'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.

Monday, October 31, 2011

Buying & selling property in NZ - and the currency decision

Share |
What is the outlook for the AUD:NZD? A pertinent question don't you think since so many Kiwis are looking to go to Australia? The press are of course trying really hard to convince New Zealanders to stay at home. Just like the churches they are presenting a lot of SCARY!! stories about Kiwis living on the poverty line in Australia.
Just in case anyone has forgotten. Australia is taking NZ's best workers, not its worst. Those on the poverty line are clearly people who didn't have a realistic sense of their own worth. This is not surprising of course. Australia is a competitive market, and NZ's are inclined to lack a good work ethic if they are not accustomed to living in a competitive market. i.e. A person coming from a country town, accustomed to spending 20 minutes talking to others at the local post-office will have an adjustment.

No, if you have useful skills, then you will find a place in Australia. The following chart suggests however that your chance to move your wealth over to Aussieland is quickly disappearing. The NZD seems destined to fall back to 0.68AUD in the next 6 months as the Australian economy regains strength.

NZD doldrums is of course good news for Aussies looking to buy property in NZ. NZ are eager sellers, whether to move to Australia, or because of the rural drift to the cities, or simply because the 'batch' is quickly turning into an investment nightmare. What is the rationale for living in NZ, or having a house here? Well, depending on where you buy, it could be easy an investment or lifestyle property. Land rates are padded with welfare here, i.e. $1800, so its best to factor that in. Retirement probably makes the most sense. There are many motels for sale or lease. My favourite locations are Rotorua, Wanganui and Nelson, and of course Queenstown if money is no issue.

Wednesday, October 19, 2011

Dialogue with Don Brash over central bank accountability

Share |

This is a Facebook conversation I had with Don Brash, former Governor or the Reserve Bank of NZ, and former leader of the National Party on the current economic crisis.

Andrew Sheldon talks to Description: posted toDon Brash

Don, do you accept (or better still, have evidence to suggest) that governments (say the US or UK) are too cozy with bankers. When you look at how the US has bailed out the banks rather than plausibly supporting the creditors, might this point to an underhanded relationship between the two...for mutual (dubious, unenlightened) self-interest. And should not have the National Party have anticipated this crisis a decade ago...I know I did with a great many others. Why did NZ, Aust, Canada central bank governors allow it to go on... Perhaps you only want to speak for yourself? But perhaps you could also speak generally.

ADDENDUM: My criticism of US government fiscal and monetary policy extends back to 2000, however I only started blogging in 2005 – and continued my criticism.

Top of Form

Like · · October 11 at 2:46pm ·

Don Brash

Andrew, no, actually I don't think the US and UK governments have had too close a relationship with the banks. The reality is that the banks are at the very heart of the financial system - both the credit system and the payments system. The governments of the US and the UK (and of course of many other countries also) realised that the collapse of their banks would have had an impact on their whole economies which would have been utterly disastrous, so they bailed them out. Should they have regulated them more tightly to avoid the banks getting into trouble? Don't get me started! I blame the collapse of the banks in PART on the policies of some of the governments, in part on the greed and stupidity of some of the banks involved, and in part on the very tight system of regulation which actually led many people to assume taht the banks were effectively government guaranteed.

You ask why did NZ, Australian, and Canadian central bank governors "allow it to go on". I'm not sure I understand your question. The banks in those three countries are among the most robust in the world.

October 11 at 8:58pm · Like

Andrew Sheldon

By the last part of the question, I meant in terms of weighing into US, EU, Japanese govt policy decisions, an independent central bank believing that the substantive financial markets which underpin their demand have a substantive interest in 'sustained growth'. The policies of these govts have undermined global growth...that affects every economy. Say for NZ, does not the central bank have a mandate to preserve growth, thus weigh into international markets which affect their outlook?

October 11 at 9:05pm · Like

Andrew Sheldon I appreciate our banks are fine...more concerned with the broader economy, and the unsustainable interest rates which lured in home buyers, causing injury....not to mention the effects in equities.

October 11 at 9:06pm · Like

Andrew Sheldon We might reasonably expect the IMF to be independent...but sadly their role seems to be compromised by their need for OECD country funding

October 11 at 9:08pm · Like

Andrew Sheldon IMF says very little whilst 9 of 24(?) OECD countries have debts over 100% of GDP.

October 11 at 9:08pm · Like

Don Brash Not really fair Andrew. I've read plenty of IMF Papers which are highly critical of the enormous debts of many OECD countries.

October 11 at 9:19pm · Like

ADDENDUM: So does this reflect on the media’s lack of interest in bad news? Why might that be the case? It was very years ago to find a journalist offering critical views on the economic outlook. One of the few was Max Walsh, Editor-in-Chief of The Bulletin (Australia). Is the editorial content of the media skewed towards good economic news…even though there was a lot of critical economic analysis around from 2005-2008 outside of the mainstream media.

Andrew Sheldon

True, sovereignty lies with national govt...so what about central bank governors...what stops them from being more critical of foreign central banks and govts? They are independent from govt supposedly, so no embarrassment...just political integrity issue. i.e. Would Simon Power get a job with Westpac if he had an unfavourable Commerce Dept policy towards the banks....well, I know the answer because bank fees are a form of extortion...the basis of a class action in Australia as we speak.

October 11 at 9:46pm · Like

Don Brash Andrew, you are certainly right that central bank governors are reluctant to criticise other central bank governors. But who would you like Alan Bollard to criticise at the moment if you had your way?

October 14 at 9:20am · Like

Andrew Sheldon Ben Bernacke, ECB gov, all govts for adopting regulation which distorts rather than protects; for sanctioning extortion or 'numbers' rather rationality as the basis of political discourse.

October 14 at 9:49am · Like

Don Brash

Not sure that I understand your argument Andrew. To the extent that central banks are preoccupied with maintaining the value (purchasing power) of their own currency, I would have thought that most developed country central banks are doing OK at the moment (as measured by inflation, which is the only basis for assessing whether purchasing power is being maintained).

I share your concern that banking regulation may have actually contributed to some of the banking system problems, but central banks are certainly not the only ones (or even the main ones) to blame for the problems in the banking sector. In the US, for example, a lot of banking system problems stem from political pressures since at least the early nineties for banks to make loans to uncreditworthy, and marginally creditworthy, borrowers.

October 15 at 7:32am · Like

ADDENDUM 1: Actually, governments have a monopoly over the initiation of force. It was the Clinton administration who deregulated the banks in the USA; thus we ought to blame there for facilitating the actions of banks, which was largely acting ‘legally’ despite a few exceptions.

ADDENDUM 2: Actually, governments should be preserving a stable or fixed amount of currency relative to growth so that purchasing power actually increases. i.e. The amount of their wealth increases whilst the value of goods remains stable. We currently have ‘flat’ or ‘non-trending’ asset prices, no income growth, and rising product prices. i.e. We have inflation, i.e. Erosion of the real value of goods. It will not readily show up because govt masks the impact of the more volatile factors, i.e. rent, fuel, food,; arguing that they are too volatile to measure. True, but in the long run, they should not be ignored.

How can you be sure of that? How do you measure economic activity efficiently?

Andrew Sheldon

If central banks were duly concerned with preserving - or better still increasing purchasing power (as we live to progress I believe) - they would take measures which achieved maximum, but sustainable growth. Notwithstanding the fact they are confined to monetary policy, as an independent agency, there is no reason they cannot have an opinion on fiscal policy, and offer another element of accountability. Rather than debase their currencies, the US central bank lowered rates to extraordinarily low levels, govts like Aust subsidised great, Fannie Mae was instructed to offer the poor loans, creating a great deal of debt, and only in the last 3 years have we seen debasement of debt with quantitative easing...but there is more to come...causing more inflation. It’s about pushing the trauma into the future. If govt would only stop distorting the economy, each would be able to achieve growth of 8-12%...not the 1-3% we are accustomed to. The idea that we can only grow at these miniscule rates is because of govt...look at the Maritime Transport Act..calls to update it in 1998...its now 2011. It will happen now immediately after the election. Meantime priority 'distractions' for govt - aside from earthquake - rugby, seabed issue. One gets the notion, govt is about putting out fires, placing defensive.

October 15 at 8:13am · Like

Andrew Sheldon

Ultimately, I blame govt for being politicians rather than statesmen. They live within the system, lacking the ideas to change it. The problem is not the central banks per se its the govt which sanctions everything they do...its the idea that people really have any influence; that we have participation, choice?? We don't. We have a pretence of choice. We have a pretense of rationality within parliamentary debate...when really its a 'numbers' extortion game legitimatised by 'participation'. Tell me what participation I had in any piece of legislation. If I make a submission, what option do I have to hear criticism of my submission? None. How am I to know if it’s been read? Can't. There is a short range agenda to stay in power which means 'slow change' rather than selling ideas because our elected MPs have not developed a coherent philosophy before entering politics. I'd actually say you are better than most. But when or if you get substantive influence, you will become inaccessible, and centralised govt and universal suffrage will ensure you are motivated by the wrong priorities. You will become like the NP and Labour - 'constrained' by the system. Banks are custodians...they are not acting in accordance with their fiduciary duties; though you are right, govt requires no compliance from them. Another problem is the unconditional expropriation of wealth by taxation. Unless a voter has the right to renounce their sanction of govt by withholding tax, they are slaves. Representative democracy is slavery; we need a meritocracy where reason is the standard of value.

October 15 at 8:24am · Like

Don Brash

Andrew, I'm afraid I don't have time (and I'm not even in Parliament yet!) to reply to all your arguments. But let me just, in defence of my fellow central bankers, say that central bankers should not be increasing the purchasing power of their currencies (that would mean steadily average falling prices, or deflation). If money is to be used as a store of value, and as a measuring rod, it is important that it neither decreases in value (as with inflation) or increases in value (as with deflation). Most central bankers acknowledge that the only way in which they can help economic growth is by keeping the value of money stable, so that consumers and producers can use the price mechanism to inform their decisions. You obviously fear that successive rounds of quantitative easing will cause inflation. Yes, it may do, but it certainly hasn't done yet, and I strongly expect those central banks which have undertaken quantitative easing to reverse that process at the first sign of inflation.

ADDENDUM: Whose fault is that Don. You joined the ACT Party just 2 months ago, and his is the only opportunity I get to talk to you, and when the questions turn a little hairy, you evade them. That is govt; you don’t need to be a parliamentarian…you think like one merely as a candidate. You are over-qualified…that is the problem.

October 15 at 2:14pm · Like

Andrew Sheldon

Don, there is nothing inherently bad about increasing purchasing power; that is wealth creation. Yes, you can match the growth in money supply to productivity to stabilise prices, but that is not what the Fed Reserve has been doing. It has been stimulating debt levels with unsustainable low rates of interest....now there is a great deal of defaults, so debasement or recapitalisation is necessary to avoid default of that debts, say in USA, EU, etc. Mass transfer of wealth (via extortion). The poor suffer the most. Measures of inflation are entirely selective and arbitrary...just look at MS growth over productivity or economic growth.....to that you say, QE 'might cause inflation'? Ask yourself why QE is necessary at all? Why did asset prices rise so high? And how inflation is avoidable? Inflation will inevitably cause debt defaults among those not propped up. You seem to think there is no causal relationship between MS and productive capacity? It is true strong wealth creation in China and the developing world is offsetting OECD antics...but the relative distribution of capacity is going to create a productivity gap.

October 15 at 4:10pm · Like

Andrew Sheldon Don, the evidence does seem to suggest inflation ahead...this at a time of subdued confidence. Read this inflation news from the UK, and I've seen similar from Australia....

ADDENDUM: Don seems to have stopped talking to me; so because he is focused on getting higher profile attention, I thought I’d bring this to the attention of the media, because they love a controversy.

Monday, October 17, 2011

How rich people waste their money

Share |
Does NZ have the spare cash to throw around? Can't its millionaires find a more practical project to advancing science or achievement.
Take this recent announcement in the NZ Herald. Some Wellington property developer wants to build the fastest vehicle in the world - faster than the one already going 1200kmph, and yet still finding no practical application. Why do we need another vehicle going even faster if we cannot buy a 1200kmph vehicle? The chalenge is not speed; its unlikely efficiency, as I'm quite sure there is a market for any such craft, even if its only a tycoon's play thing.
Winning the World Cup Rugby will likely make NZ'ers feel proud; but will it make a difference to their lives? Was it their achievement? No? Will it give them greater courage to be an achiever? Not really? They should be able to make any achiever a role model, so the All Blacks are likely only inspiration for other rugby players.
I discourage people from funding such a project. Maybe the crew ought to actually pursue greater advancements than a mere speed increase; and besides the 'cashed up' Aussies are already have a year up on us, since they have similar plans. See Australian land speed record.
What would be a real advancement would be a jet-propelled boat that is sized to ride over waves at those types of speeds without actually touching them. I have no idea if it can actually be done; but that would be a practical application because we really have no need for land-based jet craft; unless we are going to stick them in tunnels. This would actually make sense in NZ - given its elongated shape. The problem of course is that it would be a pretty low-capacity and expensive infrastructure to develop because only one craft could use a segment of it at one time, and it would have to be >500km long in order to offer benefits. No, I suspect aviation is the proper place for speed records; not the confines of tunnels, nor the 'perfect land conditions' of some salt lake in Nevada. This is just a waste of money.

Rio Tinto out - the extortionists move in

Share |
“Rio Tinto puts Tiwai Pt smelter on block” by Brian Fallow, NZ Herald, website, Oct 18, 2011.

This is an interesting move – Why is Rio Tinto selling off some of its aluminium assets? Zinc alloys more popular? Alumina reserves at Gove near exhaustion? Overpriced power in NZ due to a failed privatisation policy? Inability to build a hydro plant due to a poor regulatory regime?
NZ has the lowest average electricity generating cost in the world, but the mark-up of residential over industrial electricity prices is among the highest in the world. i.e. Higher than Japan or the Philippines. For an industrial company like Rio Tinto this is not usually a problem, as they have the financial muscle to build their own capacity. This is not so easy in NZ given the communities sensitivity to thermal energy. The National Party has said it is opposed to Helen Clark's policy of prohibiting new thermal power generation. The other problem is the structure of the electricity market. There is a very large resource of lignite in Southland...but clearly the National Party has created so much bad press about coal mining that I can't see Solid Energy having an easy time developing that resource. Its a very good lignite resource in fact...but there are other uses for this fuel, i.e. A Victorian university is developing a compressed fuel briquette.
Companies sell assets which are dogs or which are not a strategic mix because of their other asset mix or price outlook. Selling 1/3 of capacity means this is a strategic jettisoning of high-cost, low or no-growth capacity. That’s why its unstrategic. And yes, its hard to compete with China because it has subsidised electricity, and offers the cheapest conversion costs in the world….and I suspect there is large resources of alumina in Mongolia or Siberia….but that needs to be confirmed.
These assets are dogs....if you are an investor...do not buy them. NZ - if you want to avoid losing an export industry...think about electricity market restructuring. This will however bite into the govts hidden tax collection from privatisation....so it looks like these assets will probably be closed in years to come unless a 'mysterious' buyer emerges. The last ($500mil) upgrade to the NZ plant was in mid-1995, so the depreciated value of this asset must be close to zero....and this is a protracted recession.
The implication of this asset sale is - NZ will in about in 3-5 years have a spare 12% capacity surplus, so this means NZ generating assets are in many respects a dog for investors given that the country has bugger all industrial activity and population growth. Thus profitability will have to come from customer extortion. Trust me....you don't know how painful government can get. Consumer extortion in a small, stagnant market like NZ is the most lucrative way to make money; particularly if you function in a 'self-regulated' market.
The implication is - it would be silly for the NZ government to sell off its power assets for the next 5 years; and it would be silly for the NZ people to allow them to do it until they compel the Commerce Commission to fix the flaws in the NZ electricity market structure. The flaw is the structure of the market. With 70% essentially free hydro generating capacity, and electricity prices charged at the marginal price (set by thermal and wind capacity), NZ is paying the highest cost of electrcity, when there is actually very little demand. i.e. Why do generators need to charge so much - they don't need to build any more new (expensive) capacity. Prices are rising because executives cannot get bonuses until they can extort profits from residential consumers. This is why NZ needs an effective regulation system. Nothing about Labour, National, ACT or the Maoris give me reason to think any of them have the intellect to anticipate these issues.
Big business will realise....because they have smart analysts like me. Ok, not as good as me, but then few of them have as much respect for facts, nor have they studied philosophy, so public policy can be a 'no go' zone for them. Too much conflict. Morality...uuuhh!

Thursday, October 13, 2011

Are the Filipinos the cause of Bay of Plenty environmental damage

Share |
Once again Filipinos are under the microscope. Filipinos do not have the best reputation. When I started writing this article I was focused upon the Filipinos because that was the culture foremost in my mind. Living in NZ with my Filipino partner I long observed that NZ'ers do not share the world's negative perception of Filipinos. I assume it was because there were no young brides walking around with Western men 40 years their senior. Indeed this is the case. Most Filipinos in NZ are actually hardworking couples with children, who have no 'yen' for the old man with cash security. This type of lifestyle decision is more of an Australian, European and American activity, and of course the Filipinos do not have a monopoly on the practice.
The reputation of the Philippines is under challenge because of a number of incidents around the world. Consider these:
1. In 2010, President Aquino's soldiers conduct resulted in a bus load of Chinese tourists being assasinated by a soldier with a complaint. His indifference to the HK Chinese people caused the country to snub the Philippines.
2. In the last 10 years Filipino communities have taken advantage of mining investors in the Philippines by opposing such activity. i.e. All manner of extortion.
3. In the 1980s there was the Filipino nurse who charmed an Australian billionaire iron ore magnate, which caused a bitter feud with the daughter, the heir to the estate. The flamboyant Filipino was on TV showing Australians her wares.
4. In the 1980s there was incident with Imelda Marcos, the equally flamboyant first lady to Ferdinand Marcos, the corrupt president who stands accused of siphoning off billions from the Filipino taxpayer. She distinguished herself by claiming to have 3000 pairs of shoes; back in a time when materialism was unacceptable. i.e. When you citizens are starving, and the country languished in a power crisis.
5. About a decade ago there was the famous Bre-Ex scandal, in which a Canadian mineral explorer had claimed to have discovered an immense mineral deposit in Borneo worth many billions. The stock price of this company soared to exorbitant levels before crashing when it proved to be a fraud. The Filipino site geologist committed suicide by jumping from a helicopter into the Borneo jumgle. My guess is that he wanted God to decide his fate. Who knows how far the plane was off the ground. I suspect he was reaching for a tree.
6. Having lived in the Philippines, I can tell you that Filipinos are not the most honest, hardworking people in the world. The reality is that they tend to meet the best of them in the West because they are the aspirational ones who want to get out, and are prepared to work hard for it. In Australia, there is the 40-year age gap for some wives, but even still, many of these partners are dedicated to their husbands. Are they sham marriages? Hmm...only to the extent that they are defined by superficial or concrete values like money or security. Its actually not so different for many Westerners. i.e. Westerners place a high value on their partner's wealth.

Those seamen on the Ship 'Rena' were mostly Filipinos, and its probable that when the captain was having a birthday, they were, as utter 'collectivists' celebrating with him, with little thought to the impact of their neglect. This is what many uneducated Filipinos (employed as cheap seamen) are like in life; which is why as a matter of cultural prejudice, I would not leave a Filipino in charge of an important vessel. They are too readily influenced by their peers, as they are a friendly, affable people. They have an utter disdain for responsibility, and given the corruption in the Philippines, you can readily correlate such actions with their religious disdain for humanity (i.e. Original Sin) and thus their lack of responsibility.
In an industry with a lot of Filipino seamen...the solution is surely just to ensure that the Captain and his immediate subordinate are not from the Philippines for any ship over 10tonnes in weight. That is the cultural context in which they are raised, and their education system is not so great that we might expect otherwise from them. This job appeals to the uneducated.

I love Filipinos; my partner is one; I very much care for her family, but I have so much life experience to tell me that I would not make one the executive of a ship. This does not preclude Filipinos proving me wrong in some other area, but this is a level of safety I'd prefer so that I can preserve my love of the Filipino. You would not want an Indian attending to your needs as a call centre agent; you do not want a Filipino running a ship. Its as simple as cause and effect. Understand this, and they will realise that Filipinos ought to stay below the bridge; at least until the Philippines changes its cultural or educational context.

Reflecting further I have come to think that perhaps more problematic is the failings of the execute team in the Greek company, and its culture, which we might probably blame for the currency and economic crisis hindering those southern European countries. Indulgent Greek executives managing indulgent middle-managers. Surely a recipe for disaster.

Then we get to NZ, and we have the NZ authorities fumbling around for 4 days because there was inadequate preparations for this type of event. NZ is by no means a high-traffic maritime trade market, but basic equipment for transferring fuel did not work. Another issue is whether the Minister for Maritime Services asked the right questions or was mislead about the state of preparedness at Maritime NZ. These questions have still to be answered. Seldom does an accident arise because of the failings of one person. There is usually a number of persons who can raise questions but don't. Often this causes a 'gap in responsibility'. Sadly, the persons getting the blame seem to be the one's least able to answer back.

Monday, October 10, 2011

John Key has peaked....ACT Party to pick up seats

Share |
John Key lost a great deal of credibility over the weekend, as he was caught misleading the NZ people over a statement made by a credit ratings agency. He was wrong to have used the statement in the first place. More so, because the statement that a ratings agency would downgrade a Labour government is simply wrong. Seriously wrong. Of course it would depend on the context - most importantly the Labour government's handling of policy and the dynamics of the global market itself.
Until now John Key might well have been known as 'Honest John', much in the way of 'Honest John Howard', but as is always the way, 'Johns' are inevitably proven to be liars....or if you want to be kind, "good pragmatists". He got away with it for so long, because he is well-prepared, and he does always have the 'right' thing to say. It is fair to say though, in such times, he is probably tired...there is a lot going on, and he was destined to fall out of his honeymoon period.
His lack of candour did not help. This is unlikely to result in Labour picking up votes; but the question is, can Don Brash make a great deal of difference for NZ in the election for the ACT Party.
In defence of John Key....he cannot be considered any more dishonest than all other politicians. Its really not so much the politician, but the system that drives them. Inevitably there are going to be few if any politicians in this system who actually end the extortion, the tyranny of democracy, because it serves their practical interests, and they don't have the intellect to reform it. They are salesmen, not statesmen.

Sunday, October 9, 2011

ACT Party only hope for good government

Share |
It is indeed interesting that the ACT Party is grabbing the headlines - seemingly to many for all the wrong reasons. But if you reflect on their discourse, its actually the only honest politicking in town. This party, I believe, is the foundation for the only credible political party in NZ. There are several reasons for believing so:
1. They possess the rudiments of a philosophy for a non-coercive state that recognises
a. The primacy of personal sovereignty, both in respect for rights,
b. The independence of their representatives to speak their mind.
2. The nature of the NZ political system which actually allows new parties to gain standing; at least if the media is so kind to give them some profile. The MMP is a blessing; at least for a poor 'democratic' system.

The problem remains however that those minds are poorly developed. i.e. They politicians have been too busy being pragmatic money makers or influence peddlers, that they have failed to do their homework. In fairness, it takes time. I have been writing public policy ideas for 30-odd years, and I'm still 80% complete on about 15 of a 25-book treatise....so I feel their pain. I just hope the voters have more empathy for their plight, and recognise that it is better to vote for a party that has some principles that include respect for facts and principles, as opposed to salespeople like Goof and the 'Keys to the city'. Sorry Goff and John Key. I can't recall Goff's first name. Maybe its in his policy statement. I'll wait for it because he just might be changing it to appeal to more voters.

NZ is so important to the world. NZ was one of the first countries to adopt universal suffrage for women. This was a bad policy development because it affirmed democracy; however it did highlight the power of being first, and having a political framework that can be changed. Look at the US and Australia, and you can see how far change can be to come by. This is why changing MMP would be a massive mistake. It would also help to have another competitor in politics; particularly one which will raise standards for political discourse, party membership and participation. Anyone who has joined a political party will know that there are effective gatekeepers restricting membership to the major parties.

Monday, October 3, 2011

Black gold in NZ - we just need to find it!

Share |
It is good to see the NZ government promoting oil & gas exploration. My opinion is that they are not doing enough. Here is an NZ Oil & Gas Presentation for 2011, which provides a good overview of the NZ industry. There are several points I would make:
1. The effective tax rate on oil & gas production is 20-25% of profits - based upon the 20% royalty and a nominal income tax because although the tax rate is 28%, any discovery resulting in production is only going to be realised after capital has been recouped and a scaled up exploration and development program has been advanced, i.e. Don't expect much income recovery.
2. There is a significant income for NZ from local, competitive energy supply, though oil is likely to be processed in Australia. There will be a lot of jobs and engineering work.
3. The NZ government ought not to wait for these private companies to give the country attention; it ought to expedite their own exploration efforts. i.e. Spend $50mil over the next 2 years contracting geophysical surveys over the most prospective areas. This will give a better idea for future exploration, as well as attract private interest. Establish a state oil company and seek private equity so that there is a 'bidder of last resort', and this enterprise ought to be sold off when the market for risk capital arises, or the risks fall.

The motivation for this approach is:
1. NZ has yet to have a significant oil discovery. Until that happens, NZ will not be taken seriously
2. NZ should not be letting foreign nations decide its fortunes
3. NZ needs to place some faith in its oil and gas potential
4. NZ needs to recognise the huge potential of its offshore areas - they trump the offshore mineral potential, and yet the governments primary focus is on these areas. They are getting all the political focus.
5. NZ is in a global recession. Commodity prices are high, and NZ needs to invest in income generation. There is no better area to do this than oil and gas!!!
6. NZ could have a $1 trillion future fund to match Australia's in 2030 if it appreciates its offshore oil potential

Saturday, October 1, 2011

NZ voters - between a rock and a hard place

Share |
NZ is being offered compelling advice on how to vote for the forthcoming election - Nov 2011.
The problem with any such advice is that it typically entails some form of moral relativism. Notwithstanding that some voting systems are better than others, if they entail voters choosing some representative, and not having the discretion to remove them; or if their representation entails them having the legal sanction to impose some arbitrary law upon you, then you live in a tyranny of the majority. The founding fathers were concerned about it; their concerns were well-founded; their counter-measures proved inadequate. The greatest threat of tyranny comes from the systematic arbitrary actions of government; most often sanctioned by some passive, uneducated, repressed majority.
Just like the Australian referendum entailed the govt deciding what voting options you should be given; the NZ parliament will decide which system is right for you. Rest assured, all possible options it offers will retain their entrenched majority. i.e. There will be no option for any meritocracy or meritocratic democracy, whereby reason is the standard of value. Why? Because principles held in context are antithetical to the major parties desire to extort wealth and legitimacy from an adversarial framework that ensures neither side gets what they want. Its all a soap opera to keep the two main parties in power. Never mind that their centralisation of power, their arbitrary laws shackle the productive capacity of the economy and keep a great many people at a subsistence living standard.

My choice is not to participate in a system of extortion. I have only voted once in my life in Australia, and the reason was:
1. Coercion: Because an electoral officer came to my door and threatened me with an ultimatum. In Australia, there is a $50 fine for not voting; but I've never had a payment demand. I guess we have a benevolent dictatorship in Australia. Can you think of worse punishments? Yes, taxation and the programs it finances, which actually perpetrate systematic injustice.
2. Education: Accepted that I should actually vote once so that I could see the process close up. i.e. Stare a ballot paper in the face. I actually participated in the illusionary process of supporting a local libertarian in election, knowing full well that voters I attempted to convince were not accountable for their views.

'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.