Paying for results

17 Comments »

• Craig says:

  15 February 2012 at 9:01 pm

  So long as James Cameron is to go by the same ruling….
  I bet he isn’t why oh because that’s different. it looks good from a PR angle.

• poormastery says:

  16 February 2012 at 1:05 pm

  The headline is odd.

  There was no “bombshell” as such. The decision was predictable as it was wearying. Mr Key’s government is not rocked by this Court decision – it is strengthened by it. Populism is their modus operandi. The common man laps it all up.

  The average New Zealander doesn’t like Chinese people because they work too hard. Deserve has nothing to do with it, as Clint Eastwood would say (The Unforgiven)…

  The Court decision gives the National government an easy excuse to change their mind. Everyone is happy, except perhaps the Chinese investors, and who cares about a bunch of inscrutable Asians?

  In essence, this is the problem I have with sickly liberals squealing about Maori mistreatment. It’s a global community. New Zealand is more racist towards Asians than the indigenous population. Yet on the latter issue, we hear only the sound of silence. “Fools”, said I, “You do not know. Silence like a cancer grows.”

  In restless dreams I walk alone…

  Rgds,
  *p*

  • Peter Aranyi says:

    16 February 2012 at 1:24 pm

    Thanks for your comment. I haven’t decided how I see this. More water to flow under bridge.

    But the NZ Herald’s veteran in the Press Gallery sees it like this…

    Welcome to John Key’s nightmare. Yesterday’s High Court ruling putting the kybosh (at least for now) on the sale of the Crafar farms to Chinese interests may well be the most intractable problem he is likely to face as Prime Minister.

    Yesterday’s judgment has turned what was a political irritant into a full-blown political disaster. The decision struck National like a thunderbolt. No one saw it coming. Two of John Key’s ministers have been left more than embarrassed, and it leaves National in an awful quandary. …

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10785861

    While Bernard Hickey calls the High Court ruling an intervention…

    Finally, someone has staged an intervention to confront New Zealand Inc’s addiction to living beyond its means through selling assets to foreigners and borrowing money from foreigners.

    For decades we have spent more than we earned as a nation and funded the difference by borrowing foreign money through our banks, or directly in the form of companies borrowing offshore or the government borrowing from foreign funds and banks. If we couldn’t borrow the money, we would sell assets, be it companies, land or state assets.

    We’ve been kidding ourselves for decades that, like the L’Oreal ad, we were worth it. We have run chronically high current account deficits for most of the last 30 years. We believed, and have been encouraged by our leaders, bankers, and asset buyers, that New Zealand could afford it and we deserved it.

    But in our bones we knew we couldn’t, and it’s great to see Justice Miller at the High Court now tell us in this decision it has to stop, even if the government can’t or won’t do it. His ruling that any foreign buyer has to prove a bigger benefit to the nation than a local buyer sets a very high threshold.

    http://www.interest.co.nz/rural-news/57934/opinion-bernard-hickey-says-high-court-ruling-against-crafar-farms-sale-may-be-just

    Have a read, let me know what you think …

    – P

  • ivantheterrible says:

    16 February 2012 at 3:15 pm

    Time will tell whether these observations are correct or not. Personally i think Key and his cronies were caught with their pants down and a sharpened pineapple hovering just outside of their extremities.

    I have no lyrics to quote unfortunately … plus i’ve never been a fan of Clint Eastwood. Does attitude toward china have anything (remotely i know) to do with their record of government – tibet perhaps – human rights – business practices. Its worth a look.

    Personally im thrilled to see us “common man” types catered for. I can feel the need to tug my forelock to the lord of the manor already.

    Now i know why 1066 was a shit of a year if you were a saxon.

• Craig says:

  16 February 2012 at 7:16 pm

  Isn’t Bernard contradicting himself. Govts and countries for years worldwide have been living above their means basically true, Buy selling these Farms its exactly tackling that problem. National are not selling it because they think its a good idea they are selling them as an investment. Then Hickey states that’s why it was stopped. Sorry not a bit of logic in that statement. And if he is meaning that by not selling it it will be worth more down the line. Garbage Something is not worth anything until its sold. If its never sold its effectively worthless.

  • Peter Aranyi says:

    16 February 2012 at 10:32 pm

    I still have the feeling that this High Court ruling is merely a temporary setback, despite my colleague John Armstrong’s “Crafar – a rout of huge proportions” angle.

    I heard Green Party leader Russel Norman putting it on John Key that this was his chance to make a difference for future generations etc.

    Sadly, while I don’t question the Prime Minster’s patriotism, I wonder at his ability to find solutions to the generational issues Bernard Hickey raises. Selling the family silver (up to 49% of it) doesn’t to me seem a promising idea for New Zealand’s future – despite the transparent and slippery sweetener of ‘We’ll spend some of the proceeds on schools and hospitals!’

    Before the Nov 2011 election someone suggested to me that the National Party would win (that was my prediction too) but that they would be a deeply unpopular government.

    Where John Armstrong’s article is completely right in my view, is in his prediction of a backlash …

    If they hold true to their original position and again rubber stamp approval, then National could suffer a real backlash. If they change their minds, they will have to cite some pretty good reasons for doing so.

    Yes.

    • ivantheterrible says:

      17 February 2012 at 2:15 pm

      You are so right about a “deeply unpopular government” or should i say your informant is.

      Lots of precedents in History for populist regimes who particularly capitalised (there’s a nice word) on uncertainty driven by the times and peoples fears and prejudices. Eventually though – the light bulb goes on for people. The most poignant moment is when they open their latest power bills – or indeed start looking at the sheer cost of living – and the seeming encroachment of foreign interests on the land they love dearly.

      For some in history – the light bulb doesnt go on till its too late and the country they love is in ruins.

      Lets not go there.

      • Craig says:

        17 February 2012 at 7:15 pm

        They are so unpopular they won with the biggest majority in many elections.

        People here in this Blog are so whats the word ‘blind’ what has any govt done to try and make a difference? Labour did NOTHING in fact they could be blamed for putting NZ defiect towards where it is today. the issue as I see it with the nay sayer’s is they don’t like change. whether its good or bad they simple don’t like change. Grow some eyeballs and some neutrality. National are trying for once to do something about it. But oh no the porridge is too hot you can’t do that, oh no the porridge is too cold you cant do that. Well you know go away and starve then.

        • ivantheterrible says:

          21 February 2012 at 5:06 pm

          I said in my response – “eventually…” – i didnt say they started as unpopular.

          Key and his cronies – lied, manipulated and unashamedly courted their vote by hiding the truth – they didnt and dont have a plan. They want to flog things off for a short term gain.

          I am old enough to clearly remember the “change merchants” of the 80’s – and the havoc they wrought with their unplanned “the market will determine the best outcome” – i remember the book “theory K” – if you look at the bold NZ companies profiled (and i worked for one of them) – they mostly went tits-up in right royal fashion – it was all smoke and mirrors – rape and pillage.

          The porridge is neither hot nor cold – its fucking mouldy, cold and stuck to the bowl – and Johnny Key and Joycey are busy trying to loosen it all up with a blowtorch.

• poormastery says:

  16 February 2012 at 10:20 pm

  This is a case of treating the symptoms, rather than the causes, of the issue.

  If you wish to limit foreign ownership of New Zealand assets, the most effective and fairest way to do this is to increase the domestic savings rate. Greater domestic savings mean New Zealanders would own more domestic and indeed foreign capital. If New Zealanders don’t save enough, then inevitably domestic assets will transfer to foreign owners.

  Compulsory pensions are the answer. Of course, it is more appealing to the cheap seats to scare monger about yellow peril than it is to address the real issues.

  rgds,
  *p*

• ivantheterrible says:

  17 February 2012 at 12:01 pm

  The argument could go round and round in circles till the Cows come home – literally.

  Nothing is inevitable about domestic assets transferring at all. All it takes is commonsense and political will. Not having a professional gambler and money merchant at the helm and a sycophant who believes in social welfare for certain media organisations who have some of the most overpaid people hanging onto the teetering scaffolding – would help also.

  I can see why Key believes in ‘elegant’ solutions – there are many who have ‘elegant’ keenly and precisely structured answers. Kind of like a scientist with a lab rat really – so cool and dispassionate. I can think of all kinds of parallels. Its like students at a philosophy class – all competing to see who can construct the most beautiful answer for the teacher.

  In the real world – people bleed and they feel pain.

  Hickey and Armstrong are right. If the sale goes ahead i can only hope it causes immense problems for those with exquisitely elegant thinking and expression. A sharp pain in the rectum as it were – long lasting reminder of the price of foolishness.

• poormastery says:

  18 February 2012 at 11:14 am

  ivantheterrible,

  “Nothing is inevitable about domestic assets transferring at all.”

  I give you a tautology. 1 + 1 = 2. This equation is useful but not meaningful.

  NZ has persistent current account deficits.

  A curent account deficit has an equal and offsetting capital account inflow. If you export less than you import, you must borrow the difference from overseas, to pay for the “excess” imports.

  Current Account Deficit + Capital Account Inflow = 0
  Current Account Surplus + Capital Account Outflow = 0

  Another tautology (or 2).

  The current account deficit (exports – imports) must be funded (borrowed). In other words, if a country exports less than it imports, it will have to borrow from foreigners. This country (NZ in this case) has a liability overseas. The foreign country has an asset – it is owed money by the current account deficit nation.

  This asset could take many forms. It could be bonds, equities or land. Irrespective of asset class, what is inevitable is that current account deficits cause domestic assets to be owned by foreign countries.

  The inevitability of a tautology is difficult to dispute, unless you fail to understand logic.

  So let assume that NZ desires to become a current account surplus / capital account outflow nation. What to do? Should NZ ban foreign countries from buying NZ assets? In effect, this would require New Zealanders being banned from buying imports. This has been tried (120% tariffs et al) but failed to deliver current account surpluses.

  Perhaps the answer is to look at the countries that have current account surpluses (capital account outflows), and see what they have in common. The same analysis on current account deficits (capital account inflows) can be applied.

  High savings countries include China, Germany, Norway and Switzerland. All have current account surpluses. Low savings countries include the US, Britain, Australia and New Zealand. All have current account deficits.

  Excess savings are transferred from one country to be spent in another. In the end, debits equal credits. Another tautology. This flow generates an asset in one country and a liability in the other.

  No doubt, this is too “elegant” for your taste.

  So be it.

  Rgds,
  *p*

  • ivantheterrible says:

    21 February 2012 at 4:54 pm

    I find myself in awe of your reasoning Poormastery – although i was not actually addressing you – just one smattering of your contribution – grouped around the word “inevitability”.

    So – get everyone to save (and i do sort of in a limited way understand that it is more complex than that simple statement …. but lets face it its like the little boy in the crowd saying “but he has no clothes…” – out of the mouths of simple babes…) – in the meantime what happens. Is there a tautology on that perhaps?

    What happens in the meantime – what would the timeframes be. Is this simply a matter then of the bottom of the heap (which now starts at the middle class) having to be the ones who tighten their belts for a couple or decades or more?

    I agree – it is too elegant for my taste. I can actually picture many folk – sitting back and marvelling over this sort of reasoning.

    Cheers for your response …

• Graeme says:

  18 February 2012 at 12:29 pm

  And here’s me, thinking that Justice Miller’s ruling was simply common sense that we should all live by. Have I misunderstood it? Isn’t he saying the OIO’s criteria for judging benefit should be set against all other offers, rather than against the original bankrupt state of the farms? What have I missed?

  • ivantheterrible says:

    21 February 2012 at 4:55 pm

    You got it in one mate. Millars ruling was commonsense and absolutely reeked of fairness. Those aspects dont go down well these days it seems.

• Craig says:

  18 February 2012 at 5:50 pm

  I was pleasantly surprised to see Farmers reactions on TV3’s news last night, very commonsense neutral answers

  http://www.3news.co.nz/Fays-consortium-can-match-Chinese-on-all-but-price/tabid/309/articleID/243273/Default.aspx

  Strictly from a Govt doing Business perspective why would they not sell to Chinese they will get 27 Million more than selling to Fays outfit. Plus it maybe opens doors for existing NZ farm product getting into China.

  • ivantheterrible says:

    21 February 2012 at 5:12 pm

    Commonsense and neutral – some farmers have a bad reputation for controlling huge hectares of NZ land – and sitting on the sidelines waiting to see which way to jump.

    The only way to guarantee a patriotic outcome is to force the issue via policy and legislation.

    Governments dont do business – they govern – which has more to do with the welfare of the people it governs – than pure bottom line economics.

    As Steven Joyce to repay the millions he loaned (effectively) to Mediaworks … a company he previously ‘owned – ran’….. no one seems to ask the question.

    How much does Keys Trust stand to gain by all these sell-offs??? Just another impertinent question.

    Stinks like an open sewer does this Government.