greens are down 6.5%?

    Can you see why I say polls half way though an election cycle are meaningless?

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  53. The polls, meaningless, you say?
    Then why do you cite them?

    Strange man.

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  54. So much for this power plan, then. Looks like it’s gone down like a pork sausage at a vegans convention.

    No wonder Russ hasn’t been heard from on the subject since.

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  55. You wish. It’s in the public imagination, growing, growing.
    You’ll learn to love it, Arana. PMs Russel Norman and Metiria Turei will help you through the transition from malcontent-Lib to loving Green.

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  56. They will need a great deal of imagination.

    Russel Norman and Metiria Turei will help you through the transition from malcontent-Lib to loving Green.

    The chances of that are about as high as you becoming an oil baron.

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  57. Metiria Turei uses her vast business experience to lecture business

    I did chuckle.

    Like a fish n’ chip vendor trying to tell Gordon Ramsey how to cook. The response will likely be similar…

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  58. greenfly asks “The polls, meaningless, you say? Then why do you cite them?”

    Just pointing out the foolishness of an idiot who thought a poll 18 months out, meant the next election result was a foregone conclusion.

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  59. greenfly – why do you think Norman and Shearer are “keeping their own council”?

    Could it be because they know reason behind the huge 6.5% slump in Green/Labour ratings in just last two weeks (and a massive 6% rise in National’s).

    What news, I wonder, in the last two weeks, could cause such an unprecedented, against the trend shift in polls, in just two weeks?

    Now, back to the conundrum – how to dump the policy without looking stupid.

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  60. how to dump the policy without looking stupid

    Bit late for that – it’s a long run to the election, and this turkey will endure :)

    Labour have got an out – they can replace their leader. The Greens often propose outlandish policy ideas, so I don’t think it will affect their base.

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  61. “No liability, and no compensation unless forced to by the courts. (“We think its appropriate, we think its right….”) This is the kind of corporate creature that the Key government has invited to exploit our deepwater oil deposits” –

    http://werewolf.co.nz/2013/05/risky-business/

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  62. Arana – the problem with the Greens plan is the poor save the LEAST and the rich and business save the MOST.

    The Greens would be better using some of the SOE dividends and setting up a small fund to give say $100 a month to the 20% of poorest families for the three coldest months.

    That way the poorest would save MORE than under the Greens/Labour plan. Worth saying again – the poor would save MORE than under the Greens/Labour plan.

    The cost would be $100 x 3 months x 340,000 households = $102m.

    That way the poor would be better off, two million Kiwisavers would be happy, it would continue to make sense to invest in NZ rather than internationally, and the govt would continue to get hundreds of millions in tax, gst and dividends that they would have lost under the Green scheme.

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  63. That way the poorest would save MORE than under the Greens/Labour plan. Worth saying again – the poor would save MORE than under the Greens/Labour plan.

    Reason has no place in this, photonz1 :)

    As we all know, magic Unicorn money can be conjured up from pixie dust and handed to the poor, and then they won’t be poor. It’s really quite simple when you don’t think so hard.

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  64. photonz1 said: “greenfly – why do you think Norman and Shearer are “keeping their own council”?”

    I don’t. I think they are keeping their own counsel.

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  65. greenfly, sorry I misspelled counsel – it should have been spelled – h i d i n g.

    And why wouldn’t they distance themselves as much as possible from such a nutty policy when there’s been a unprecedented 6 point swing away from Labour/Greens to National in just two weeks.

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  66. They are keeping their own counsel knowing that while they do, frantic capitalists like yourself will exhaust yourselves fizzing and popping like spittle on a hot-plate, allowing them the enjoyment of that spectacle and time to re-enter the debate on their respective returns with the statesman-like assurance and grace that befits them. This will contrast nicely in the public’s eyes with the wild-eyed panic and windmill-like arm-flailing that Key, Joyce and your poorly-spelling self indulged in. It’s a sound plan. No wonder you are upset by their strategy, photonz1. It makes you look prone to tizzing.

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  67. Greenfly – you rant above can be translated into one word – “hiding”.

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  68. “you rant”? Your spelling skill-level can be translated into one word – lacking.

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  69. greenfly – wow – that’s very anally retentive over a simple typo.

    Labour and the Greens are working away behind the scenes frantically working out how to backtrack, not helped by others going in the opposite direction loudly proclaiming it’s a great idea.

    Keep it up. The more you promote the nutty idea, the more damage you do yourself when you have to retract.

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  70. Photonz1 says: “Labour and the Greens are working away behind the scenes frantically working out how to backtrack”
    You know this how?
    Or perhaps you are just blowing smoke out your *rse.
    Show us the money, son.

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  71. greenfly says “You know this how? Or perhaps you are just blowing smoke out your *rse. Show us the money, son.”

    Believe what you want greenfly. If you want to cause more damage by pushing the policy when your leaders are are going “oh sh!t, how do we backtrack from this?”, that’s up to you.

    Polls were trending positively for Greens and Labour, and in just two weeks there’s been an unheard of 6% reverse swing towards National and a 6.5% reverse swing against Labour/Greens.

    You really think that’s for no reason??? Really????

    Greens have just said they’ll put in place a policy that will
    – screw 2 million workers in Kiwisaver (i.e. nearly ALL workers),
    – chase investment away from NZ
    – cost the govt billions in assets
    – cost the govt hundreds of millions in annual dividiends
    – cost the govt hundreds of millions in company tax
    – cost the govt a hundred million in gst
    – mean either massive govt service cuts or tax increases
    – screw private companies like Trustpower who have spent 100 years building up generation assets
    – screw ALL the ratepayers of Auckland, Tauranga, Christchurch and Dunedin, by much more than they will ever save in your power scheme.

    Next time you bring out a sabotage scheme dressed in drag as a policy, spend more than one late evening making it up.

    Then you might actually have time to think of the huge number of ramifications that you’ve missed.

    And not make NZ think you’re a party that’s totally unsuitable to be part of government.

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  72. So you don’t know. Yours was all blow.

    Love your reliance on those polls you decried earlier, “Only a fool…”

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  73. - screw 2 million workers in Kiwisaver (i.e. nearly ALL workers)

    Kiwisaver is not obliged to buy shares in these companies. So you are making stuff up again.

    – chase investment away from NZ

    Private ownership of assets that belong to ALL New Zealanders is wrong. The high NZ dollar and lack of NZ production outside the milkshed industries is a result of the misguided efforts of you and your fellow free-market fundamentalist fools.

    – cost the govt billions in assets

    The GOVERNMENT does not OWN these assets. The people of New Zealand own them.

    – cost the govt hundreds of millions in annual dividends

    Giving money back to people rather than using the market to levy a surreptitious tax will indeed cost “the government”, but it will make the society healthier.

    – cost the govt hundreds of millions in company tax

    Same as above. You are using a surreptitious tax on all New Zealander’s use of power.

    – cost the govt a hundred million in gst

    Same argument in a different dress. You need to find a new one mate. This is getting OLD.

    – mean either massive govt service cuts or tax increases

    Yes. Tax increases. Out where they can be seen for what they are. Applied to the people who can and should ACTUALLY be paying taxes.

    – screw private companies like Trustpower who have spent 100 years building up generation assets

    On THIS there is a potential issue. There are very few such arrangements in New Zealand, and something in the policy might be adjusted to accommodate them. We’re down into the fine print now Photonz, and this was never about the fine print.

    – screw ALL the ratepayers of Auckland, Tauranga, Christchurch and Dunedin, by much more than they will ever save in your power scheme.

    You will have to explain this because I don’t have time to find what the heck you’re on about up there.

    In short, you are violently opposed to honesty in government (transparency in taxation), New Zealand as a sovereign nation rather than a corporate entity, and the well-being of all New Zealanders over the few who are poised to make money from owning stuff that they should never be sold and the foreigners who are poised to do the same.

    We understand that Photonz. It is disgusting and wrong and “right wing” but we DO understand it.

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  74. Photo. You forgot all your second sons will die and the sky will fall.

    Note that none of your adverse effects would even be possible if the power companies were not privatised, and they had not been overvalued because of excessive profits. (Using overvaluations to hide them).

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  75. Greenfly says “Love your reliance on those polls you decried earlier, “Only a fool…””

    I notice you don’t actually complete what I said.

    Saying the election is a foregone conclusion from a poll 18 months out is idiotic.

    Seeing big swings on the weeks news give a good indication on what people think of the Labour/Greens sabotage.

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  76. BJ says “Kiwisaver is not obliged to buy shares in these companies. So you are making stuff up again. ”

    They ALREADY own power companies.

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  77. Starting to see the problem with privatisation of power, at last, Photo?

    Makes the actions necessary to stop one, oligopoly in essential infrastructure, from burgling the rest of us, more difficult.

    Of course, that was no doubt the thieves intention. Give a lot of people a tiny share in the theft while the so they don’t stop the big players from taking wealth.

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  78. “Of course, that was no doubt the thieves intention. Give a lot of people a tiny share in the theft while the so they don’t stop the big players from taking wealth.”

    Bloody edit function.

    Getting super funds to invest is tactical on the part of the thieves. It makes it harder to reverse the theft, and all it cost them is a very minor share to others.

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  79. BJ – your argument effectively comes down the you want power savings in your pocket, and you want that paid for by someone else paying extra tax – anyone else, as long as it’s not you.

    BJ says “You will have to explain this …”

    Councils and Trusts in many main cities (including Auckland, Tauranga, Christchurch and Dunedin) own or own shares in generation companies like Trustpower snd lines companies and distribute the money to households via rebates so rates are lower.

    For households in these cities their rates are $300-$400 lower because their rates are subsidised from earnings from power companies. The Labour Greens plan will destroy a lot of that subsidy and the value of each city’s assets.

    And you have still failed to explain how the Greens will save $750 million when the total after tax profit for power companies last year was $488 million.

    What are they going to do? Magic up an extra quarter billion from somewhere?

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  80. Photo. How come, you Mathew Hooten and all the other RWNJ apologists on the blogesphere say exactly the same things at the same time? Are you not allowed to deviate from the script?

    Crosby Textor to bloggers, “do not engage with reality, just keep repeating these words, nutty, economic sabotage and it will cost money, endlessly until people believe it”.

    Photo. Do you and Arana talk in RWNJ slogans/memes at home to?

    The strength of the reaction to this from the usual suspects shows they reckon it will hit them in the pocket.
    The gravy train of private takovers of tax payer assets, followed by stripping profits out, may be ending.

    In which case we should all cheer.

    Again we have the usual RW cognitive dissonance and self interest.
    The same people that reckon exporters need low wages to compete, now claim that artificially high power prices are not a problem.

    How much is a dairy farm power bill again? I know in at least some it is higher than wages.

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  81. Photo. We already know that power profits are a fiction.

    Where did all those extra billions power companies extracted from the economy come from?

    Stop flogging the dead horse.

    It has already been shown that paper profits are decreased by excessive valuations. A self perpetuating roundabout. Expectations of higher takings make valuations higher which makes profit seem less.

    There was a very good academic paper and several studies on this not long ago.

    Then there is the incentive for private companies, like Toll did to run down the infrastructure, borrow against it and take the maximum money out, knowing we have to either bail it out to keep it running, like Air NZ, railways, or subsidise it to invest in needed upgrades, like Telecoms.

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  82. Magic up an extra quarter billion from somewhere?

    I understand that is Norman’s QE plan, yes.

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  83. “$300-$400 lower because their rates are subsidised from earnings from power companies”

    And the RWNJ intention to privatise these as well will cost us a lot more.

    You are putting up some good arguments against privatisation, Photo.

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  84. “I understand that is Norman’s QE plan, yes.”

    As opposed to paying the banks 5% to give us some of the money the US Government magicked up from nowhere?

    Arana. Don’t you know where money comes from. It is all “magicked up from nowhere” as a token for work/resources.

    The money supply was originally expanded by banks, “magicked up from nowhere” because there wasn’t enough gold to allow the amount of economic activity and transactions occurring. Hence banknotes.

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  85. Kerry – there is actually something you said that I totally agree with – “Bloody edit function. ”

    However, Kerry says “Getting super funds to invest is tactical on the part of the thieves.” which is nonsense.

    The Super Fund, Kiwisaver, ACC, and private super and investment schemes have ALWAYS gone for the largest blue chip stocks with regular defensive earnings – they’ve been doing that since they started.

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  86. Kerry says “And the RWNJ intention to privatise these as well will cost us a lot more.”

    Best to put brain in gear Kerry.

    How can the government privatise companies that it doesn’t own, and has never owned since they started building generation and lines a century ago.

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  87. Aw Come on. The whole Auckland city amalgamation was designed so the private/corporate sector could get their greedy paws on council assets.

    And why National is starving Auckland of funds now. Revenge for voting against the privateers.

    And, where I live, we have to repeatedly stave off attempts by the privitisation maniacs to get their grubby paws on Northpower

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  88. Kerry says “It has already been shown that paper profits are decreased by excessive valuations”

    The average 4.8% after tax profit for the big five power companies last year is the percentage of their sales – so that makes no difference if the company is valued at $10 or $10 billion.

    That’s the silly thing about the Greens/Labour policy. They claim they’ll save consumers 10% on power when the companies currently only make 5% on power – yet they say they’ll still allow the companies to make a reasonable profit.

    You don’t have to have any more than primary school maths to see that doesn’t work.

    Which explains why they’ve failed to answer questions on where the savings will come from.

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  89. “Green policy is silly.”
    “Green MPs can’t do primary school maths.”

    (Extracts from photonz1’s Little Blue Song-sheet – I know, the lyrics aren’t very sophisticated but you see with Key and his sieve-like memory what happens when you have to try to remember complicated stuff. Like what one thought of the Springbok tour for example. How many Transrail shares etc. etc)

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  90. Photonz1 – it is worth noting that the upward trend in the valuation of kwh power over the last decade or so in considerable part been based on a positive revaluation of generation assets. It’s certainly been justified that way to the regulating authority, the logic being:

    ‘These valuable generation facilities are expensive to run and even more expensive to replace. We need to inflate prices to cover our costs of maintenance and reinvestment, calculated as a proportion of the asset portfolio value.’

    Ergo, the higher the portfolio value, the more can be charged per unit as a minimum to the wholesale market. Hence the rapid, across the board revaluation of generation assets.

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  91. greenfly says ““Green MPs can’t do primary school maths.”

    If they can do primary school maths, they’d be able to explain how to get $750 million savings out of $488 million profit.

    But it’s been a big Green failure to explain where the savings are coming from.

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  92. Of course valuations have nothing to do with taxable profits? Eh Photo.

    Photo now forgets about the effect of such things as depreciation, borrowing and asset values, on taxable profits.

    After prattling about it over the last few days.

    Which is affected by valuations of capital assets.

    Thought you ran a business, Photo?

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  93. Gregor says “Ergo, the higher the portfolio value,…”

    What do you think is going to happen to the portfolio value when the generators have spent NINE BILLION DOLLARS in new investment in recent years.

    Do you think wind farms and geothermal construct themselves for free?

    When they spend $9 billion, do you not think their value should go up by $9 billion?

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  94. Kerry thinks the generation asset values have gone up because of dodgy accounting, while ignoring the fact that $9 billion has been spent on new generation projects.

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  95. photonz1 – your numbers are a bit off.

    Research by Geoff Bertram based on Ernst & Youngs numbers as reported by the Herald 3/2/13:

    “A profitability analysis of Meridian, Genesis and Mighty River conducted by Ernst and Young in 2011 estimated that economic profit totalled $3.8 billion between 2002 and 2011, on total revenues of $42 billion.

    Their invested capital rose from $4 billion in 2002 to nearly $12 billion in 2011 but most of this increase – $6.2 billion, according to the companies’ annual reports – was asset revaluations, with less than $2 billion representing the historic cost of net actual investment.

    Those increases in asset values went untaxed but made their returns on investment look low, which justified price hikes, he said. Genesis did not want to comment on the revaluations and Mighty River said it was a question for the Electricity Authority.”

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  96. Gregor – it was in the paper about a week ago that the five companies between them had invested $9 billion between them in recent years.

    Contact’s CEO said they had invested $2.5 billion in the last five years.

    Regardless of if they are valued at $12 billion or $120 billion, or 2 cents, the profit margin on the sale of electricity was just 4.8% last year ($9500m of electricity sold for $488m after tax profit from the big five).

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  97. For households in these cities their rates are $300-$400 lower because their rates are subsidised from earnings from power companies.

    Right… so here is a surreptitious tax levied on electricity users to subsidize people who own houses.

    The rights of people with money over the rights of everyone else.

    The wingnut version of fair.

    Shares were sold to Kiwisaver in spite that there was no public float?

    Photonz, I already PAY taxes. At a higher effective rate than people with twice my income. I own a house… but I do not, I ABSOLUTELY do not, want the state looking for “profits” with which to fund its operations. It is NOT a business. It should not be thought about as a business.

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  98. BJ says “Right… so here is a surreptitious tax levied on electricity users to subsidize people who own houses.”

    You almost got it right BJ – it subsidises people who LIVE in houses

    (landlords would have to put rents up if their rates went up)

    BJ says “Photonz, I already PAY taxes. At a higher effective rate than people with twice my income.”

    That’s what people who pay less in tax, than services they receive from the government, say to make themselves feel better about freeloading.

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  99. photonz1 – that may be so but look again at the 2nd para I posted

    “Their invested capital rose from $4 billion in 2002 to nearly $12 billion in 2011 but most of this increase – $6.2 billion, according to the companies’ annual reports – was asset revaluations, with less than $2 billion representing the historic cost of net actual investment.”

    Regardless of if they are valued at $12 billion or $120 billion, or 2 cents, the profit margin on the sale of electricity was just 4.8% last year

    And para 3:

    “Those increases in asset values went untaxed but made their returns on investment look low, which justified price hikes, he said. Genesis did not want to comment on the revaluations and Mighty River said it was a question for the Electricity Authority.”

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  100. Gregor – the same article you are quoting makes the absurd claims that Australian’s only pays 14c/kw – which is total nonsense (it’s double that).

    I’d also question the claim that only $2b was invested in new generation by 3 main companies over a whole decade (Genesis had $1b of new investment in just their 2004 annual report).

    In addition most of our wind farm were built in that decade, Mighty River spent nearly half a billion on just one geothermal plant, Manapouri has a major upgrade, new gas peaker plants were built, Meridian was spending hundreds of millions per year in captital investment, and there was hundreds of millions in investment in overseas generation as well.

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