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NZ presents some of the most alluring property in the Western World; particularly given the greater easy of residency, the low cost of property, and the liveability of the country. In addition, there is no capital gains tax, transfer taxes, VAT/GST or wealth taxes in NZ, so rest assured that NZ property is tax-effective! Learn more now!

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Thursday, December 30, 2010

New Zealanders getting rich from business

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Michael Hill has some important advice for New Zealanders....if you want to be successful...as I guess he thinks you ought to be, then you need to 'get out of your comfort zone'.
This is undoubtedly a problem in NZ. The country is inherently less aspirational than places like the USA, southern Britain or Australia. I do feel these places are 'the land of the free', and NZ has the sense of a retirement 'backwater'. The reality however is that NZ is among the freest countries politically in the world. Sadly this is a relativist view, and statism is a sorry legacy in all countries.
The problem for NZ is that with little population growth and the entrenched government controls means the country cannot depend on population and debt stimulus that other countries do. So either the government has to resort to winding back government or stimulating population growth. I hope the former.

What I find particularly interesting about Michael Hill is that he really only made his break from the age of 40yo. This means there is still hope for me. :) Actually, his perspective is much the same as mine, but for different reasons. According to the NZ Herald, he lost all his possessions in a fire. In my case, I had a life-changing girl friend. She was kind of the first positive person in my life. A best friend....but a kindred spirit in the sense that we were both out to make a difference. I truly believe I am on the path to success now, whereas before I was just a lot of great ideas with no execution. She most importantly changed my view of people. Before I just did not see potential in people. One of the great aspects about the internet is the ability to meet people who think as you do.

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Wednesday, December 29, 2010

Plans for travelling to NZ in 2011

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CNN has identified NZ as the 2nd best place to be in 2011. The big reason for this might well be the relatively low NZD and the World Cup Rugby in September 2011. Mind you, travellers ought to note the high cost of travelling in NZ. For travellers, you might like to reflect upon some of the costs, which are particularly high in tourist meccas like Queenstown.

We offer you some cheaper ways to keep costs down:
1. Buying a car - You can pick up a really cheap car through Turner NZ auctions in a number of major cities. Visit their website first before you come. You can always sell the car before you leave through TradeMe. This might be harder if you have no registered address in NZ, so set up your TradeMe account before you buy. You will probably want to buy other things anyway. It makes sense to buy a car if you are here more than a month I suspect. I suggest buying a car with a 1.6-1.8L engine to reduce the cost of NZD1.98/litre petrol.
2. Rent a campervan - This spares you the expense of accommodation as well as flexibility and difficulties finding a hotel. NZ is a quiet place so its not too difficult to find a place to stay the nice. Just make sure you park where there are toilets. Campervans are cheap in NZ because there is a lot of competition. If you need to get back to an airport for a flight out, consider www.standbycars.com for a nominally priced campavan return.
3. Buy all your food in Countdown and New World supermarkets. Restrict yourself to the token coffee and muffin at cafes for a token eating out experience. Catch your own fish. Fishing licence is required in NZ.
4. Internet is really hard to get in NZ, so it might be worth getting a pre-paid USD modem for around $100. Get the right download volume to meet your needs and time constraints.
5. Cost of living is high, so consider bringing all your camping needs. There is limited competition and you might not have time to buy stuff 2nd-hand from salvation army or 2nd hand shops, or from TradeMe.co.nz.
6. NZ experiences - Consider carefully the experiences you have because anything related to tourism is overpriced because of demand. i.e. The cost of entering Rotorua hot springs are excessive, so you are better off going to Yellowstone (USA). The old reasonably priced experiences in NZ are swimming at the beach, walking bush trails and renting houses. If you do overnight trips, alpine huts can cost anything from zero to $50/night, depending on demand. This is why camping is the ultimate stop-gap.
7. Flights - The best entries into NZ are Jetstar (from Australia or Japan), Air Asia X (from March from KL) from Gold Coast or Melbourne; as these are the discount airlines. Otherwise check out the www.jetstar.com website.

The best way to enjoy NZ is to visit in the summer and stay on a 3-month lease in places like Queenstown (South Is), Te Anau (Sth), Wanganui (Nth) and Auckland (Nth). This makes maximum use of your car. You can start in the south in summer, and spend the winter in Auckland.

Tuesday, December 28, 2010

Home stay in New Zealand

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One of the cheapest ways to travel around a country is by home stay. Home stay is popular for older people, couples, students, and most particularly girls, because there is some assurance of having a host to provide support. Most backpackers offer similar support, however a host offers a more homely experience, though in all probability, not the professionalism, and perhaps not all the services. You will in most respects get better services in terms of furnishings, bedding, and many hosts offer food and travel. You might find yourself becoming a member of a family.
Another benefit for guests is that you are able to ensure that the person has police clearances. Any person who reports bad service is likely to see a bad host stricken from their membership base, offering some assurance to you. I would advise anyone who wants to make payment to pay via Paypal because at least you have some recourse if they don't provide the service you require. It is common to pay a deposit before you arrive, say of $200, and then the balance upon arrival.
Personally, home stays do not always work out because there are many people who are looking for extra income. The problem is often in the form of:
1. Differing standards of cleanliness
2. Different expectations in terms of services offered, i.e. You might have expected your own bathroom, greater privacy, you might not have expected any men to be there. You might have expected wifi internet, or access to a computer.
3. Differences in terms of food style or preparation, i.e. If you host is offering food, you want to inquire as to the types of food they eat (i.e. fatty foods, takeaway or vegetarian), and whether you will be able to prepared your own.
4. Isolation from transport, i.e. You might have expected the location to be close to transport, and you might have expected more transport.

In order to avoid these problems it might be preferable if you have a trial night, but this is not always possible. It is better to simply ask questions.

For more information of home staying in any country - see the HomeStay.com website.

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Monday, December 27, 2010

One of the best NZ advertisements

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One aspect of NZ business that impresses me in NZ is the quality of the TV advertising. There is broadly a very high standard for advertising. I am reminded of a radio advertisement from my first visit to NZ. The byline was 'come and get'm before the Aussies do'. Perhaps my favourite advertisement which comes to mind is the following for NZ Post. You have to love the self-deprecating humour.

The features of this advertisement which impresses me is that I can imagine that NZ is generally a place with a lot of 'tough love', and broken relationships resonate with a lot of people. It appeals to the personal touch in writing a letter, and it highlights the fact that, in a world of emails, there is still a place for the handwritten world. Go to You Tube and see how many people this advertisement has impressed.

The opportunities in energy for NZ

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In recent months I have been writing about the prospects of NZ staging a magnificent turnaround - albeit in the next decade, perhaps longer. I have made the argument that the world is going to be looking for oil, and eventually they are going to make their way to NZ. It is not enough that they come looking here, but it will also take some time for them to find something. It is not that I know something that they don't on the exploration-side, its just a fact that NZ has vast areas of offshore basins upon which carbonate oozes can accumulation, and in which oil can develop. This article by the NZ Herald suggests that oil explorers are starting to enter the NZ market.
The other reason why this is big is the fact that NZ is such a small nation, with just 4 million people. The implication is that NZ is potentially going to be like those small European nations like Norway, which grow rich from oil. Brunei is of course another good example. It will come...though its hard to say how much oil wealth NZ possesses...there is good reason to think it will make a substantial difference to the country. It is probable it will be gas rather than oil. If I reflect upon the geological basins of the world which most resemble the NZ context, it is likely to be the North Sea (UK-Norway fields). The proof however remains in a comparison of the geology and ultimately the evidence that comes from performing exploratory geophysics and drilling. There needs to be the right rock types, sufficient accumulation, structural development, cap rocks.
The other important development in NZ is going to be the development of iron ore resources. NZ has vast iron ore sand deposits containing titanium and vanadium. These additives will prove to be high value in the context of their ready access, because they will allow the low-temperature smelting of these ores into high-strength steels. There is probably more work to perform on these ores.
The important point is that the longer NZ takes to develop these resources, the greater their worth. The market for high-strength steels is yet to really develop, and there is still plenty of oil in the Middle East, so it will be another decade before oil prices go crazy. Resource-rich countries like Russia, Australia, Venezuela and NZ will perform really well. I think its just remarkable that the world's richest nations are not doing more to avert this problem. i.e. They ought to be investing in more efficient engines. i.e. The internal combustion engine is really very inefficient. The modern fuel cell is pretty efficient, but it produces at access of heat, when in fact the world needs the more useful form of energy, electricity. The Stirling engine is a far matter design, but it suffers from the same problem.
I would not be surprised if some NZ'er or an Australian comes up with the ground-breaking technology which sees developments in this area. It will be some frustrated engineer who could not get government funding, who mortgaged their house to develop the technology, and they end up selling out for a 3% royalty. Its the Sarich engine scenario all over again.

Sunday, December 26, 2010

The 'other worlders' of NZ - according to WikiLeaks

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WikiLeaks has revealed some US embassy perceptions of NZ people, describing them as 'first worlders' or 'other worlders'. Former NZ Prime Minister regards these comments as disrespectful. The reality however is that they are value judgements, and it is the role of each of us to make value judgements, and respect 'the right' of people to make them. We do not have to be defined by others judgement, and nor should we. We ought to live our lives by our own standards and values, and not substitute others values and judgement uncritically for our own.
If we are efficacious in our thinking, then we have nothing to worry or point of vulnerability. We are prepared to adjust, and we are able to anticipate. The fact is that NZ is a socialist welfare state with a small productive sector. It needs to grow the economy, so it needs to curtail that aspect of the nation which Helen Clark feels compelled to defend....welfare, intrinsic love, i.e. unconditional care for others. Those are the values which have been a disservice to NZ, and those are the values which the US Embassy detests or 'disrespects'. Of course Clark is not going to value any such judgements, because they are antithetical to her own values, as a liberal/socialist.

NZ Adventure tourism - a false economy?

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The title of this blog is 'living in NZ', but maybe it should be dying in NZ. No, its not a reference to the local retirement industry, or the lack of domestic activity, I mean actual dying. The local adventure sports industry ought to be doing a lot of navel-gazing at the moment because there are just too many people dying whilst doing adventure sports. Consider the recent accidents:
1. Several light planes crashing
2. Balloon accident
3. Bunge jumping death
4. Canoeing accident
5. Jet boat accident
6. Kite sailing - the latest accident

Some of these accidents were not this year, but last, but regardless, there is too many accidents. People engaging in these sports do not expect to die. Are the rates too high? I think so? Is it an acceptable risk? Well, I would suggest that is something the participant should decide. Perhaps there is a need for immediate disclosure of:
1. NZ-wide statistics on the percentage of people being injured in adventure sports
2. NZ-wide statistics on the percentage of people being injured in the specific adventure sport being attempted
3. Company-specific statistics on the percentage of people being injured in the specific adventure sport
4. Company-specific statistics on the percentage of people being injured in the specific adventure sport - this month, this year, the last 5 years
5. Identification of all the possible dangers that you could be exposing yourself to by participating in the sport. Probably the biggest is someone performing tasks they are not ready for, whether its an instructor who was out drinking last night; or an inadequately trained instructor because most want to take off and travel the world...for bigger thrills.

You might wonder whether anyone gets any business disclosing this information. They might just wonder if its worth it. If you think life is about getting such thrills, maybe you ought to be just taking heroin. They call them 'cheap thrills', I would argue that:
1. They are over-priced
2. They could cost you your life

I am fond of adventure, but I think its silly to take risks; most particularly risks you don't control. I occasionally go whitewater kayaking/canoeing, but its adventure/exploration, not cheap 'adrenalin thrills'. When I go kayaking, it is after I have slowly graduated to more difficult rapids, and also after researching and understanding rivers. I also never go beyond grade 3 rivers, even if they sometimes surprise me with grade 3.5 rapids.
I discount the value of these activities for the same reason I discount taking drugs. Its not what life is about...twitching a few neurons to fill alive for 15 - 60 seconds. NZ seems to have a penchant for dreaming up some new adventure sport. Some form of new board sport, etc. There are plenty of pipe dreamers out there. Some are little variants on old schemes. It might better be regarded as escapism by the inventor as much as the sports participant. I do not however want to discount all such sports. Sport does entail risk. Each ought to be in a position to know just how much risk they are taking.
Perhaps what this industry (kite boarding) needs is an 'air bag' device, so it they get in trouble they can release a valve and an air bubble blows up around them; so they get caught in a tree rather than killed by it. Alternatively, the sport should be conducted a certain safe distance away from trees and other obstructions.

Save yourself some money and engage in some sustainable pleasures!

Friday, December 17, 2010

Queenstown - Melbourne - Gold Coast - KL flights

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We are going off to live in Queenstown soon. I read in today's paper that Jetstar is opening up new flights from Queenstown to Melbourne and the Gold Coast. Queenstown is a popular skiing and water sports (summer) tourist town. The direct access to two major cities on the East Coast of Australia can be expected to attract more tourists.
We had already mentioned that Air Asia X, another discount airline will be offering flights to Kuala Lumpur, Malaysia from Christchurch from 1st Mar 2010. The good news is that you have another option from entering NZ through Queenstown from Asia. You can fly from Queenstown to the Gold Coast by Jetstar, and then fly to KL with Air Asia X. Of course the more direct route from Christchurch will probably be cheaper.

Wednesday, December 15, 2010

Air New Zealand's 'Space Couch' innovates air travel

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The future of the NZ economy depends on doing things smarter. If it does it enough, then perceptions about NZ will change for the positive. Here is a case in point. NZ has the capacity to develop niche, high value product and service exports. It also has the capacity to earn royalties for product design. A recent design royalty stream that Air NZ has developed is its 'Sky Couch' seats.
What a great opportunity for NZ to change the narrow perceptions of NZ as merely a farming country. I personally don't know why the airlines have not improved seating for years. I remember as a kid I was dreaming up ideas for more comfortable seating. Staying in capsule hotels in Japan only reminded me of the opportunities many years later. These designs by Air NZ do not even strike me as a particularly progressive move. More change can be expected.

Tuesday, December 14, 2010

The best place in the world

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NZ is not 'the land of milk and honey' that a lot of people would expect, but then its hard to think of any place which is. NZ is of course a diverse country offering a range of experience, and of course every person has different values; but there is also a great deal that unites us, and in as much as we might forget, we do have a human nature which demands certain objective values for our happiness.
So where does NZ rank - its a wonderful place to live in some respects, but it is also a challenge in other respects. Consider some of the following comments at Expat Forum.
I have lived in Australia, NZ, Japan and the Philippines. Australia is my favourite place to live, and I suspect I will head back that way within the next few years.

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Retirement age deferred to 67yo

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The NZ government has announced that the retirement age is being deferred from 65yo to 67yo. The reason of course is that the NZ work horse is not working hard enough, so he has to work longer in order to carry his costs. Is that the real lesson? I would care to differ in several respects.
1. The government is not very efficient. We have a lot of costs placed upon us by inefficient government. Government is incredibly centralised, which is great for economies of scale. The problem is that too much depends on slow government decision-making. There is also the problem of poor cost recovery, which makes capital investments unsustainable. The implication is that NZ has one of the worst funding provisions for capital infrastructure in the OECD. Note all the failures in the telecom sector. There is a great deal of inefficiency, particularly in local govt. Its all too common to see council workers standing around, or performing wasteful expenditure.
2. Youth is not well-prepared: The tough love evident in NZ is really a sign of poor values. NZ really remains caught in 'old world' 1970s values. There is too much indulgence, lack of pride, purpose, self-esteem, and self-awareness. There is really a need for some structure or self-discipline in a great many lives. There is a need in this country for the affluent and enlightened decision-makers to engage with the Maori and 'white trash' as we might euphemistically call them, in order to give them positive incentives to work hard, provide constructive support for their children, and to develop a sense of personal identity which differentiates them from others.

There are too many vacant minds in the country. Too many kids who are idle. There are too many people who hate their jobs, who are thus inclined to work 3 days and charge for five.
Living standards are supposed to improve....so why is the retirement age falling? The simple answer is we are living longer. But that is not the reason. The average life expectancy of people in Western countries is probably rising 1 year every 7 years. i.e. A rate of 1.3%. This compares with real growth in national income of just 1.2% per annum between 1975-2005. That is very low growth. Check out the history of economic growth here. Aside from slugging population growth, the problem is constrained national income. There is too little provision for capital spending and too much spending on recurrent items. This can be partially attributed to the welfare state which gives primacy to giving, as opposed to creating; however this reflects the deeper issue of values. There are some unhealth, reactionary, short-term, deluded egos in NZ who are simply keeping this economy down, and the NZ government is financing them. I would suggest the public sector is one and the same problem. This is the problem with middlemen. Politicians will flog the beast for every working hour it can get without reflecting on its own impact. So long as it preserves its moral relativism, we will be voting for National-Labour. It is a deluded or false dichotomy which serves no one. Get rid of democracy. Its poison!

NZ needs some economic and social reform

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The NZ deficit has blown out in the half-year budgetary review. Clearly the NZ govt has to rein in spending and restrain itself to prudent expenditure. There is a lot the government could do of course. Maybe it was looking for such bad news to justify some tough decisions. Among the measures are likely to be:
1. Chasing 'tax cheats' with greater powers - Who can argue with slavery as a means of repaying debts that governments took out to retain power....oh offer bad service.
2. Abolishing the interest-free concession on student loans. This is too generous. Even Australians pay a nominal interest rate on their student loans. Also, NZ will have a tough time recouping the money if those students head overseas.
3. Bringing forward fibre optic layout: There are plans to lay a fibre network in NZ. The problem is that the network envisaged will not be laid until 2015. This is a little slow I suggest.
4. Supporting call centre development: NZ ought to be the call centre hub for Australia, and even some European countries like the UK. Why? Because it has the lowest wages of all English-speaking OECD countries, with comparatively high standards of training; plus a relatively weak currency, and the expectation that will remain the case. NZ needs jobs. There are good reasons for NZ to develop call centres for Australia, as opposed to outsourcing them to Asia. There are certain jobs that NZ will do better, e.g. Selling conference tickets, product marketing, and even SEO services like content writing.
5. Software development: NZ is a logical base for the development of software products. It is one thing to have a financial base in LA, etc, however as far as software development is concerned, NZ is a great place to develop product because of its education system and cheap wages. The problem however is creating your own corporate culture because many NZ'ers are not accustomed to hard work. Things are a little slow here....the world is moving on...and too many are being left behind. The country's biggest industries are milk, tourism and retirement.
6. Boosting savings: NZ needs more investment funds, and those funds ought to be geared completely to investing in Australian mining. Why? The Australian dollar is going to be stronger over the next 20 years, the Australian mining sector is going to benefit from a strong commodities market (thanks to China and India). Greater savings means less spending; which means a balanced budget. NZ citizens are too reliant on government.
7. Business incubation: I think there is an opportunity for local governments to engage in some business incubation in order to help the unemployed develop some skills. There really is no need for the high-cost education skills in the modern era, as a great deal of information is free if you know how to harvest it.

Wednesday, December 8, 2010

Sale of NZ state-owned assets

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John Key's National Party government has signalled that it will privatise state owned assets in its next term in government. The assets it has signalled for sale are mostly the power assets:
1. Might River Power
2. Solid Energy
3. Genesis Energy

It seems like the government intends to retain ownership of the hydro assets for the time being. A government has conducted a study of the value of these assets, and believes that Solid Energy is only worth half of the $3.5 billion attributed to the entity by Solid Energy executives. I tend to agree with Solid Energy. The company has some significant assets, though central and state ownership of those assets can only hinder their commercial value. Consider the projects:
1. Coal resources & Huntly power station - The power station must be worth $300mil alone.
2. Southland lignite resources - important source of feedstock for export coal business given recent developments in compressed coal bricks. I think this resource is very valuable, and the only reason to be conservative is the technology risk. It will assist the government to wait until this technology is proven in Vietnam, where a Vietnamese govt JV with the University of Melbourne is testing the technology on the Red River lignite deposits. I suspect Solid Energy will do its only testwork.
3. Coal seam gas potential - important given the declining availability of offshore resources. This could change however in the next 10 years. This potential is probably worth anywhere from $150 to $500 million.

I can agree that the valuation of Solid Energy is probably a little on the high side; but then it might have assets I am not aware of. There needs to be a closer look. I suspect the government had an accountant study it, and you don't do that. Accountants only look at cashflows and their prospect of being extended. They are too conservative. They cannot see over the horizon. They tend to be an anti-conceptual lot. I remember trying to sell a mining company to a fund manager. He was more interested in the 'advanced' project for which we had a cashflow model than the gold project with very exciting drilling intersections. Today, the 'advanced' project is still on the backburner, and the gold project is being constructed. Why? Because he had no idea about which way commodity prices were going, he had no ideas about technology/development risk, and he was suspicious of anything without a cashflow model. They need quantitative data. Whereas a geologist/mining engineer needs as little as a few well-placed drill holes and some structural information (at the least). Gold is going to $2500/oz. Does he believe it? No. People are sceptical of what they don't understand. Accountants enter the world only with a little life experience and quantitative analytical skills which are dependent upon conceptual knowledge. They are only 'half a brain' really. That is why I studied geology, mining engineering and accounting/finance. My lecturers praised my judgement. But really, it only reflected my life experience up until that point. I was visiting mind sites when I was 14 years old, and I was trading mining stocks since I was 11yo.
If you want to do your child a favour - buy them $1000 worth of stock each in Vital Metals (ASX.VML), MIL Resources (ASX.MGK) and Union Resources (ASX.UCL). Use a lottery game to distribute the stock, to create some competitiveness between them. Soon they will be wanting to get a newspaper run to raise more money to buy more stock. Of course, you could always buy these stocks yourself. You're never too old to learn 'money makes money'. The lesson of timing will take longer to learn. That requires studying charting (i.e. technical analysis).

Why am I suggesting that NZ'ers buy stocks in Australia? The reason is because over the next 15 years the NZD is going to be left behind. Thereafter it will probably start to close the gap, but not before more Kiwis will leave for Australia. The mining industry offers the best exposure to the Chinese/Indian boom, which will go for another 20 years. Why? Because they have a lot of under-utilised labour. That is fueling demand. It will take off again as soon as the global debt inventory is absorbed/recapitalised.

Monday, December 6, 2010

The prospects for a competitive telecom market in NZ

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You might ask - what would a free marketer like myself expect from a NZ broadband network. We all have long come to understand that free markets don't always deliver desirable outcomes. There are reasons for this:
1. Cross-market subsidisation - profits extorted through market power in some market can be used to finance new investment in others. We thus want to ensure in a global world that companies are able to finance improvements to services, but that any surplus profits are invested in the local business.
2. Market collusion - profits are not able to be excessive because two market competitors are able to extort excessive prices from the consumers who have no 'effective' choice. It matters little if there are just two players pretending to compete or 10 who have a formalised price-following or price-targeting strategy. i.e. You might find that the CEOs of these companies get together and they decide that in 2011 Telco A will be the price leader, in 2012 Telco B will lead any price changes. It goes without saying that those pricing changes will be favourable.
3. Transfer pricing - They all establish enterprises abroad, say in Ireland (with a lower tax rate), which purchases the hardware, and they pass on the costs to the NZ operating entity, so they look competitive, and profit margins look thinner.
4. Accounting tricks - Maybe they will use creative accounting to understate profits, such as making provisions for the acquisition of future capital, or the depreciation of old plant, which help to understate costs. These provisions don't even have to be real; they are just planning, so those profits can be released at any convenient time.

The question then becomes as to how does one achieve a truly competitive market? Or how does one ensure that business earns a reasonable profit, business has an incentive to cut costs, but at the same time provide an efficient service; and how does one get business to accurately and honest report its performance such that the market achieves an optimal outcome. We might also ask:
1. What constitutes fairness? Who gets the market surplus created in these transactions - the consumer or the business operator? Who created the surplus? Business.
2. What right does the consumer (or the government) have to ensure surpluses are not invested abroad in new or more competitive markets?

These are the intellectual questions that never seem to get answered. They are not new questions. They were asked and answered by people like David Ricardo and Karl Marx; not always with desirable interpretations. Far from wanting revolution, I would like to see an efficient market. Perhaps the strongest prospect for competition comes from a change in the way we structure society. This is an intellectual debate we do not have because our political system is so impervious to ideas. People are so concrete-bound. They are reluctant to engage with ideas, because the legislature does not place a value on ideas. It values perceptions because that is what the majority of voters respond to. They response to the 'concrete' because they have no effiective power, they have little specialised interest in all-manner of issues. So they are passive, only responsive to subtle messages.
I am not going to answer this question here. The greater issue is our political system.

Sunday, December 5, 2010

High rate of animal cruelty in NZ

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According to the NZ Herald, there has been a 2nd attack upon some fur seals at Kaikoura, on the Northern tip of the Southern Island of NZ. I visited those seals about a year ago. Some idiots have come along and killed about 20 of them. What was interesting was the fact that there is apparently a waterfall in the area where the seals swim. This would have been a great attraction to visit if I had known about it.
I have seen a great many cases of animal cruelty in NZ in the last 2 years I have been here. There are far more cases that in Australia. I attribute this to two issues:
1. The more collectivist (socialistic) ethic of NZ
2. The higher incidence of child abuse, such that animal abuse is a practical extension
3. The high incidence of peer pressure-yobbo-loutish behaviour by youths drinking alcohol
4. Low population of NZ, which makes the place a little boring for youths. There is not much of a business culture, and this might be explained by the lack of opportunities for a small, isolated island population offering little in the way of investment or job opportunities. Small businesses have little opportunity to expand with minimal population growth. Everyone is taking off to Australia.
6. The high legal allowances for drinking - 9 beers in the first 2 hours compared to 4 in Australia.

Ethics is the big issue as far as I am concerned. The other issues merely provide the specific context in which crimes occur. There are a number of things that foreigners come to NZ for, and I would think chief among their list are the following - but maybe NZ is simply burning its bridges:
1. Natural settings - the mountain vistas, the wildlife, the trails - Sadly there are too few trails to walk along, or roads to access remote regions. There is a lack of public toilets.
2. Cultural settings - English gardens, cafes - lovely and reasonably priced, often free gardens. I wish more cafes had free wifi. Shopping malls food courts are pretty dirty since no one cleans the tables, or the spilt drinks, etc.
3. Small towns, low population - They are still pleasant - just avoid the drunken youths around and in the bars. I never see gang members in NZ, except whizzing past on their Harley's.
4. Friendly people - they are friendly and related, just avoid the drunken louts at night and on the road, or when your illegally camping in some campervan by the beach.
5. Low cost - Less so with the increase in the GST, but aided by new low-cost flights from Asia with Air Asia X.

The cruelty is a low note to end on, so let me take it a little lower. NZ has a pretty bad crime rate. Most news seems to be punctuated by animal stories - whether its a seal being clubbed or sighted, or the murder of someone working home...usually from a pub. Other than that the news is about Australia and politicians. Little surprise 40,000 New Zealanders are escaping to Australia each year. It makes you wonder - is NZ's problem perceptions or the people. I hope you stay long enough to find out because it is a beautiful country.

Wednesday, December 1, 2010

New discount airline entrant to NZ - AirAsia X

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Good news for New Zealanders! AirAsia X, a Malaysian-based discount airline is flighting from Kuala Lumpur to Christchurch. The airline will start taking bookings from the 3rd Dec 2010 for flights from 1st March 2011. The promotion is offering flights for $99 plus taxes, which I guess will be around $150, so $250 each way. The problem is that AirAsia X and its competitor, Tiger Airlines, which only flies to Melbourne and Perth often offer a very cheap single route, so you pay full price for the return. This is a problem if immigration at your destination country requires an outward-bound ticket. Its fine if you are leap-frogging because you need only have '1 leap' booked ahead, but that's lost flexibility.
I have yet to fly AirAsia X, but like a lot of discount airlines, expect to pay extra for food, beverages, checked baggage, excess baggage and ticket changes. These airlines offer a lot of discounts, so its worth waiting for a good deal. Consider the options:
1. Jetstar - flights from Auckland or Christchurch to Melbourne, Sydney, Gold Coast, link to Jetstar or AirAsia X in Gold Coast or Melbourne for flights to Asia.
2. Jetstar - from Auckland direct to Japan (Osaka or Tokyo-Narita). Some discount airlines fly to/from Japan. i.e. Cebu Pacific, and Chinese airlines from Haneda Airport (Tokyo).
3. Air NZ - they offer cheap Asia flights for two in twin-ticket sales through the TradeMe website.
4. AirAsia X - they fly Christchurch to KL (Malaysia), with links to Japan, China, Thailand, the Philippines, Indonesia, etc.
5. Pacific Blue - their prices are generally not as competitive as Jetstar, but they do have sales, so worth a look. They are appealing for flights from Wellington to the East Coast of Australia.

More discount airlines for NZ is great news because it has been difficult for travellers to fly to NZ from Asia. Air NZ offers great service, but you pay for it. Jetstar and Pacific Blue also offer comparable service cheaply, but they have limited offerings. Wellington only offers a limited number of destinations because of its smaller airstrip. i.e. Confined to smaller planes. When booking flights from Wellington, unlike the other airports, they do not add their airport tax to the ticket price. This is wrong to me because passengers should be treated the same.

Monday, November 29, 2010

Investment in NZ farming assets

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There was an article in the NZ Herald today highlighting the appeal of NZ farming properties as an investment opportunity. The author questioned why NZ'ers, instead even foreigners, are so interested in NZ rural property when the income is so bad. I makes the case that:
1. Rural properties are capital gains tax free
2. Rural properties have offered an average capital appreciation of 10.5%

There are another two further reasons to think there is even more upside in property:
1. Hedge: Property offers some appeal as protection from currency debasement. Commodities are priced in USDs. Thus if the NZD was debased because of poor government policy, there is a hedge in the sense that your US-denominated income will cover your capital loss.
2. Market access: There is scope for the USA-Japan-EU to eventually drop their agricultural tariffs and subsidies which have penalised NZ, as well as the third world. There is of course a trend towards free trade/trade liberalisation. The question is - how long will this take to occur?
3. Demand: There is a shift in Asian developing countries to meat-rich diets, so that demands more meat and dairy imports from places like NZ. Chinese, Filipinos, Koreans, Japanese, etc want bigger breasts, and to get those they need to drink milk. Of course they are also eating more protein like McDonalds, etc.
4. Investment: There is the opportunity to subdivide rural properties into lifestyle blocks.

A lot of property is no longer appealing for wool growing. There is some interest in these properties for timber-based industries, which are of course low-maintenance industries, and easily contracted out to third parties. There is even the prospect of tax, carbon credits and ancillary opportunities like using the waste products for renewable power generation.

Read more in this article or check out our NZ Property Guide. NZ has the obvious advantage over Australia in several respects:
1. Rainfall in NZ is more reliable
2. The currency is more directly tightened to the agricultural commodities, as opposed to metals and energy. This will not change for the next 10-15 years. NZ will eventually discover oil/gas I suspect.

Thursday, November 25, 2010

NZ government and opposition policy lunacy

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When you look at the NZ political landscape....an explorer might declare its 'desert' and sparsely populated with good ideas. Take the latest saving from both:
1. The Labour Opposition Party
2. The NZ Reserve Bank governor

The Labour Finance minister is arguing that he is not in favour of privatisation, but partnerships between private and public capital are ok. One might wonder why the distinction. It is a silly, arbitrary one....but then I never looked to politicians as moral exponents, or leaders of anything worthwhile. On the contrary, they display the hubris of wanting to look 'new age', but in the process, simply looking like idiots. What is the intent of this government policy? Maybe Labour realises that its hard to attract capital to NZ, so you have to offer 'statutory favours' (i.e. kickbacks) to business through 'partnerships'. Maybe Labour wants to make some money on the side after the travel allowances were abandoned?
Ideologically where are they going? Why retain control over SOEs? Is private business is bad, why don't they embrace the nationalisation of business? Maybe that is too politically incorrect. Maybe Labour represents socialism in its 'unashamed honesty'.. well no, otherwise they would favour nationalisation. Nope, intellectual cowards. Are they not content with extorting wealth through taxes, that they need to drive business as well? Don't they see this as a conflict of interest? i.e. Govt as both regulator, judiciary and executive? Well they do it in government to such bad effect, why not in business as well? Isn't it privatisation? Well, Labour will not allow itself to believe this because it wants to establish the support of the unions. What we are going to see is the SOEs use this concession to shift businesses into SOE subsidiaries, so the SOEs might end up functioning like the model of Singapore's cronyism, where SOEs are investing in totalitarian states like Myanmar, with utterly no accountability because they have a state minister as their patron saint.

What does their suggestion achieve? Firstly, it entails the ongoing enslavement of private capital for public purposes, with the perpetuation of the state/public delusion of economic, moral or political worth. It totally ignores the problems caused by the state, it ignores the psychological impact of slavery, moral scepticism and marginalisation of everyone, or at minimal the fear of being marginalised, alienated or imprisoned for some arbitrary statutory law conjured up by the government, i.e. Speeding camera fines for which their is no logical justification, or the blatant lack of accountability of judges in the judicial system, nor the failure to address the conflict of interest in having judges appointed by the two major parties. It matters little the judiciary is bipartisan, since both parties retain an entrenched interest in their longevity, at the expense of other parties.. But on a more fundamental level, who cares what the parliament thinks. They are a pack of idiots. They don't convey moral authority. Have you ever heard political philosophy spoken from George Bush? No. Have you heard of John Key consulting a moral philosopher? A scientist? Well yes, but they do this only on the margins. Public policy is decided in cabinet with the support of the party. Its party generated, and its utter evil. It is indefensible, but it does not need to be defended because they have the majority. The public who voted for them have to trust them...because they have a choice every 3 years, and if they are wrong, they get to vote for another group of extorting, thieving idiots who fundamentally support the same thieving system.

The Reserve Bank has advised the government to adopt the Nordic system of taxing the income from capital rather than income. This is because NZ does not produce any income, so you have to tax the holders of capital. Hmmm? The problem with that is that it will diminish the value of capital by making it a cost burden, making it cheaper for foreign enterprise to buy. More importantly, it does not change what is fundamentally wrong with taxation and centralised, arbitrary government control - that they are coercive, centralised and arbitrarily defined. This is merely an idea from a government agency bereft of ideas, playing on the fringes of a very evil system. Democracy will not lead us to some form of collectivism...it is collectivism. We are slowly seeing individualism undermined by the 'common interest', or at least the pretense of it through imaginary representation.

Wednesday, November 24, 2010

The future of the NZ Pike River mine

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During the Pike River mine disaster I have raised some questions for journalists to ask, and raised some suspicions. As news becomes available, it is apparent that the mining company has done a good job in undertaking the rescue. The latest reports are available here. The next step will be to restore ventilation to the mine in order that the bodies may be recovered. It also seems likely that the mine will be sealed up and become their tomb. The reality is that this decision may depend upon a decision to re-open the mine.

I have previously argued that the mine should not be reopened without coal methane extraction. These coal seams need to be degassed. The reason is not simply that the coal is gassy, but that I suggest its because the coal is relatively deformed, resulting in strong hydrostatic pressures within the rocks. I would not be surprised if the mine was subject to sudden inflows of water and release of methane inside the mine.

It would be an expensive effort to extract the gas from the development headings. It would be even harder since you would have to get access to existing development headings. Any efforts to re-open the mine will be opposed by 'greenies' because it is a fairly pristine mountain forest environment. I really think it was poor judgement which allowed this mine to proceed. It is superior quality coal. It is the premium 'metallurgical' coal. The seams are not great, the port facilities pretty poor, the distance to market is not appealing, but the coal prices are high, and are likely to stay high. The commercial aspects tend to support mining, however I am inclined to say that its too hard. It would be far more constructive for NZ Oil & Gas to invest in offshore oil & gas exploration. Oil & gas has far more upside, NZ has considerable potential, and probably at far less environmental cost (depending on location & recovery practices) than coal mining. Coal mining is not the future of Greymouth, its the past. The town without this resource probably only had 10 years of resources left. There are far more readily available and appealing coal resources in Australia, Russia and China.
On this one, I agree with the greenies. Really the future of NZ likes in high values services, niche exports, oil & gas, farm products and tourism. Yes, coal will remain a niche export. It just didn't make sense at Pike River. Solid Energy is developing a very appealing and large lignite coal resource in Southland which will have a 100+ year life span. It will convert low grade, hydrated lignite into high energy briquettes made by compression I believe. That resource will make Southland's Gore the coal mining capital of NZ. Greymouth will lose its title in the next 10 years.

Tuesday, November 23, 2010

Should the Pike River mine have been developed?

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In the wake of the 2nd explosion at the Pike River Mine, we might ask whether the mine ought to have been developed, and in the wake of the explosion, whether it ought to be re-opened. I have a number of reasons for thinking that:
1. The mine ought not have been developed the way it was.
2. The mine ought to be re-opened subject to certain conditions

Should the mine have been developed.
The problem with how the mine was developed was the lack of consideration given to the high methane gas content in the coal. The reasons for ignoring or downplaying the gas content was:
1. Surface drilling to extract the gas would have required the development of roads to get drill rigs in, as well as pipe infrastructure. The gas could have been used in Greymouth, but that would have required a power station. It is doubtful that a coal seam gas power station would offer favourable availability factors given the discontinuous nature of probably gas supplies. It would have necessitated electricity supplies anyway, i.e. It would require spending more money. It therefore did not make sense to extract the gas. The other reasons for not extracting gas from the surface is the pristine forests in the region, and the ruggedness of the terrain. Clearly, coal seam gas extraction would have prevented this project from being developed.
2. Underground drilling to extract gas and pipe it out of the development heading was another option. This was less commercially appealing because you are not drilling the whole field; only those areas accessible from the development heading and ancillary tunnels. The coal seam methane extraction/drilling would also interfere with coal development; so this is even less viable than surface drilling to drain the gas out.

Mines in Queensland which have high methane concentrations have the methane drained from the coal prior to recovery as a matter of routine. e.g. Moura Coal Mine being a case in point.

Should the mine be re-opened?
It is easy enough to re-open the mine. The question is whether it ought to be. Logic would suggest that a mine explosion might happen again. The reality is that the mine should not be opened for a number of reasons:
1. High manning level - the mine operates using less mechanised methods of mining which exposes more labour to any explosion, compared to say longwall mining operations.
2. Difficult access - the difficulty getting access to the coal seams to drain the methane makes this a difficult task, raising opposition from the green groups.
3. Value of the coal - The coal is not critical to local industry. It is solely exported to foreign countries. It is valuable, however it might be best left where it is. Shareholders have lost all wealth; there is little to recoup from redeveloping the mine. NZ Oil & Gas was the largest shareholder. It las lost most of its investment...maybe it ought to stay lost.
4. Industry value - The coal industry is important to Greymouth. The reality is that this is one mine. Maybe the industry would be better off developing a coal seam gas extraction industry. Clearly this ought to be done solely on a scale to supply electricity to the local communities through existing electricity transmission networks. There are still several surface coal mines in the area which will continue to operate. They present no significant risk to life.

Pike River Mine tragedy: The competency of management

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The more information that emerges about this mine accident, the more one is compelled to reflect on what plausibility could be the reason for the accident. An inquiry will make the final decision after hearing submissions, however after reading the latest news from the NZ Herald, I am going to raise several points:
1. The current CEO was appealing because he had a relationship with miners in the area. He was therefore appealing as a CEO candidate because he had the capacity to keep wages low. It is a small town, so a 'liked CEO' has the capacity to stop 'wage extortion' during a coal mining boom. This is a small town, so you want to appeal to 'old town' values right? Did this result in safety mistakes? Did he have underground mine experience in Qld?
2. The latest news suggests that the operations manager at the mine was "a former Deputy Chief Inspector of Coal Mines with the Department of Mines in Queensland" (source). This is a concern to me because you have a bureaucrat running a mining operation. A certificated mine worker has since convinced me that this manager was experience in underground coal mining and that he was very safety conscious. He has worked with him, and argued that I should not attribute blame to him. I have attempted not to do that because (like most), I am on the outside...merely highlighting plausible causes for the disaster. Gas and coal dust explosions are preventable. Its possible this could have been anticipated, but it must be acknowledged that even the best supervisors cannot completely avert poor practice because they must delegate responsibility, human error, someone has a bad night, etc. Taking work in NZ could ultimately be considered a step back in one's career, or maybe it was a retirement decision. The inquiry will make the decision...this commentary is only intended to assist any family ensure all bases have been covered.

So you might ask...how is the government to blame for this? Well, its a long straw, but aside from the points I have made elsewhere, the problem arises because of government for several reasons:
1. Government regulation makes decision-making arbitrary and overly centralised, resulting in bottlenecks in supply and demand. Govt makes markets less efficient.
2. Chinese huge energy demand which sees corporate entities making 'life-threatening' decisions for the sake of large profits, or distorting markets so others are marginal, can tend to result in 'short cuts'. The Chinese demand was because of political oppression by the Chinese 'government', and now suddenly they release the oppression, you get an economic and investment boom stimulated by cheap wages. The same thing happened in the Industrial Revolution. The distortions created slum conditions, which we see today in Chinese cities. Its not news so much in the West because there is no modern-day Karl Marx going to China and reporting on it. It will probably happy. Probably some rich liberal too; but that won't stop the 'maligned working class' from blaming all rich people and capitalism.
They will be too uneducated and unthinking to make any reasonable analysis; but it won't stop them from duly disparaging capitalism and capitalists with smear as to its impracticality, when it was always socialism and the socialistic distortion of capitalism. You will hear only smear about 'greedy capitalists'. You will not hear how this Pike River CEO was under tremendous pressure, knew the workers personally, regarded them as friends; nor the fact that he cried over their losses. Cynicism will rein and they will disparage people on dubious ideological grounds. That does not mean we should repudiate ideas. You don't throw the baby out with the bath water....as moral sceptics are prone to do...you remain a critical and engaged thinker.

It was just released that their has been a 2nd mine explosion at the Pike River operation on the West Coast of NZ. The Police Operations Commander has come out to defend his decisions. He argues that a 'team of experts' has made this 'logical' decision. One might wonder whether it was a 'majority' vote, and whether there were any objectors or critics of the strategy from within the team. Governments, in fact many decision-makers, are reluctant to convey that it was a difficult decision. It would therefore be good to know - who objected to the strategy and why? Have those objectors been vindicated? We might never know if their were any objections. Hopefully the media will ask the question, and if the media will have access to them. I suggest there may have been a poor decision-making process in place. i.e. A democratic one as opposed to an objective one. There is a belief that if you take a democratic vote among experts you will get the best decision. You don't! You get the smarter people stifled by political agendas and committee-talk. There needs to be a process of reconciling conflicting ideas in order to develop the best strategy. The process by which decisions were reached was not developed.

Monday, November 22, 2010

Short term accommodation in Auckland

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If you are flying to Auckland, New Zealand, then you will want a place to stay when you get here. If you are looking for a place to stay prior to boarding a flight, or before you seek accommodation, I recommend Proximity Apartments in Manukau City for several reasons:
1. You get a fully-furnished modern apartment for around $100/night - good for two people
2. There is plenty of after-hours parking around the building
3. You have an easy commute from the airport - its about 15 mins away, and its fairly close to the railway into the city
4. It adjoins the Westfield mall at Manukau City
5. The apartments have an after-hours service so you can check in late, or leave early.
6. There are a variety of restaurants and shops in the mall and in the vicinity. There are several nice restaurant/bars, or even a Wendy's and McDonalds outside of the mall.

For further information refer to this site.

NZ Property Guide Philippine Real Estate Guide Japan Foreclosed Guide

NZ - the land of milk and honey?

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There are a number of problems for NZ population growth...the appeal of Australia stands out as a sore tooth for a number of reasons. The most bleating obvious ones are:
1. NZ'ers love to hate the Ozzies, so it places a hole in their hearts to know that some of them are going off to the land of milk and honey. The land of persistent job growth and relentless balance of payments surpluses. Quite simply the land of higher incomes, job growth, housing prices rises, oh...and did I mention population growth. The population of NZ (mostly immigration) grew just 13,ooo for the year, even after including the better performances by using a rolling average. Australian immigration is growing 300,000 a year, though it might halve due to changes in government policy.

If this was the only reason to prefer Australia...
2. I would suggest Australia has the better record on crime rates...significantly so..but then I lived in the nicer parts of Australia. There are a lot of yobbos in NZ, a lot of speeding, alcoholism, bored youths, predatory natures, etc.
3. Diversity - There must be somewhere in Australia to suit your tastes. Of course it can all be about the amount of money it takes, and sadly Australian property is overpriced because of highly restrict land zoning regulations. It really is a form of slavery that the Australian govt makes you live in the city for jobs, and subjects you to rip off land prices by restricting land releases. Why? Because it wants you to be a 'good taxpayer' for the Commonwealth...to defend freedom in 'far flung' parts of the British empire. On this point, I am almost convinced Australia is not the place to live. Oh, and how could I forget the most evil organisation in the world after the MGB, the Fed, the IRS...yes, the Australian Tax Office. Its tentacles have been know to reach into a man's pants and pull off his testicles in one foul swoop on his manhood....in the pursuit of money. So you see...the choice is clear. There is no clear place to live until there is a revolution in Australia by taxpayers. I don't see that any time soon.

Don't get me wrong...NZ is a nice place to live. If I couldn't go to Australia, NZ would be a good 2nd choice...but for the lack of job growth, I'd probably not opt for an isolated island on the other side of the world (unless it was as big as Australia). If I was an American, I'd probably opt to migrate to the Mid-West, where the only crime is the stuff that stays in the family. If I was a Brit, I'd probably buy a section in the back-blocks of the UK with a commute to a city.

The other problems with NZ are the rising consumption takes rates which fall on retirees to a large extent, like foreigners. The other problem is the incessant winds which blow all the time.

This might be why I never stay in one country but seem to travel between a few. There is no single one good place in the world....you have to keep travelling or repress or the bad points. Most of you are repressors of course.....morally ambivalent repressors.

Saturday, November 20, 2010

Was NZ’s Pike River coal mine disaster a blunder?

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I am terribly suspicious of the decisions made culminating in the recent UG coal mine disaster on the West Coast of NZ.
Firstly, I tend to think the company is doing the right thing in terms of the rescue.
I don't know the specifics of the mine layout, but I tend to think mine gas concentrations are going to be lowest immediately after an explosion. The problem is that the ventilation units are likely damaged, so pertinent points in the mine are not accessible until they can develop a drill hole vent to pump air through the desired area. It’s a long wait...but perhaps they will walk out in the meantime. Maybe the 39 miners are injured or trapped; hopefully not fatalities.
Secondly, I am suspicious of the decision-making prior to the accident.
The mine operators ought to have had communications in place. This might point to the fate of the miners, an unfortunate locating of communications, damages to the communications equipment (unlikely) or to a failure by the operator to install such safety measures. This is all speculation of course...better considered after the rescue is completed.
This is why a rescued miner may have pointed to the need for mine inspectors in NZ...as is common in other countries. NZ seems to learn from its disasters. The reality is that NZ has a very small coal mining industry, so perhaps this cost saving was imprudent given the risks involved in coal mining from coal gas explosion/ignition. Basically its easy for coal seam gas to explode at concentrations between 13-45%CH4 (if memory serves me).
If communications were in place and working, and the trapped workers conscious, this could have determined whether rescuers should enter.
I am suspicious because the Pike River Coal publicity machine is trumpeting the “caringness” of its CEO. Seldom is a mine accident the result of an uncaring CEO. More often its caused by CEOs & executives who can't/don't see around corners, i.e. anticipate the dangers, or who place safety after more tangible and immediate concerns like profitability or meeting budgets. This mine was failing to achieve profitability. Were short-cuts taken? Did they promote a ‘caring local’ guy over a competent 'outsider' in order to keep wages down? After all, the local guy was 'friends' with the workers. Suspicious. If I was a journalist, I would be looking at his prior mine experience. Seldom is a miner elevated to a CEO position. One has to ask why? Financial motives? The reason why I say this is because it’s a small mining community where workers can easily extort higher wages...a 'friendly' CEO is the obvious antidote if you care little about safety. Of course safety is not the sole consideration. The question is whether financial considerations were overwhelmingly the big issue. The absence of a mine inspectorate/regulator creates the perfect storm.
The problem as I see it is that no one wants to speak badly of a company when the govt is implicated (as regulator), i.e. Mine safety personal/consultants cannot expect a job in the future if they start criticising company policy. Lax govt regulation is the likely culprit....though unions too could have done more as custodians of worker's interests. Govts are useless regulators..well useless at everything..Why we pay taxes??

Is the Keys government or NZ Oil & Gas (i.e. the largest shareholder in Pike River Coal) to blame? Hard to say..though if I was a journalist, I would be doing a lot of sniffing around whilst the workers are underground. It is not my intent to implicate the company, unions or others. I am developing a scenario. It does need more empirical evidence. I also tend to think companies have a lot of unreasonable burdens placed upon them, and it is middlemen like govt and unions which tend to precipitate these problems. These two agents extort money from people through coercion. They force companies and workers to do things which they would not otherwise do. If the government is to blame, one might be more inclined to blame Helen Clark's administration, since it had 10 years to do something. Keys is less implicated...just 2 years in power, and 1 year dealing with a recession. But he is an investment banker...sorry salesman, so he was never the person to fix the problem. But of course he will have a compelling reason now....after the fact.
There is of course a huge conflict of interest in government being the regulator and the law maker. This conflict is never resolved because it does not serve government to resolve it.

Tuesday, November 9, 2010

Telecommunications in NZ

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The Commerce Commission has released a report showing that NZ telecom charges are the highest among OECD countries. There are a number of problems:
1. The high cost of data capacity
2. The cross-subsidisation of 'local call' users
3. The requirement for rural customers using data only to have a landline as well, thus they are obliged to pay an extra $56/mth for a service they do not use.

Telecom and Vodafone do not compete much. We currently get the Telecom plan because we do not require a contract. We pay $112/month for 20Gb/mth capacity. The service is reliable enough, though in some areas you can wait for up to 2 years to get a connection. I had better options in the Philippines...a third world country. Australia is about 30% cheaper I believe, though it does depend on your plan and location.

Thursday, November 4, 2010

NZ - closing the gap

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The NZ government seems to have played down the chances of NZ 'closing the income gap' with Australia. The reality is that there are several issues which are driving the widening of the income gap, and there are several issues which will close it. The pertinent factors are:
1. Energy resources: The discovery of large offshore oil & gas resources in offshore NZ basins - give it 10-15 years, but it will eventually attract a lot of capital investment in NZ. There is the prospect of further discoveries being developed sooner in the Taranaki Basin, since this field is already developed. The small size of this nation means any significant discovery is going to have a significant impact on the country.
2. Steel processing technology will eventually result in NZ producing high-titanium/vanadium, high strength steel alloys, but the technology is not quite there. NZ does however have vast resources of titanomagnetite sands between Wanganui and Auckland. It will fight with PNG over market share, and that will be another 10-15 years as well.
3. Business outsourcing - NZ wages are 30% lower than Australia, and the AUD is 0.76 NZD, so NZ is well-positioned as a business outsourcing centre, offering better educated staff than Malaysia, China or the Philippines can possibly offer. The problem is telecommunications in NZ are very expensive, and capacity is tight. Accounting services have more potential. I do however expect such solutions to offer a better outlook in the future. Expect this market to start developing, though perhaps not immediately in VOIP solutions....as NZ is not competitive.
4. Food and timber processing - Of course NZ continues to offer opportunities for value-added food output. I wonder why I cannot buy canned lamb in the Philippines, or anywhere for that matter? There is a Chinese canned lamb. I love lamb! But beef tonight. Bibinba!

I would give NZ another 10-15 years, and then I think people will start flowing back here. I agree with the Labor government. As much as I welcome privatisation and cuts in government spending, free market policies are not going to close the gap. NZ is a small market, so there is no compelling reason to spend money here, other than those opportunities above. Even if you adopt low taxes, no oil company believes any future government will retain such an 'ideological' position, so they will always pragmatically spread their bucks. NZ reforms in the 1980s did nothing to attract capital.
At the end of the day, there are compelling lifestyle reasons to live in Australia which Kiwis will never escape. They are - Australia just has a superior climate. Sydney! I wear a t-shirt or no shirt for 9 months in the year. Try that in NZ! The other is space and culture. NZ is far better when I first came here in 1986, but its still a little on the slow side outside of Auckland. NZ has more crime, but not a big issue. Maybe the greater problem is that there is so little going on that crime and dolphin sighting is all that you can report....lest you think about the outside world. The shorter day and the wind. I swear I lose two hours a day living in NZ, and its often miserably windy going outside. Its not too cold, but the wind is annoying. Australia is blissfully 'cool and breezy'. Australia - paradise...on earth. Now I know why I only bought a summer house here!

Friday, October 29, 2010

NZ's Next Top Model....and the winner is Covergirl

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It is easy to get caught up in these reality TV shows. I tend to watch the talent shows, and lately it is NZ's Next Top Model and Australia's X Factor.
It is easy to forget that these shows are legitimate competitions. The reality however is that they are 'managed affairs', in as much as the entrants are selected on the basis of their marketability. It is not about finding the best model, i.e. The one who has the best skills for modelling, or the 'X factor' in terms of best commercial performance. Its about finding the person who best engenders the commercial interests of the production house.
With respect to NZ's Top Model, it is a very good production. But it has to be remembered that these shows are financed by sponsors, and in this case, Covergirl is going to be looking for magazine sales, or engendering makeup sales. How does it do that? Well....a good way would be to create the pretense that the 'competition' is a real competition. Its not. The production house, which is sympathetic to the values of the sponsor, is going to ensure that its interests are primary. Covergirl is looking for new sales, new markets. The best market is ugly girls with low self-esteem who want to think for a moment that they are beautiful in their looks. You could argue that being a Best Top Model is not about looks, but the reality is that such magazines are trying to subjectivise beauty such that anyone can aspire to it. Why? Because if beauty is subjective, the market is open to anyone...which makes everyone vulnerable, and in need of external validation.
By promoting Danielle, an awkward, self-doubting Hobo to the top ranks of the show, she becomes a 'cover girl' for a new market which never thought they had a chance. But also it has the slip-side of making pretentious 'stunners' feel a little vulnerable.
The reason why I think this show is a commercial stunt is:
1. Sponsors need to be appeased - their influence is greatest in the early stages of a show because basically they underwrite its production. This gives sponsors a lot of power.
2. Producers are doing their own casting - so they can pick winners from the start
3. Producers can influence the outcomes of the contestants merely with a few 'judgemental' words, knowing that they are insecure, vulnerable 16-19yo girls with elevated pretensions of being a 'top model'. For example on the last show, Colin says to some of the girls that 'the other girls did not think you would be in the top 3'. It sounds a bit crabby given that she was the most likely to win against Danielle ('the hobo') and Elsa.

Of course the show highlights the importance of presentation, beauty in the physical form, and it also highlights some of the physiological and psychological factors of human nature. These shows are interesting to watch...a display of culture, but one cannot take the results too literally. It is amazing what a bit of make-up and theatrical improvisation can do for a person...but then I guess that is the role of the show....to sell make up and home beauty. Our goal is to sell books...if you are reading..my job is done.
You can see the last episode of NZ's Next Top Model here for the next 14 days only.

The same factors can be seen in X Factor. The commercial variables are the same. There is no particular sponsor advanced, however there is a tendency to have a few 'unknowns' as well as a few proven artists like Altien Childs to keep viewers watching. The trick is to keep us entertained, and both programs do a good job of it, but it helps to retain a sense of reality. Let's now become a victim of crass commercialism.

'Buying NZ Property – Download the free sample readings!

NZ presents some of the most alluring property in the Western World; particularly given the greater easy of residency, the low cost of property, and the liveability of the country. In addition, there is no capital gains tax, transfer taxes, VAT/GST or wealth taxes in NZ, so rest assured that NZ property is tax-effective! Learn more now!

New Zealand Property Report 2010 - Download the table of contents or buy this 180-page report at our online store for just $US19.95.

Japan Foreclosed Property 2015-2016 - Buy this 5th edition report!

Over the years, this ebook has been enhanced with additional research to offer a comprehensive appraisal of the Japanese foreclosed property market, as well as offering economic and industry analysis. The author travels to Japan regularly to keep abreast of the local market conditions, and has purchased several foreclosed properties, as well as bidding on others. Japan is one of the few markets offering high-yielding property investment opportunities. Contrary to the 'rural depopulation' scepticism, the urban centres are growing, and they have always been a magnet for expatriates in Asia. Japan is a place where expats, investors (big or small) can make highly profitable real estate investments. Japan is a large market, with a plethora of cheap properties up for tender by the courts. Few other Western nations offer such cheap property so close to major infrastructure. Japan is unique in this respect, and it offers such a different life experience, which also makes it special. There is a plethora of property is depopulating rural areas, however there are fortnightly tenders offering plenty of property in Japan's cities as well. I bought a dormitory 1hr from Tokyo for just $US30,000.
You can view foreclosed properties listed for as little as $US10,000 in Japan thanks to depopulation and a culture that is geared towards working for the state. I bought foreclosed properties in Japan and now I reveal all in our expanded 350+page report. The information you need to know, strategies to apply, where to get help, and the tools to use. We even help you avoid the tsunami and nuclear risks since I was a geologist/mining finance analyst in a past life. Check out the "feedback" in our blog for stories of success by customers of our previous reports.

Download Table of Contents here.