Global Warning: Tax Iceberg Ahead

Originally posted at the Share Investor Blog in June 2007 the piece below is also strongly politically slanted so I reposted it here. As stockmarkets take a dive in 2008 and global economies look increasingly shaky, the carbon taxes that Labour will foist on us are going to bite.

This is on top of increasing mortgage rates and runaway inflation fed by out of control Government spending over the last 9 years.


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.


C Share Investor 2007 & Political Animal 2008

Nandor Tanczos remembers where his bread is buttered

Tanczos ties a knot in his hair to remind
himself where his head is.


Forgive my cynicism, but today's news that the dread-locked drugged out loser MP Nandor Tanczos is leaving parliament after three terms isn't really a big surprise. After three terms MP's are entitled to 80% of their salaries for life!

Tanczos was voted out of Parliament in 2005 but sneaked in on a list seat.

I personally cant think of one positive thing Tanczos has achieved in his 9 long years as a member of the Green Party and his long telegraphed retirement is a huge relief to voters and Green supporters alike.

Indeed, when given a chance to speak on a radio piece today he said "...he had achieved allot..." followed by a list of the things he had achieved.

No entries were made on Tanczos own list(perhaps his memory had been affected by something).

The hot air coming from his marijuana use and hair brained outbursts on so-called global warming are his main claims to fame and it is clear that his debates in parliament were affected by the green stuff, with frequent lapses in speech and grasping for memory and words to use.

His support of bills such as the anti smacking legislation, removal of the Privy Council, The Electoral Finance Act, legalisation of prostitution and "gay marriage" and anti-smoking laws show how dangerous this collective has been in terms of the destruction of some the pillars of New Zealand Society when it comes to citizens freedoms, rights and moral structure.

Let us bid a fond farewell to master Tanczos and try to forget his time with the reigns of power.

It can be certain that he already has.



C Political Animal 2008

Contact Energy looks bright during dark times

Electric companies are good
buys during times of turbulence.

With most media talking about the NZX and global indices's taking a bath since 2008 began, I thought I would take the initiative to write about business rather than the headless chooks that are dumping their stock, even though I have commented on the sad state of affairs of the current market tumbles.

Given that most stocks on the NZX have been routed recently there are some relative "bargains" worth a second look.

One that springs to mind given the very hot weather we have had in the North Island and the relative dry that the South Island has been experiencing is Contact Energy[CEN].

Contact's share price has been dropping from its high of NZ$9.70 towards the end of last year down to $7.97 today and is somewhat of a hedge against the turbulent times that we are currently experiencing.

Its profits will not be as negative as other consumer stocks in an economic downturn because people will still be using power and Contact is well placed in this respect.

It posted a full year profit to June 30 of NZ$239.6 million and is expected to report a net profit of NZ$220.8 million in the current fiscal year according to Reuters.

As I mentioned earlier, the extreme hot weather in the North Island, specifically in Auckland, where Contact has a large number of customers among its 650,000 odd, the air conditioning is bound to be running at full tilt.

Coupled with this, the dry Otago weather is good for Contact as Hydro power, which is the benchmark for power prices, will be more expensive to produce and cost consumers more but Contact has the edge because it has a large number of non hydro power stations, most notably their Otahuhu gas fired power station, and its geothermal belt around the centre of the North Island.

While there are a number of negatives the company faces, increasing gas prices and availability and the shut down of their New Plymouth power station, costing Contact $25 million in lost profit for the full 2008 year, the positives distinctly outweigh these negatives.

The probability that Contact's majority Australian owner, Origin Energy, will make another bid for the company is also another reason to pick up some of this stock because they would have to pay well north of 9 bucks to get it.

The sureness of a continued good cash flow and profit during uncertain economic times makes Contact worth a second look and the share price is at a more reasonable level for investors to make a good long term profit once some certainty returns to global sharemarkets.


Hopefully that will be soon.


Essential Links

Contact Energy Investor Centre
Origin Energy Corporate Website


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c Share Investor 2008

Anti smacking law puts young boy at risk

The New Zealand Labour Party's chickens have finally come home to roost in a monumental way. The removal of section 59 or the "anti smacking bill", as it has become commonly known, midway through last year, has had another casualty, perhaps the worst one so far.

A Christchurch father who disciplined his 3 year old son who put his younger brother at risk, and was subsequently injured, was surrounded by six police officers minutes after a teacher(who would have guessed) witnessing the flick of the ear by the father informed an off duty female cop.

The father has been left with a warning by officers and a "black mark" noted on police records for attempting to keep his children safe from harm.

Apart from the obvious overkill by the six police attending and the stupidity of the off duty officer and teacher, the trauma that the 2 kids must have gone through seeing their father subject to extreme police harassment cannot be overstated.

The father's children will be getting a lesson from the whole incident that their dad has done something wrong, and that the lessons that he is trying to teach them are not to be believed.

When you undermine a parents authority in such a public way you risk that parents ability to bring up children in an appropriate way and ultimately keep them safe from harm, be it physical, psychological or emotional.

The politicians who trumpeted this sleazy law, Sue Bradford, Helen Clark and the various state bureaucratic heads and b grade celebrities, with the moronic support of the National Party are embarrassingly silent about this latest turn of events.

Those in support of the bill said that nothing like this would happen, it has, and after all, the sensible and intelligent amongst us we know it was designed to stop what this father did.

Those that supported this law change unflaggingly, should be voted against in the 2008 Election.

Labour, NZ First, The Maori Party, Progressives and Peter Dunne's Motley Crew do not deserve your vote on this law change alone.

John Key must be true to his word and repeal this change to sensible parenting and put the control of parenting back where it belongs.

In parents hands.


Related reading on Political Animal:

Trevor Mallard's Anti Violence Advert


C Political Aminal 2008