Show me the Money: Money for Nothing & Everything free

Emmerson's take on Goff's cunning plan to win the 2011 Election.

On the money indeed.

Buy Every Bastard Says No - The 42 Below Story, by Geoff Ross & Justine Troy & more @ Fishpond.co.nz

C c c Darren Rickard 2011

Show me the Money: Labour hides borrowing & additional taxes

The political intrigue over Phil Goff's failure to accurately cost his election promises came to a head a few days ago at a Wednesday debate when John Key asked Goff to "show him the money".

Even the rabid left's John Armstrong is having a go at him over this serious leadership failure.

Goff had been found seriously wanting as his increased spending to buy an election win showed the flaws on the Labour election balance sheet. The increased debt exposure Goff that the Labour Party would put the country in at a time when debt used in the wrong way is looked at very suspiciously by our lenders and whoever leads us needs to tread the debt boards very carefully should we end up like Greece or the USA.

The billions of extra spending Goff has been campaigning on will come via borrowing from Mums and Dads in China and as there is still an unexplained gap after what Labour say they will borrow, Labour will do what they have always done and introduce a slew of news taxes on the middle classes and those "rich pricks" that Labour hammered in their previous 9 years in Government.

The only problem is there is still a massive gap in funding after the borrowing and funds raised from increased taxes and the only two conclusions the public can come to are that they will have to borrow more than indicated or what is more probable hit Kiwis with undisclosed new taxes or increases in current tax rates.

Phil Goff says he will show us the money today but his credibility must be looked at more than a little askance because one would have to ask why haven't these costings and important figures been calculated before promises were made? He says they have been but it has taken 2 days so far to produce his costings but so far not a sausage.

The public awaits to see with interest what this economic magician can pull out of his hat but judging on this latest incident should voters be putting their trust in someone with their hard earned taxpayer dollars whose maths would have 1+1 equal 3?

Buy Every Bastard Says No - The 42 Below Story, by Geoff Ross & Justine Troy & more @ Fishpond.co.nz

C c c Darren Rickard 2011

Investment Property Taxes a boon for the Stockmarket

There has been allot of talk about taxes in relation to investment property recently. There has been a government task force looking into the idea of capital gains taxes on investment property, principally a capital gains tax.

It appears our "business friendly" National Government are trying to shake down its citizens for even more taxes to fund the continued high spending of our Government.

I don't remember them in their pre-election campaigning that they were going to implement new taxes but be that as it may it looks likely some kind of tax on investment property is likely.

I don't agree with this at all, taxes kill economies and make Governments bigger and we know that aint good.

As I wrote last month the best thing to do to put investment property on an even keel with other classes of investments is to remove taxes from those other classes, not add another wallet numbing penalty to property investors.

Either way though if there are taxes applied to investment property, and I think there will be, this is going to be a minor boon for the New Zealand Stockmarket.

The withholding tax applied to dividends by Labour in 2007 further put stockmarket investors on the back foot and any move to even the score with property investment is a win for New Zealand.

The Nats probably wont raise taxes on investment property by a significant amount because of the obvious political ramifications, but any move that hamstrings the investment property market is going to be good for those of us investing in real productive companies that are either listed on the Stockmarket or indeed private ones.

About time us wise ones we got a break.

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c Share Investor 2009

Capital Gains tax a millstone for New Zealand Inc

A question of intellectual dishonesty, economic illiteracy and empire protection by politicians and their hangers on currently surrounds the topic of a capital gains tax on investment housing.

We all know why investment housing is so popular and does so well in this country. There are countless tax advantages that this form of investing has over every other investment class, not the least one being the lack of a tax on capital gains, so it is bleedingly obvious as to why every Tom Dick and Harriet has an investment property.

The lax of taxes helps make for a successful investment, any investment, a third form economics student will tell you that.

Stockmarket investing is taxed to the hilt, as is investing in your own business, as are your savings in a bank or in a retirement scheme.

We all know how badly these investment classes, and our economy have suffered as a result of high taxes, while at the same time investment property is favoured above all by having no State hand reaching into your pocket.

So you think I want to tax investment property to even out the score?

Hell no.

Here is something quite radical and perhaps a little outside the square. Why not drop taxes completely on all asset classes?

That way investors will have a true choice about which investment they might want to make based on its merits or otherwise and if they invest in a business directly or a business indirectly on the stockmarket or put money into a savings account, the money is more likely to go into something productive rather than an over priced investment house with phony tax advantages and it will lift the economy as a result.

Aint that what we need, especially right now?

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c Share Investor 2009

Cullen's move on Auckland Airport Tax plan anti-business

Stand back because I'm gunna blow!!!




Michael Cullen's retrospective tax changes over the AIA sale
effectively removes shareholders property rights

Additional reading on this story - direct links to article

Stuff
NBR
Radio New Zealand
Bloomberg
Southland Times



The arrogance, the stupidity, lack of moral and legal right and communist sort of garbage Michael Cullen is up to by retrospectively changing tax law to grab even more of New Zealand citizens and Auckland International Airport(AIA) shareholders money from them is not surprising, because we saw it in 2006 when the Labour government changed law in hindsight to make the theft of taxpayer money by them legal.

What is surprising is that Cullen and his mates around the cabinet table haven figured out or don't care about( I suspect they just couldn't give a hoot) the repercussions of their move: for business as a whole in the future, individuals and specifically the 50000 odd New Zealanders with shares in the airport-especially in an election year! Its just mind boggling.

We all know Cullen and his socialist mates hate private property rights and clearly business because here he is again stomping his little legislative pen and clipboard all over these rights.

That is, people have a property right in the shares they own in the airport and they have a right to sell them to whomever they wish, under the current tax laws which exist. Retrospectively changing the tax laws just because you can isn't a sensible way to oversee business because business needs to be able to function with surety of the current laws in which they trade under. They no longer have that in this respect.

By becoming involved in a transaction between its private citizens in this way the Labour Party have effectively wasted the time of all the parties involved. CPPIB , Auckland Airport and the shareholders involved.

Millions of dollars have also been flushed down the bog, because it costs to do these large deals. In this case it has cost shareholders like me money. Lots of it.

The interfering has wiped hundreds of millions from the capital value of the airport- down 13.5% or 38c to NZ$2.45- and therefore shareholders wealth and given notice to other overseas companies thinking about buying businesses in New Zealand to think again-if the government doesn't want it sold they will simply regulate in some way to stop it. It isn't your business anymore if you don't have the ultimate say about what happens to it.

Now investors know that Cullen and his minor party supporters have been against this sale from the beginning, almost 1 year ago. Winston "baubles" Peters has spoken about this many times and so has Cullen, Both early in the sale saga.

My question to Cullen is then, if you were against this sale from the beginning then why didn't you move to stop it at its inception? He certainly knew about the "tax issues" with the airport amalgamation but chose to sit on this harebrained half arsed intention till the very last minute.

He has also been aware that the announcement made today would have been consequential to the sharemarket value of AIA and has kept it secret from the NZX, CEO Mark Weldon's office and therefore the shareholders invested in AIA, and so should have informed the market alot sooner and alot less clumsier than he has.

I wonder if Weldon will be giving the minister a "please explain" letter? Doubt it.

The Canadian Pension Plan Investment board say they will "push on" with the deal and were aware of IRD approval when making their bid. I'm sure they didn't factor in todays turbulence though.

Finally, pissing off 50000 mums and dads when you have been nuked in the polls, your leader is melting down, and in an election year just isn't very bright.


Related Share Investor reading

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What is Auckland Airport worth to you?
Second bite at AIA by CPPIB might just fly
AIA new directors must focus on shareholders
Auckland Airport merger deal nosedives
The Canadians have landed
AIA incentive scheme must fly out the window
Government market manipulation over AIA/DAE deal
DAE move on AIA: Will it fly?

Disclosure: I own AIA shares

Share Investor 2008

NZ Herald: Airport deal not so sweet after tax break blocked

Canadians bidding for 40 per cent of Auckland Airport had offered a type of share that would yield tax breaks.

Additional media coverage of this story - Direct links to story

Stuff
NBR
Radio New Zealand

Opinion piece from Share Investor at end of the day.

By Grant Bradley , 26.02.08, NZ Herald

A multi-million-dollar tax break that would have sweetened a Canadian pension fund's bid for control of Auckland International Airport(AIA) was blocked in a surprise move by the Government last night.

The urgent measure relates to what are known as stapled securities, which allow companies to pay tax-deductible interest to shareholders instead of dividends.

Changes will be retrospective and the announcement was made without prior consultation with interested parties "because it is a matter of urgency since some companies may be contemplating the issue of the type of stapled stock in question", Finance Minister Michael Cullen and Revenue Minister Peter Dunne said.

The Canada Pension Plan and Investment Board (CPPIB) planned to issue stapled securities as a "tax-efficient" device as part of its offer to airport shareholders.

The Inland Revenue Department says hundreds of millions of dollars could have been caught up in the deals if the securities had become popular.

Policy manager Emma Grigg said the Canadian proposal had not been specifically targeted but plans outlined in the company's prospectus would be covered by the changes.

The CPPIB had early yesterday been talking up the chances of its bid succeeding after a change of tack by the airport board. Last night, it said it would not respond to the tax change announcement until today.

The ministers said the change would be included in the next available taxation bill and, once enacted, would apply to stapled stock issued or stapled on or after yesterday.

"If those instruments were to become common in New Zealand the amount of debt deductions against our tax base could increase significantly. The issue becomes particularly acute if the instruments are issued to foreign investors in New Zealand companies."

The change will also deal a blow to potential earnings for Auckland councils. Auckland City Council has a 13 per cent stake in the airport and Manukau City has just over 10 per cent. Although neither is selling its shares, both were hoping to gain tens of millions of dollars a year.

A market source said "anyone who thought they were voting for this to get a tax advantage should think again".

Paul Ridley-Smith of investment company Infratil, which opposed the Canadian bid, said it looked like it was back to the drawing board for CPPIB. It has undertaken to restructure the company by way of an amalgamation process - to unlock capital and make it more tax-efficient for shareholders.

"If the Canadian deal had been done as a single transaction - which is to bring in a new shareholder, new management and change the capital structure - we had absolutely no problem," he said.

"But with the Canadian deal the restructure happens after they've got to 40 per cent. So the question has got to be asked what is the overriding commercial purpose of the amalgamation. If it is predominantly to get a tax benefit, then we would think it wasn't going to get approval from Inland Revenue."

The CPPIB had not sought an IRD ruling on the amalgamation plan before making its offer.

Prior to the ministers' announcement yesterday, the airport's board recommended shareholders sell their shares. That was a reversal of its position in December, when it advised shareholders against accepting the partial takeover bid but by a majority of 4-2 maintained its recommendation to vote against the offer.

Board chairman Tony Frankham said directors wanted to ensure nobody missed out on any premium if shareholders voted yes to the offer.

CPPIB vice-president Graeme Bevans said the change of recommendation was "fairly predictable". "They're ... a relatively new board and this is a very difficult decision."

In August last year, Trade Negotiations Minister Phil Goff dealt a fatal blow to a Dubai Aerospace Enterprise takeover bid when he said the Government did not want to see key public utilities sold off.

Shares in Auckland Airport closed up 3c to $2.83 yesterday, off its year high of $3.50 struck in July last year.

Related Share Investor reading

NZX Press Release: AIA directors recommend shareholders sell
AIA profit stays grounded
Softening opposition to CPPIB bid for AIA
Directors of AIA bribe brokers not to sell
What is Auckland Airport worth to you?
Second bite at AIA by CPPIB might just fly
AIA new directors must focus on shareholders
Auckland Airport merger deal nosedives
The Canadians have landed
AIA incentive scheme must fly out the window
Government market manipulation over AIA/DAE deal
DAE move on AIA: Will it fly?

Disclosure: I own AIA shares


Links c Share Investor 2008

Global Warning: Tax Iceberg Ahead

It is like sitting on the bow of the Titanic while watching it hit an iceberg. We know it is coming but we don't yet know how big the iceberg is.

Let me help you out dear reader.

If one thought the budget was a killer to business and the economy and it clearly is: increased compliance costs, contributions to employees' savings and the two headed monster the inflationary petrol tax-the 3c cut to business tax still puts business behind- then you have got another thing coming.

The biggest thing missing from the 2007 budget was an indication of looming carbon taxes and costs associated with Labour's lunacy over Kyoto and the global warming myth.

It wasn't even given the once over lightly, in fact it wasn't mentioned at all.

In what will be New Zealand business' biggest challenge in generations, global warming taxes, Cullen is playing fast and lose with our kiwi companies simply because they cannot plan with certainty of the future.

These costs loom large in board rooms around the country, only the NZX board room is relaxed because they look likely to benefit from implementing so-called "carbon trading."

The costs to business and the economy cannot be overstated. Businesses, and eventually individuals who emit carbon will be taxed on those emissions. How much we don't know but what we do know is that these taxes will flow down to the consumer and put a bite on the economy with such force that we may never recover.

Like the 2007 budget, the only winners from carbon taxes will be Governments and an army of bureaucrats who will administer the taxes from yet another acre of new Wellington office space.

The two business sectors with the most to lose will be tourism and agriculture, incidentally the 2 biggest earners of foreign exchange for New Zealand Inc. According to those with a green tinge to their blood, including Sir Richard Branson, airline travel is one of the biggest contributors to Global Warming, with the shipping sector and distance traveled by those ships to get goods to market from this part of the world 2 targets for the highest taxes and red tape due to the perception of their "global carbon footprint."

Already New Zealand's agriculture industry has been given a wake-up call over "food miles" and Tesco in Britain discouraging buying of NZ produce because of the distance it has come. Commentators such as Rod Oram are foisted on their own Global Warming crusades, when they on the one hand advocate for GW and carbon taxes(Oram buys carbon credits to off-set his "carbon footprint")but on the other hand moan when the likes of Tesco actually use the argument he advocates against him.

The tourism industry clearly faces a bleak future if these new taxes take a strangle-hold. The further away a destination, the higher the taxes will be on airfares, airlines and a whole host of industry related business. New Zealand is as far away as one can get from the bulk of the worlds population and it doesn't take Einstein to figure out who the biggest loser will be.

We must not confuse the valid issue of polluting our neighbourhood and planet with the Myth of Global Warming. There has been a turning point in the belief of man-made GW from former believers in the scientific world and the focus should now be to get back to reality and impetus on the real issues around us.

GW associated taxes will kill our already shaky economy and the irony is that the worlds biggest and real polluters will be the beneficiary of our Government's stupidity.


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c Share Investor 2007-2009