Times are tough for renters. Rents are rising faster than just about anything else right now, and have been doing so for some time. The previous government did make a few changes to make life more difficult for landlords, but the current government is going all out to improve the lives of tenants. As is always the case, the law of unintended consequences kicks in at some point, and that well-meaning government policy is now making life much harder for tenants because those policies aimed to help tenants are in fact forcing landlords out of the market in droves.

A newspaper reports: quote.

Renters are spending an average of $30 more on rent each week compared to a year ago, with the National Party blaming Government policies that are hitting landlords.

In some regions such as Wellington, figures from the Ministry of Business, Innovation and Employment show that rents have jumped by nearly $50 a week compared to a year ago, meaning tenants are paying close to $2600 more a year in living costs.

The National Party says it is a far greater rate of increase than under the previous Government, when rents rose by an average of $13 a year. end quote.

This government fails to recognise that private landlords are providing an important social service for free. Instead of the constant landlord bashing policies, the government should be providing incentives to landlords, such as subsidised insulation. But no. Landlords are fat cats and must be punished at every opportunity. quote.

“This Government prides itself on being kind, but these rent rises will really be hurting people, especially at the bottom,” leader Simon Bridges said.

When the government changed last year, the mean weekly rent in Auckland was $536. It has now jumped to $555.

But the biggest rent rises are in Wellington, Hawke’s Bay, and Manawatu-Whanganui, where rents rose by just under $50 in the last year. In National’s nine years in charge, rents rose by an average of between $6 and $10 a year in these spots.

Rents rose at a greater rate in all regions except Northland and Christchurch in the past year compared to when National was in charge. end quote.

And there is more nasty stuff on the way for landlords, with the requirement of the installation of fixed heating appliances and for pets to be allowed without landlord discretion. Having seen what a cat or a dog can do to a property if they are not properly controlled, I think that would be a deal breaker for me. The landlord owns an asset which the tenant is free to wreck. How this can ever be seen to be good policy is beyond me. quote.

Bridges blamed a series of Government policies which penalised landlords.

The Government has banned foreign buyers, introduced stricter standards for insulation and heating, got rid of “loss ring fencing” for landlords, and extended the period which investors have to pay tax on resold properties from two years to five years after purchase.

Bridges said the measures had a cumulative effect, forcing landlords to either lift their rents or get out of the rental market – reducing the rental stock. end quote.

There is an error in the above quotation. This government has not ‘got rid of loss ring fencing for landlords’. It is introducing ring fencing of losses. quote.

The rent rises would hurt lower income tenants the most. He noted that the number of hardship grants had risen by 54,000, or 19 per cent, in the past year.

Ministry of Social Development data shows that this increase is mostly due to greater demand for assistance with food. end quote.

Yes because, once the rent is paid, there is no money left over. It’s obvious when you think about it. quote.

Housing and Urban Development Minister Phil Twyford said he was concerned about rent increases, but said it was due to inaction by National when they were in power.

“Reserve Bank research shows that rents are driven primarily by supply and demand, not landlord costs. Our Government inherited a dire shortage of housing around the country after the former government ignored the housing crisis.” end quote.

Nine years of neglect, eh, Phil? quote.

“National saying that landlords are selling up is simply scaremongering. Corelogic data shows that landlords purchased 38 per cent of properties in October, which is consistent with the last two years – there has been no change in landlord activity.” end quote.

This is my favourite bit. It shows what an idiot he is. So the number of investment properties bought has not changed markedly but how many have been sold? I think you will find that a lot of former rental houses have been sold in the past 2 years. Are all those investment properties recently purchased being rented out to local tenants, or are some of them to be rented out on AirBnB? Conveniently, these points are not raised. quote.

He noted Government policies to increase housing supply, from KiwiBuild to the goal of 6400 more public houses over the next four years. end quote.

Kiwibuild is intended for first-time buyers struggling to afford their first home… oh. Scratch that. They can rent them out now. I had forgotten about that little policy change. As for 4,600 new public houses in the next 4 years, I understand the waiting list for public housing is already in excess of 6,000 so that problem is not going away. In the meantime, people still need somewhere to live.

Rents are going to keep increasing, because the government has more landlord-bashing policies lined up. Firstly, they have banned letting fees, so that the cost of a property manager finding a tenant will have to be passed onto the landlord. Next, they are looking at allowing rent increases only once a year. So, if I were a landlord, I would make sure the annual rent increase is a hefty one. Life will just get harder and harder for tenants in private housing.

ACT leader David Seymour said Cindy was so hasty to shell out millions for Papua New Guinea’s electricity rollout that she forgot her commitment to fighting global climate change. Quote.

The Prime Minister today announced taxpayer funding for Papua New Guinea’s National Electrification Rollout Plan, which aims to increase electricity access to 70 per cent of households by 2030

PNG is overwhelmingly reliant on oil, gas and coal for its energy needs. Its government is actively ramping up coal exploration and an Australian company was given the green light to extract coal earlier this year.

“While her Government has banned offshore exploration of oil and gasdomestically, today Jacinda Ardern committed to hooking more Papua New Guineans up to fossil fuels.” End of quote.

We can only hope Cindy’s amnesia lasts long enough for our oil and gas and mineral exploration to recover from her recent vicious body blow to them.  If it’s good enough to spend taxpayer funds on fossil fuels in a foreign country, it’s good enough for Cindy to revisit her stance back home.  Quote.

New Zealand Now

The PM claims that climate change is her generation’s ‘nuclear-free moment’, but her policies are helping countries like Indonesia and Papua New Guinea develop their fossil fuels.

Genesis Energy recently ordered 120,000 tonnes of Indonesian coal, and now the Government is actively promoting the development of fossil fuels in Papua New Guinea.

Does the Government simply have no coherent vision, or is it trying to have it both ways?” End of quote.

Or is it simply a case of jet lag or baby brain that she doesn’t understand that banning oil and gas exploration here simply costs us more and shifts production overseas? Quote.

Just as the Prime Minister can’t work out whether she wants petrol prices to go up or down, she is deeply conflicted about whether cheap fossil fuels are necessary for economic growth and higher living standards

In helping to promote economic development in PNG, she is pretending that she hasn’t staked her reputation on fighting climate change.” End of quote.

Cindy is doing one thing in Papua New Guinea and the opposite back home; there’s a word for that…hypocrisy!

Photoshopped image credit: Pixy

Andrew Little is leading the charge to reopen Pike River mine and to send people into unknown and possibly dangerous conditions to find the remains of the 29 men who died in the mine. It is a tragic situation which has been politicised by the government in a way that is truly disgraceful. Nothing can be achieved by doing this; no one will be found alive, and whatever remains are there will almost certainly not be recognisable. Better to leave the mine as a grave and a memorial. The families know where their sons and brothers are. Let them rest in peace.

But then I came across this article which puts a whole different slant on the matter and shows the government to be hypocritical at best, and Andrew Little himself to be possibly complicit in the disaster that happened 8 years ago.

How Andrew Little failed the Pike River miners is a disturbing article, and I recommend you read it in its entirety if you want some background into the matter. Please note that the original article was written in 2012. quote.

WHEN THE  Royal Commission of Inquiry into the Pike River mining disaster issued its report  this week, the response of the Engineering, Printing and Manufacturing Union (EPMU) was immediate. It issued a press statement welcoming  the  report and is encouraging the Government to implement the recommended  changes as soon as possible.

This report is a damning indictment of New Zealand’s deregulated health and safety regime. Pike River Coal Ltd should never have been allowed to operate in the way it did, and in other countries it wouldn’t have been allowed to.

The report makes clear that the tragic loss of life at Pike River could have been prevented with stronger regulations, an independent and well-resourced mine safety inspectorate and genuine worker involvement in health and safety.

This statement represents a complete change of heart by the EPMU officialdom because it was never critical of  Pike River Coal (PRC) during the time that  the mine was open. The EPMU represented approximately half of the 140 miners on the site.

After the first explosion the EPMU strongly defended the management of PRC.

EPMU National secretary Andrew Little (now a Labour MP)  told the New Zealand Herald on November 22  2010 that  there was “nothing unusual about Pike River or this mine that we’ve been particularly concerned about”.

Andrew Little’s conciliatory views toward  PRC management were echoed by Labour MP Damien O’Connor. He suggested that no one was responsible for the accident and that the  disaster was “just one of these things that the West Coast unfortunately has had to get used to over the years”. end quote.

Yes, it is true that the West Coast has struggled with mining accidents over the years, but in the 21st century, with health and safety regulations being robust, such accidents were no longer expected to happen.

So, here we had the government, the opposition and the union lining up to defend the PRC management. quote.

The views of Andrew Little and the EPMU flew in the face of expert opinion.

While Andrew Little  was defending PRC an Australian gas drainage engineer, who wished to remain anonymous because he feared ‘recriminations’, said he visited Pike River in 2009  and observed that its  operating standards were “extremely poor”.

He said  that he had been told by miners  that the mine was flooded with methane gas about three weeks before the first explosion.

But despite the overwhelming evidence that there was  something seriously and dangerously wrong at the Pike Rive mine, the officials of the  EPMU did nothing.

The mine opened in November 2008  and on not one occasion did the EPMU  initiate industrial action or even criticise PRC’S  safety standards, even after a group of workers  walked off the job to protest the lack of basic emergency equipment. end quote.

The union did not support their workers when they walked off the job over safety concerns. quote.

It was exactly this benevolent attitude  by the EPMU that allowed PRC – and the Department of Labour – to continue as if it was just ‘business a usual’. It appears that no-one was  protecting the interests and concerns of the workers on the mining site. The EPMU failed to organise industrial action  to address safety concerns  at the  mine in favour of  ‘cooperating’ with management, what it and the CTU sometimes  refer to as ‘modern unionism’.

There won’t be any resignations from within the EPMU for dereliction of duty and, of course, Andrew Little  has escaped to Parliament. end quote.

If unions are not there to protect their workers, then why do they exist at all?

So while Andrew Little stands up to the media and says that re-entry is ‘fulfilling a promise’ to the families, is praised by Duncan Garner for his ‘integrity’ over the announcement to re-enter the mine, and pours scorn on the previous government for a ‘cover up’, we should all stop for a moment and consider just one small thing.

If Andrew Little, as the National Secretary of the EPMU at the time the mine was established (and when the explosions occurred) had done his job properly and taken the safety of his workers seriously, the Pike River mine disaster might never have happened.

No amount of ‘fulfilling a promise to the families’ is going to change the fact that their sons, husbands and brothers could have come home that day if the EPMU had done the job they are supposed to do, which is to look after the safety of their workers.

But they didn’t.

Phil Twyford
Photoshopped image Credit: Pixy

During the election campaign, Labour promised to build 10,000 houses a year, all for low-income families who had been ‘locked out’ of the housing market. They made it sound easy as if the previous government had simply been remiss in failing to do anything about the worsening housing crisis. Labour was going to save the day. Labour was going to solve the problem for low-income families.

One year in and the government has now realised how hard it is to do that.

The truth is, as many of us knew during the election campaign, houses cannot be built quickly and cheaply here in New Zealand at all. Drastic changes, such as an overhaul of the Resource Management Act, will be required to do that, and this is very unlikely while Labour is joined at the hip with the Greens.

The problem is that the only people who can afford Kiwibuild houses are people who could afford to buy houses on the open market anyway. Let’s face it, at $650,000, Kiwibuild properties are not exactly cheap. Those that can afford them can probably find better houses elsewhere within the market.

Stuff reports that the scheme is basically a failure. quote.

Kiwibuild’s “plummeting popularity” could spell out Kiwibust for the Government’s flagship policy.

There are only 338 pre-qualified Kiwibuild applicants, while contracts for 3375 houses have been signed off by the Government. It was forced to push out the Kiwibuild ballot deadline in Wanaka, after receiving just 20 entries for 10 homes. end quote.

Now that the rules have been relaxed around renting out Kiwibuild properties, these houses will be snapped up by buyers in Wanaka who will be able to rent them out on AirBnB. So much for those low-income families, huh? quote.

National Party housing spokeswoman Judith Collins said it was time to question its financial viability.

“If Mr Twyford can’t sell the houses he has bought off the plans, the Government will be forced to pay this money. This will easily blow his $2 billion budget and cause the whole scheme to come crashing down,” Collins said.

The policy was a “complete shambles”, she said.

“Houses are too expensive and too small. The minister isn’t building enough houses, he isn’t selling enough houses, and those few that are sold aren’t going to the people that need them.” end quote.

Spot on, Judith. Yes, they are too small for the price. Someone who has $650,000 to spend on a house can probably find a larger option somewhere within the general market. This is the trouble. quote.

A spokesman for Kiwibuild said while 338 people had completed the ballot process, a further 6648 applicants had begun the pre-qualification process. end quote.

Some of those going through the qualification process will buy houses elsewhere. After all, the qualification process is much the same for buying any house. The buyer simply has to be able to raise the money to buy. quote.

The number of ballot entries varied from place to place.

“We are satisfied with the ballots so far, which have already resulted in the 33 families buying their Kiwibuild home. Another 53 Kiwibuild homes are currently being balloted – a mix of completed homes and ‘off the plans’ houses that were still being built,” he said. end quote.

The numbers really are very small. A drop in a bucket in fact. Where are the 10,000 houses a year we were promised?

Let’s take a look at the Kiwibuild tracker.

So by the time they have been in government for almost 2 years, they will have built 1000 homes. See what I mean about it being a drop in a bucket? quote.

Economist Shamubeel Eaqub said low ballot figures did not point to any likelihood of loss on unsold homes. At worst, the Government would on sell a home at the price it paid for it, and to buyers who may not have originally qualified for Kiwibuild.

Official advice showed it was always going to run out of buyers: building different kinds of homes, to lift home ownership rates was the original goal, he said. end quote.

If they were always going to run out of buyers, why are we doing this? Why put $2 billion of taxpayer’s money into a scheme that nobody wants? quote.

“We don’t build these modest style of homes any more. We tend to build them grand and expensive so they can only be bought by those in the market already, or the rich.” end quote.

Wasn’t that what Kiwibuild was supposed to be all about? Modest housing for low-income families ‘locked out’ of the housing market?

Jacinda says that this government will be measured on their success with housing at the next election. If she is counting on Kiwibuild to get her re-elected, she’d better start looking for another job really fast.

Photoshopped image credit: Pixy

As we head into Christmas, A newspaper reports that consumer confidence is at its lowest since 2012… which, you may remember, was the end of the GFC. quote.

Consumer confidence dipped in October as people fret about the future.

The ANZ Roy Morgan consumer confidence index fell to 115.4 in October from 117.6 in September. People’s optimism about their present situation lifted slightly to 122.0 from 120.2 but the future conditions index fell to 111.0 from 115.9, the lowest since late 2015.

“Consumers are feeling good about the here and now, but concerns about the future are clearly growing. Consumers haven’t been this pessimistic about their own and their family’s financial outlook one year ahead since mid-2012,” said ANZ chief economist Sharon Zollner.

Perceptions regarding the next year’s economic outlook fell 5 points to a net 1 per cent expecting conditions to deteriorate versus a net 4 per cent expecting an improvement in the prior survey. The five-year outlook fell 4 points to positive 14 per cent. end quote.

This is the effect of fuel prices. The prime minister simply cannot get away with claiming that petrol companies are ‘fleecing’ motorists with fuel price hikes when the government’s fuel taxes are such a big part of the price rise. And now that price increases are being seen everywhere, and inflation ticks upwards towards 3%, we are on a downward slide. Wait until interest rates start to rise. quote.

A net 11 per cent say they were better off now than a year ago versus a net 12 per cent in the prior survey. A net 20 per cent expect to be better off financially this time next year, down 7 points. end quote.

I don’t think many people will be better off in a year’s time. This downturn is starting to bite. quote.

“A key question is whether this growing concern about the outlook will lead to consumers reining in their spending. However, encouragingly for retailers, the proportion of respondents who think it’s a good time to buy a major household item increased and is at a level consistent with solid growth in spending,” Zollner said. end quote.

Or might it be a good idea to buy a major item now because they are only going to get more expensive? If you need a new fridge, buy it today. quote.

Inflation expectations were a tad higher with prices seen rising at an annual pace of 3.5 per cent during the next two years, up from 3.4 per cent in October but down from 4 per cent in August.

Zollner said ANZ’s confidence composite gauge – which combines business expectations and intentions with overall consumer sentiment – suggests a slowing in economic growth by year-end. end quote.

Economic growth is slowing already. The September quarter figures were not too bad, but they didn’t take into account the fuel price increases. Wait until we get the December quarter figures, at the end of January. We will start to see a very different picture then.

There is considerable evidence that people are deliberately using their cars less than they did. This can only be a result of spiralling fuel prices. Fuel prices affect everything. If people feel unable to use their cars, they will spend less everywhere. They may not go on holiday. They may not take the kids out for the afternoon. This means the discretionary spending will dry up… which means the hospitality industry starts to struggle. Which means fewer jobs for people with no qualifications and on it goes. The downward spiral has already started and ordinary people are already beginning to feel it

Photoshopped image credit: Technomage

If this government is good at anything, it is talking about what they are going to do. They are going to plant a billion trees. They are going to build 10,000 houses a year. None of these things are showing the slightest signs of happening, but they still talk as if they are in full control of everything.

One News has published an article where poverty advocates are calling on the government to stop talking about fixing poverty, and to actually start to do something. quote.

Auckland Action Against Poverty is calling on the Government to close the gap between rhetoric and reality, and to do something to address the worsening situation for society’s most financially vulnerable.

The group’s coordinator, Ricardo Menendez March, spoke to Breakfast this morning about the increasing number of people needing government assistance.

“Well, over the past few years, we’ve seen a steady increase of the number of people requiring hardship assistance, particularly food grants, but there’s been a really steep jump from last year to this year, and I think it’s showing that we’re reaching crisis levels, where far too many people are requiring food grants to get by,” Mr Menendez March said.

He said over 300,000 people required assistance. end quote.

So this is what ‘bringing kindness back’ looks like? quote.

“Things are getting worse.”

He says rising rent costs are “the biggest driver” in the “jump” in numbers.

“New Zealand reports show that people on the benefit have been the most disproportionately affected by the rising cost of rent, and nothing has been done to address that.

“There’s other stuff, such as petrol, food, etc, but it’s really the cost of rent and housing that’s affecting beneficiaries the most.” end quote.

I don’t think this is just about beneficiaries either. I think there are a lot of working people in the same situation, and that is the really hard part. There was a time when having a job meant you could pay the bills, within reason. There is no guarantee of that any more. quote.

Mr Menendez March says what can be done is for the Government to “raise benefit levels, at the very least”.

“Child Poverty Action Group released a study suggesting that they should at least be doubled, and that would only put them 60 per cent below the poverty line at this point, so it wouldn’t even put them over the poverty line. end quote.

Raising benefits is not the answer. Getting people into work is the answer, even if it means they will still be receiving a benefit in the form of Working for Families. Better to get them working than not working. They have better prospects for themselves and their families if they find work. quote.

“People are going for cash and low-paid work in the regions, and they don’t last for very long, and they go back onto the benefit, so the Government needs to be creating well-paid jobs if they want people to go into work.”

He says, however, that “so far, we’ve seen no clear indication or timelines on when they’re going to be removing benefit sanctions or raising benefit levels”.

“So far, it’s been really disappointing to see Jacinda Ardern at the UN talking about kindness and compassion. Well, we’ve got a really unkind welfare policy that is punishing our most vulnerable. end quote.

This is the problem when all you do is talk the talk. You create expectations that probably can never be met. Jacinda cannot double benefits, even if she wanted to. It would be political suicide. They cannot remove all sanctions on benefits either. That punishes taxpayers and means there is no incentive to go out to work. We might as well all just go on the dole.

There are no easy fixes to these problems and I have more sympathy for workers on low incomes than for beneficiaries because I can’t imagine anything worse than going out to work for 40 hours a week or more and still not being able to pay the bills. That is what is happening in a lot of low-income families, and it is tragic. Most of them vote Labour, and yet fail to see that Labour’s policies will keep them in poverty for their entire lives.

There are things that this government could do to help the situation, but such things are an anathema to their ideology. The first thing is to stop beating up landlords, which would make housing more available and, by default, more affordable. Secondly, they could get on with what they have promised and actually build some of those 10,000 houses a year. Then they could remove the fuel taxes. That would be a start.

Sadly none of these things will happen because all Labour is capable of doing is talking the talk.

The inexperience of this government is something that is constantly on show, even though they have been in power for a year now. They should be getting into their stride by now but it is not happening. Time and time again, they make silly mistakes that would have had the media screaming about incompetence if they had happened under John Key or Bill English. In contrast, this government gets a free ride all the time, although I suspect the free ride will be coming to an end really soon.

That may be just wishful thinking though.

A newspaper  reports that, once again, Jacinda has no head for the numbers. quote.

Prime Minister Jacinda Ardern’s calculation of how much extra tax Kiwis are paying at the petrol pump on Monday did not include the recent excise tax or Auckland’s Regional Fuel tax.

National Leader Simon Bridges said the Prime Minister has got this “badly wrong,” and has made a “staggering mistake.”

But a spokesman for the Prime Minister said her comments were “based on the most accurate information Ministry of Business, Innovation and Employment (MBIE) had compiled at that time.” end quote.

The “most accurate information” that MBIE can come up with does not include recently imposed fuel taxes? Gee, it is not just the politicians that are incompetent then, is it? quote.

Between October 27, 2017 and September 28 this year, petrol prices have risen 39c, according to MBIE data – Ardern said just 6.8c of that increase was due to “taxes and levies.”

That 6.8c increase is made up of a 1.77c increase in Emissions Trading Scheme (EST) taxes and 5.04c of GST over the same period, MBIE data shows.

But the 10c a litre Auckland Regional Fuel Tax and 3.5c a litre fuel excise tax, introduced on September 30, were not included in the “taxes and levies” side of Ardern’s equation. end quote.

This is so seriously incompetent that you cannot help wondering if it was deliberate. With a fawning media, they may have thought they would get away with it. The risk of that strategy is that, if caught out, they would look incompetent.

Nah. I don’t believe that theory. Too clever for this mob by far. They are just plain incompetent. quote.

In a statement to the Herald, an MBIE’s spokeswoman said: “current methodology does not accommodate regional prices or regional fuel taxes” in their fuel price calculations. end quote.

So we are being fleeced at the pump but the Auckland regional fuel tax is not part of the fleecing? Okay. I get it…

No. I don’t. quote.

Our current methodology does not accommodate regional prices or regional fuel taxes. We are developing a new methodology to replace our existing methodology that will include regional retail price differences in its measure.” End quote.

Sounds like something straight out of “Yes, Minister” doesn’t it? Obfuscation on top of inexperience just looks stupid and sneaky. Oh, and explaining is losing, as we all know. quote.

As for the 3.5c excise tax – that came into effect on September 30 and the MBIE data Ardern was referring to was taken from between September 21-28, meaning it was not included in MBIE’s data either. end quote.

I could have sworn she held this press conference, blaming the fuel companies for ‘fleecing’ motorists on Monday, 8th October? So the data was over a week out of date?

John Key would never have got away with this level of sheer ineptitude. I can’t help wondering if the standards have fallen so low in the past year that this level of incompetence is all we expect nowadays. She has misled and misinformed the public and by and large, she has got away with it. Whichever way you look at it, she had either lied deliberately or has no clue what she is talking about. I choose the latter. She simply has no clue.

Jacinda Ardern Taxes meme

Many things are not going well for this government, and some of them are beyond their control. They do have control over how much tax they put onto fuel, but they have no control over the international oil price. They did crash business confidence, causing the dollar to start to fall, but the strengthening greenback has caused our dollar to fall further. Now that world stock markets are falling significantly, all managed funds and share portfolios are losing value and the biggest by a long way is the NZ Superannuation  Fund.

Stuff  reports: quote.

A repeat of the global financial crisis could see the New Zealand Superannuation Fund shed more than half of its value.

The scenario was laid out in the fund’s annual report, released on Thursday, explaining that more than $22 billion would evaporate if the events of 2008 and 2009 were repeated now.

By coincidence, it was released on a day when sharemarkets around the world tumbled, with the NZX-50 down 3 per cent, dropping in response to a plunge in technology stocks in New York. end quote.

Okay. First of all, no need to panic. This is not another GFC. Stocks have fallen around 3% in the past week, and certainly, that has been felt in the value of all managed funds and share portfolios. Here in New Zealand, and also in the US, we have enjoyed unprecedented growth in stock values in the last year, and so this is nothing more than a market correction – seen by many to be long overdue. quote.

Rather than signalling a change in approach away from its moderately risky investment strategy, chief executive Matt Whineray said the fund issued the warning to ensure that if markets tumble, the public – and the Government – does not lose confidence.

“The risk is that we don’t have the discipline and capability and that we lose the support of our sponsors [and] broader stakeholders, whether that’s the Government or the public or the media, that people don’t understand the expected range of outcomes.” end quote.

A lot of people do not understand the markets and get spooked when values fall. This can result in both individuals and fund managers selling out prematurely and locking in losses simply because of market jitters. It has to be said that the Fund has a long-term medium to high risk strategy that may result in short term losses but it has been proved in the past that the strategy works long term.

None of this is a significant risk to the government, you might say. Well, actually, that is where you are wrong.

Guess who – or should I say, what – is the biggest taxpayer in New Zealand?

The NZ Super Fund.

The NZ Super fund paid about $1 billion dollars in tax last year. That was more than government contributions into the fund.

So, if they have a tough year – and this year is shaping up to be a little turbulent, with a lot of global uncertainty and trade wars to add into the mix – that not only affects asset values, but it reduces the tax take into government coffers as well.

So don’t panic too much about your share portfolio or managed funds. If you are investing for capital gains, you either have to sit back and wait, or you should have taken your profits already. If you are investing for return, then your dividend yield just got better. In either case, so long as you are not forced to sell out for other reasons, you should be fine in the long term.

However, for the government, there could be a real headache coming. If the tax take from the Super Fund falls, it could be a significant hit to their revenue stream. We all know what that might mean. The way they have been splashing money around everywhere, including the Pacific, they could run out of other people’s money to spend really fast.

James Shaw wants to spend the surplus and James is an Associate Finance Minister. Clearly, we should be very worried.

Petrol companies  are pushing back on the Prime Minister’s claim that New Zealanders are being “fleeced” at the pump.

In response to petrol prices hitting record highs, Prime Minister Jacinda Ardern said the Government would rush through changes to the Commerce Act to allow the Commerce Commission to investigate the margins on fuel. end quote:

As I said before, this is all just a ploy to make the government look as if they are concerned, when they couldn’t care less. The investigation (for that, read another Working Group) will not produce its report for about a year, by which time we will all have forgotten about the government’s caring face. But it makes them look good – to their media sycophants anyway. quote:

But Gull general manager Dave Bodger told RNZ the market was competitive and its prices were fair.

“From Gull’s point of view, we’re well known for having some of the best prices in the market, so I don’t believe we’re fleecing anybody at all.”end quote.

Gull has generally offered considerably lower prices to consumers, so this is a fair comment on their part. The other oil companies have chimed in too. quote:

In a statement, Z Energy boss Mike Bennetts said it disputed that prices were “unjustifiably high” and disagreed that customers were being fleeced.

“Z believes the fuel market is highly competitive, but the way to satisfactorily demonstrate this and give consumers the confidence they need is to have the level of transparency that a market study can bring.”

Bennetts said Z’s profit margin was not the reason for the price surge.

“Z will release its half year financials in early November. We look forward to sharing an audited, accurate view of our profits with the public then.” end quote.

A little warning for the Princess. If an oil company welcomes the idea of a market study, believe me, you are in trouble.

This could be the reason why she may be in trouble.

Photo credit: Wilson

Yes, it seems the government gets $1.516 from every litre of petrol. This figure includes GST, of course, but that is tax as well.

I was just listening to the radio and heard that the AA says that recent fuel price hikes are the result of product costs and tax – not fuel company margins.

This is why the Princess needs to bury this matter in a study which will take months to report back. She will rush legislation through parliament in a grand gesture to make sure everyone believes she cares. Then the Commerce Commission can take as long as they want over it. She has shown the kind face of her government and now she can walk away, thinking we will all forget about it in a few weeks.

The cost of fuel affects the price of everything. Everything will soon start to go up in price. We could be looking at the highest inflation rate in a decade soon – long before the Commerce Commission’s report comes out.

And once again, it is the poor – you know, the ones who vote for these clowns – who will be affected the most.

Prepare yourself for the backlash, Cindy. This is one situation that fairy dust won’t fix.

Photoshopped image credit: Pixy

As we are all too aware, just before our beloved leader, Comrade Cindy, left for her first foray overseas as the first unmarried pregnant PM to attend the Commonwealth Heads of Government meeting, she had a brain fart.

Obviously worried that she would not be noticed in the crowd, our comrade felt she needed to establish her bona fides as a big-noting world leader so, without consultation with her party, her caucus, her officials, her coalition ‘partners’ or anyone other than a bunch of hippie Greenpeace wombles on the steps of parliament, our comrade killed the New Zealand petrochemical industry.

Well done, Comrade Cindy!

Those of us who spend more than 30 seconds thinking about the implications of this idiocy would like to know:

How are you intending to deliver Shaw’s impossible renewable utopia without petrochemicals?

Just a little bit of thought would have shown that petrochemicals are used in everyday products, not just evil private vehicles.

Petrochemicals are used to manufacture many parts of the modern energy system, including solar panels, wind turbines, batteries, thermal insulation and electric vehicles.

International Energy Agency Executive Director, Dr Fatih Birol, is on record saying:Quote:

Our economies are heavily dependent on petrochemicals, but the sector receives far less attention than it deserves. Petrochemicals are one of the key blind spots in the global energy debate, especially given the influence they will exert on future energy trends. In fact, our analysis shows they will have a greater influence on the future of oil demand than cars, trucks and aviation. End of quote.

Unfortunately, in New Zealand, the sector has received far more attention than it deserves – it was taken out and shot at dawn, without a trial.

When a ‘green sustainability’ website says we need petrochemicals then maybe Russel and his Greenpeace thugs, Shaw, Ardern and Woods et al should take notice? Quote.

Petrochemicals—components derived from oil and gas that are used in all sorts of daily products such as plastics, fertilizers, packaging, clothing, digital devices, medical equipment, detergents and tires—are becoming the largest drivers of global oil demand, in front of cars, planes and trucks, according to a major study by the International Energy Agency (IEA).

Petrochemicals are set to account for more than a third of the growth in world oil demand to 2030, and nearly half the growth to 2050, adding nearly 7 million barrels of oil a day by then. They are also poised to consume an additional 56 billion cubic meters (bcm) of natural gas by 2030, and 83 bcm by 2050. End of quote.

But it will NOT be Taranaki natural gas, no siree! – We have to save the planet! Quote.

The Future of Petrochemicals is part of a new IEA series focusing on “blind spots” of the global energy system—issues that are critical to the evolution of the energy sector but that receive less attention than they deserve. […]

Petrochemicals are particularly important given how prevalent they are in everyday products. They are also required to manufacture many parts of the modern energy system, including solar panels, wind turbines, batteries, thermal insulation and electric vehicles.

Demand for plastics—the key driver for petrochemicals from an energy perspective—has outpaced all other bulk materials (such as steel, aluminium, or cement), nearly doubling since 2000. Advanced economies currently use up to 20 times more plastic and up to 10 times more fertilizer than developing economies on a per capita basis, underscoring the huge potential for global growth.

The dynamism of the petrochemical industry is also driving new trends around the world. After decades of stagnation and decline, the United States has re-emerged as a low-cost location for chemicals production thanks to the shale gas revolution, and is now home to around 40% of the global ethane-based petrochemical production capacity. Meanwhile, the Middle East remains the lowest‑cost center for many key petrochemicals, with a host of new projects announced across the region. End of quote.

We could have been part of that world; new projects, new technologies, new jobs – but a motley collection of Greenpeace wombles and our compliant comrade killed all that.  Thanks, guys! Quote.

Petrochemical products provide substantial benefits to society, including a growing number of applications in various cutting-edge, clean technologies critical to sustainable energy systems. However, the production, use and disposal of petrochemical-derived products present a variety of climate, air quality and water pollution challenges that need to be addressed.

While substantial increases in recycling and efforts to curb single-use plastics are underway, especially in Europe, Japan and Korea, the impact these efforts can have on demand for petrochemicals is far outweighed by sharply increasing plastic consumption in emerging economies.[…]