More warning on danger of LabourGreen power play

01/11/2013

Meridian Energy’s partial float was given an initial thumbs up by analysts but they warn the share price is likely to be volatile heading into next year’s general election.

One fund manager said the difference in share price between Labour and National could be as much as 90 cents. . . 

Analysts agreed that day one of the float was successful and the closing share price was in line with expectations.

Devon Funds Management equity analyst Phillip Anderson said new investors would be pleased. “It’s enough for the new investors to be happy – they are feeling good about it – but not so much that it looks like the seller left a lot on the table.”

The general feeling among analysts was that institutions which had their share quotas scaled back had created strong demand for Meridian shares.

But the analysts warned that the general election could affect the share prices of both Meridian and Mighty River Power, which was partly privatised this year.

“My valuation for . . . [Meridian] as a whole is . . . around $1.10 if the Labour Party wins, but business as usual under National at around two bucks,” Anderson said. . .

That loss in value isn’t just for the wealthy for whom the left show no concern.

It is loss in value for ACC, Kiwi Saver accounts, the New Zealand Superfund, other pension and savings funds, and of course in the 51% of the company the state still owns.

The best way to keep the value up is to get National back into government.

The #gigatownoamaru campaign doesn’t hold political views.


Learning from history

27/01/2011

Edmund Burke said,  “Those who don’t know history are doomed to repeat it.”

The National Party does know its history and has no intention of repeating the mistakes made by the then-Labour government (in which were current Labour leader Phil Goff and Act MP Roger Douglas) when it sold state assets in the 1980s.

The proposal to sell minority stakes in a few State owned Enterprises, announced by John Key yesterday,  is a very moderate response to the very real danger posed by New Zealand’s high level of debt.

The left are scaremongering that this will mean overseas ownership but it won’t.

The government will retain a majority share and New Zealanders will be first in the queue for shares.  Among them could be Kiwi Saver providers, the Superannuation Fund and Iwi with Treaty Settlements none of which were possible buyers a couple of decades ago.

Even if they then on-sold to foreigners, and it is most unlikely all of them would, the government would still have a majority holding.

Funny how the people who oppose overseas ownership of land, (which can’t be taken away and use of which is subject to domestic laws) and minority shares in businesses, don’t seem to mind being highly indebted to foreign banks.

You don’t have to know much about history to realise that poses a far greater danger to our economy and sovereignty than selling a minority share in a few assets.


Now you’ve got a choice

09/10/2008

Mary Holm says National’s policy won’t undermine KiwiSaver:

The National Party’s proposed changes to KiwiSaver would considerably reduce two of the biggest gripes about the scheme – that some people can’t afford it and that it ties up savings.

They also show National is broadly supportive of KiwiSaver, allaying fears that the party would make it not worthwhile to join if it became the government.

True, the freezing of employer contributions at 2 per cent of pay from next April – rather than rising to 4 per cent by 2011 – would make KiwiSaver somewhat less attractive for employees.

But with the government kick-start, tax credits and other incentives unchanged, KiwiSaver would still be the best way for most employees to save.

. . . For the self-employed and non-employees, including children, KiwiSaver would be unchanged under a National government.

The reduction of the minimum employee contribution from 4 per cent to 2 per cent of pay means it would be easier to afford KiwiSaver, especially after taking tax cuts into account. People earning $40,000 or less have already received tax cuts from October 1 that would more than cover 2 per cent KiwiSaver contributions, and those on higher incomes aren’t far behind.

By the time National’s April 2009 tax cuts took effect, everyone’s pay would have increased by considerably more than 2 per cent.

People reluctant to tie up 4 per cent of their pay – usually until they buy their first home or reach NZ Super age – could tie up only half that amount and still receive the incentives. They could continue to save the other 2 per cent in a non-KiwiSaver vehicle, with the money accessible at any time.

Many would find this 2 per cent option attractive. It would enable them to take out savings to start a business or to help out family or friends – things they can’t do with KiwiSaver money, although it can be withdrawn if the member suffers serious illness, financial hardship or goes overseas.

Anyone who would prefer to tie up their money, because they would otherwise spend it, could continue to contribute 4 or 8 per cent of pay to KiwiSaver.

Lowering the minimum employee contribution to 2% makes it easier for those with less money to spare for savings and those who can afford more can contribute more if they choose to or invest the extra savings where they aren’t tied up until retirement.

National trusts us enough to give us more choice.

UPDATE: Keeping Stock agrees 2% may attract more savers.

UPDATE 2: so does Barnsley Bill.


Hager’s Hollow Horror

05/07/2008

John Roghan  says Nicky Hager is carving out a new career in disingenuous political naivete.

Not content with a book based on Don Brash’s emails, since brought to the stage and soon to be a movie too, Hager is running a sequel on the discovery that some of the same “hollow men” are consultants to John Key.

The fact that someone in the National Party must be passing this material to Hager is far more interesting than the use he is making of it, and I have no objection to his using it.

I agree that where the material comes from is the more interesting, and for National, more serious point.

…email, I think, is fair game. A fair reporter, though, could reveal what he learns without feigned horror at the fact that people running for public office hire consultants who try to conceal some of their intentions during an election campaign.

Parties of all stripes are coy on some subjects before an election for good reasons.

The public interest can be greater than the sum of personal interests, sometimes even in conflict with direct personal gains. It is easy to sell benefits to a section of the electorate, harder to explain how the benefits hurt a country in the long run.

Some are minority interests that should be advanced in the national interest. Hager should ponder how much progress Maori would have made in recent decades if every step in their recognition had been an election issue.

Quite.

Public debate usually favours the status quo. Not much could ever be done if every decision was put to the electorate for a prior mandate.

Take the present Government’s biggest economic moves, KiwiSaver and, this week, KiwiRail, which I don’t remember being canvassed, with all their costly implications, at elections beforehand.

Had Labour given an inkling at the last election of the premium they have had to pay to re-nationalise the railway, and the fortune it is going to cost to cover its likely losses, National’s last campaign would have feasted on the information.

If only.

But now that the deed is done, the politics have changed. The purchase is the status quo and National will not dare put re-privatisation before the electorate this year, though that may be what it ultimately does with the trains if not the tracks.

Yep – once something is underway it is difficult to change it, even if it’s because sometimes bad policy is good politics.

Likewise KiwiSaver, a year old this week. At the last election the savings scheme was an essentially voluntary proposal. The following year it was to become compulsory for employers and acquire some costly enticements of dubious economic value.

Not long ago my employers wound up my company super fund. I couldn’t blame them; from April they had to contribute to KiwiSaver if staff favoured it. And who of us were going to turn down Cullen’s $1000 handout and tax credits?

The scheme celebrated its first birthday on Tuesday with 718,000 members – more than double the number predicted in the first year. The only people complaining about it are those annoying economists who see the difference between individual gains and the national welfare.

They fear the scheme will not add to total personal savings, merely displace previous savings schemes.

In the Herald last weekend Maria Slade reported an estimate that as little as 9 per cent of the money in KiwiSaver accounts so far is new saving, a percentage the researcher reckoned would not cover the administration and compliance costs of the scheme.

Is anyone surprised by this?

Westpac economist Dominick Stephens said KiwiSaver had cost the taxpayers $497 million in its first 11 months, an amount that could have added to national savings if it had been left in the Budget’s fund for future public pensions.

Even that fund is questioned by some savings professionals who point out that a superannuation scheme is only as good as the future economy that will have to pay out. From that point of view, the best retirement insurance is the investment made in the economy today.

And not just retirement – health, education and every other service will be more secure in the future if we strengthen the economy now.

Anyone who believes that the best investments are made by those who stand to lose if they get it wrong would argue the economy would be stronger in the long run if the KiwiSaver incentives were turned into personal tax cuts.

And yes again.

Nevertheless, National will have to keep the scheme now that it is replacing private savings on such a scale. The best the party can do is continue to avoid saying whether it will keep the incentives.

It will not be easy, and should not be easy; it is the job of political opponents and the press to pin all policies down. But adroit tacticians can keep the options open and enable a government to come to power with room to move in the national interest. Voters, I think, understand this. They don’t need horrified disclosures that it happens. It is the horror that sounds hollow.

Exactly. National has learnt from the damage done by stupid promises made by Jim Bolger before the 1990 election; and Helen Clark has too which is why she keeps trying to under promise and over deliver.

Parties should be upfront about their philosophy, principles, general  policy, and – sometime before an election – some detailed policy. But they can’t be specific about everything because, once a party is in Government it must have room to adapt to events and circumstances.


%d bloggers like this: