Sunday, July 26, 2009

Foreign Investment in New Zealand

I get upset by media and politician who really seem to confuse terms. Oversea purchase of an existing asset is not the same as overseas investment. When an overseas company (or individual) buys an existing asset it is a transfer of ownership (not investment).

Investment occurs when more money is put into an asset and that money is used to purchase more capital assets. When those capital assets operate they create wealth. (in some case it might be possible to use unused assets but Auckland Airport assets are not unused)

Before Telecom was sold by the government, they (the government) had invested billions of dollars in new capital. This meant the new owners did not have to invest in the business for years.

Worse, when Contact Energy was sold (with Edision Mission (?) having a 40% shareholding) one of the first actions of the new owners was to dismantle generation plant and export that equipment (I think to China). No new investment from Contact Energy occurred to well after it was sold to Origin Energy.

In my opinion any investment in New Zealand from overseas must include provision that there is more than change of ownership. There must be commitment to growing assets and employing people. If not I can see no reason to have oversea ownership. Why let NZ assets be used for the same purpose where all the profit returns to China, India, Brazil or Australia (the rest of the world appears to be in recession so is unlikely to be able to invest in NZ right now)

Some say that buying shares is investing. Actually this is more like saving or in some cases gambling. If you buy shares and that money is used to build something productive that is probably investment. And if you have money in a business that converts profits in to increasing capital investment then that is partly investment.

However most people who buy shares just buy into existing businesses who do little increase in investment. Many do less that replace their existing depreciation assets.

In fact building a new house is closer to investing than buying shares in many businesses. Buying shares can be less investing that saving money in a bank account as banks will lend your maney for profit. And some of that money may be used by businesses to expand.

For NZ we need to save, stop borrowing to buy the latest gadget

end of rave

Friday, May 22, 2009

Thoughts on a rainy day

The rain falling as it seems to have for weeks. Unfortunately it falls through the roof above my kitchen.

Why have I started this blog, well a friend suggested it. Not sure why maybe he thought I'd say something worth reading. So here I go and I don't promise anything that is interesting. I can't promise you my spelling or grammar will be correct however I will try to spell in English and will keep spelling colour with a u and organise with an s. The spell check incorrectly tells me I am wrong, I think the spell check is very wrong.

Not sure where to start but some background I am 42 years old (43 next week). I have worked in the same organisation since August 1995. Politically I am active and to the left (far left). How I got to being in the far left is simple I started off in the centre and watched the world move right. I am a democratic socialist and support these beliefs in that order. Socialism through the gun barrel is worthless. However democracy must be democracy. Democracy from the wallet is not democracy, it leads to either socialism though the gun barrel or more commonly fascism though the gun barrel. I can accept Tories being elected I don't support them buying power and disenfranchising others. Democracy where less than 80% vote is no democracy. Even 90% is low.

Now let me head off on some random tangent.

As a green lefty liberal the one thing that pisses me off is green left liberals. I may agree with most things they do. However can't this people see that they need to have a broad base to be electable?
The left seem not to know the meaning of the word 'broad'. Left parties are always joining together to make a bigger group. However shortly after the combined group is small that either of the old groups. It is quite clear why. It is so obvious why cannot they see it.

When two left groups unite it would make sense that concentrate on the common position. Not the left, when left group combine each group has a 'pet policy' so when two groups combine those policies are the centre of the new group.

So what happens, well some people in group A don't like the pet policy from group B they leave the group. And people in group B who don't like the pet policy from group A leave. It gets worse because when they later merge with group C then there are three pet policies. Everytime they merge they get smaller.

For a left party to be successful it needs to get rid of all the pet policies, none at all. The left need a set of common beliefs not a series of pet policies that in combination are only agreed by 100 people on the planet.

Well that is my opinion I could well be wrong, I could also be the only person who ever reads this blog. In fact I should accept that I will be the only reader.

Inky