Wheres the Love?

Government cost to business hasn't been ameliorated by today's quadrangle of
State interference that kicked off, appropriately, on April 1.


I cant help myself talking about it, politics is intrinsically linked to investing and business and in New Zealand our economy is hugely influenced by what the government of the day does to it more than most global economies.

The introduction and trumpeting today by our Labour government of 4 things that "they are proud of" that will "help business" has less to do with helping business but more to do with election year and keeping control over the economy and its participants.

The much ballyhooed 3% cut in corporate tax rates, taxpayer handouts to business for research and development, employer contributions to Kiwisaver and the lift of the minimum wage to 12 bucks all run against each other in their purpose and execution.

The over hyped tax cut and R & D subsidy for our corporates hides the fact that Kiwisaver, the associated paper work and the lift in wages easily dwarfs the meager 3% cut already.

Include all the other government imposed costs to business over the last 9 years, like higher ACC, energy and carbon taxes and nonsense like employer funded maternity leave(what is wrong with the family paying, a novel idea I know, but just an idea) and an extra weeks leave for workers and even the blind, deaf, dribbling and Labour voters(OK maybe that is a stretch) can see how far behind business is.

The tax cut would have to be at least down to a 25% rate to get business back to where it was in 1999, in terms of costs and return of capital.

That way, business could afford to fund R & D from cashflow instead of another army of extra State funded bureaucrat's handing out taxpayer money to those they see should get our money-I mean these people picking business winners? I doubt many of them can remember their PIN numbers let alone pick good businesses.

What is missing from today's election focused "take more it and give some back" approach to business is a bold statement to business, especially small business, the back bone of this country, that the country values your contribution and we are going to reward your entrepreneurship.

State attached funding via R & D subsidies and other quasi government welfare schemes, extra business expense and paperwork isn't a good way to show that we love business.

I fear the present administration doesn't like the independence and confidence that self employment or owning your own business brings and are doing everything they can to inextricably link business owners quest for economic freedom by weighting business and therefore the economy down with cost and bureaucracy.

A 3% company tax cut isn't going to cut it for those hard working individuals who own companies and in fact bypasses those who are sole traders entirely.

Its time to show business we love them.

Not the opposite.


Related Political Animal reading

Labour's State Control Out of control

c Share Investor 2008

Blue Chip's Mark Bryers at top of shaky pyramid

Mark Bryers, architect of the Blue Chip pyramid
scheme, in better times.

Securities Commission - What we do
Commerce Commission - Fair Trading Act
Bryers has clear conscience - Stuff.co.nz


From the Blue Chip website (more)

At Blue Chip, everything we do is about helping our customers to build the future they want. Here are some of our clients’ stories which explain how Blue Chip has helped make a difference".

Gordon and Margaret Taylor

"At our stage in life we need our investments to be making money - not losing it!"

The column inches given over to discussing the Blue Chip fiasco would rival the length of a million toilet rolls stuck end to end and reaching to the moon and back.

Like alot of financial collapses though, investors or the public don't seem a hell of a lot wiser as a result of all the chatter.

In Blue Chip though, what is clear is that Mark Bryer's and his management built a pyramid scheme where he was at the top while his investors pumped cash into keeping him there.

Like every pyramid scheme of the past the only people who make money are those at the top and those that get in then get out first. Bryer's is still worth more than NZ$70 million according to the National Business Review.

These arrangements can go well when economic conditions are good but in this case, when the "asset", real estate, being invested in starts to lose its over inflated value, those at the bottom of the pyramid are going to lose.

Many have lost their life savings after either being greedy, trusting or naive. I recall going to an investment day at the Ellerslie Racecourse some 4 years ago, all the banks, share options people,brokers, finance companies, gold sellers etc were there.

So was Blue Chip.

While many of the above mentioned were quite "pushy" in their sales patter, I distinctly remember the Blue Chip people meet my quick gaze at their stand and from then on the push to buy was relentless, aggressive and quite slick-and their lawyers were there!

I felt decidedly uncomfortable with everything about their pitch but can understand why some caved into their charms.

But I digress.

The fact that property deals were arranged so that overly large deposits on overinflated unbuilt housing was paid directly into Blue Chip coffers and not into the normal trust situation and signed off by buyers after getting "advice" from Blue Chip's own lawyers, should at least raise the ire of the Securites Commission who have so far been deathly silent on this matter.

In my humble opinion, at the very least the Fair Trading Act has been breached and action needs to be taken. The Commerce Commission, who agonize over the likes of The Warehouse sale saga haven't made a public statement. The Fair Trading Act(1986) basically states that you cannot hide or be untruthful about what you are selling or be devious or sly in hiding the nature of what is being purchased; i.e. small print is not an out for the dodgy seller and it should have been crystal clear about what those Blue Chip real estate buyers were signing.

Like others have been saying though, I suspect we have only seen the tip of the pyramid uncovered, and just like an iceberg most of what lurks underneath is looking decidedly crooked.

I fear though, that Mark Bryer's and his merry bunch of tuggers at Blue Chip will get away with this errant behaviour and not even get a lick of a taste of the anguish that they so clearly deserve, and their former clients are now suffering from.

It is time for the talking to stop and action to start, lets not let another economic vampire go free.


Related Share Investor reading

New Zealand Financial Oversight bodies fail Blue Chip investors
Money Managers Saga-3 story wrap
Money Manager's First Step gives investors the middle finger

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c Share Investor 2008

Fitna the Movie: Dutch Politician's film about the Quran(UPDATED with replacement video)

The mad Mullahs, junk Jihadists and irritated Islamists have threatened death on the staff of LiveLeak, where I posted a copy of the Film "Fitna" on Friday ,( go here and click on video for explanation by LiveLeak) and they have removed the film as a result.

The making of the movie, which tells it like it is, has been widely condemned by Muslims around the world but its the thrust of the message that Muslims have for the West that lays largely intact and free from similar condemnation by those same people.

That the non believers are infidels and must be wiped off the face of the earth.

Geert Wilder's film had been  generously posted on youtube but has been removed because of pressure from Mad Islamists.

Luckily I have found another copy at Clipser and posted it again. Cross your fingers it doesn't get taken down .

Film originally posted on LiveLeak.com

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LiveLeak Video
Reaction to Muslim cartoons defended by some
Cartoons depict Muslim faith for what it is
Jihad and Understanding
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c Political Animal 2008

Earth Day: Turn on,tune out, buy some candles

In the interest of sanity,reason, intellectual honesty and beating Al Gore to a bloodied death with a chunk of Antarctic ice smuggled into the country up the arse of a whale sympathetic to my cause, I propose a ying to the preposterous yang of something called "earth hour" which starts in New Zealand first at 8.00pm (NZ time).

My proposal is this. At 8.00pm sharp, when the dolphin loving, Volvo driving, mung bean eating, bearded female, non smoking, non drinking, Leo Dio loving, vegetarian, hairy arm pitted, sandal wearing , finger pointing, lesbian school teachers are sitting in the dark with all their lights out for an hour, playing with the insert appropriate expletive here next to them, I will turn on every light, appliance and electrical device that I can lay my meat eating, chain smoking, 6 litre V8 Holden driving hands on... for two hours.

Even if this Global warming-or Climate Change, as they are now calling it,because the planet is actually cooling-was true, turning the lights off for an hour is actually what is going to happen for real if these climate change junkies get their way and have windmills dotted all over the place and they stop us from using lovely black coal, gas and oil to keep us alive. This is their intention.

In New Zealand, David Parker, Minister for "Climate Change" , bogey men and tooth fairies, proposes that we only build "renewable" power sources from this day on and forget about real sources of energy like hydro and gas.

We do however export coal to other countries and import the same from Indonesia, do those carbon miles get you a new power station when you get to a billion points?

I'm relaxed now in the knowledge that I am going to do my bit tonight to save our collective sanity. If you are flying across Auckland's North Shore, I think you might be able to spot me.

I will be the one with my feet up on the Brazilian rainforest timber table, in the living room, watching BBC4s "The Great Global Warming Swindle", the house humming, with a power surge so immense, I will be able to supply energy to all those lesser folk in their houses with all the lights turned off.

Do the earth a favour then, engage your brain before turning off those sparkly, modern, gas and oil fired wonders, your lights.

Related Political Animal reading

Unstoppable global warming
Global Warning: Tax Iceberg Ahead
Kyoto critic comes to town - Sunday Star Times
Carbon Credit trading puts Global markets at exteme risk
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