One of my favourite things to do in my spare time on a Saturday is to sit down with a big paper and a good coffee and just read uninterrupted for an hour or so. I live in Auckland so I buy the Weekend Herald. Here are my favourites from the Weekend Herald and around on the internet on this weekend. Add your favourite links in the comments.
It must be election time - The Auckland Electricity Consumer Trust (AECT) has announced cheques worth $320 will be sent to about 307,000 customers in the old Auckland Power Board region, Matthew Dearnaley points out in the NZHerald. Trust Chairman Warren Kyd was pleased to associate himself with the 'handout'. I noticed this morning plenty of billboards out from the encumbents on the Trust board asking for re-election. I've always wondered why the 'dividend' is not simply 'repaid' to power users during the year as they consume power through lower prices. This is how other cooperatives work. Why doesn't the AECT do this? Could it be the annual cheque helps remind people to vote the encumbents back in?
Sore heads - There's a great picture on A7 of New Zealand's tallest man, Ron Bax. He is 2.25m tall. I think I'm a bit tall at 1.95m, but I have it easy compared to Ron who says he whacks his head two or three times a week on doorways, James Ihaka reports. My brother, Rob Hickey, is over 2m and has the same problem. However, he used his height and talent to become a basketball star. Rob marked Yao Ming off the court in the Tall Blacks' famous victory over China in the world champs a few years ago. Height has its benefits.
A stuttering recovery - The NZHerald's editorial has it about right today on the strength of the recovery globally one year on from the collapse of Lehman Bros. The pain has really just begun because governments around the world will have to spend the next decade digging themselves out of this debt with cost cutting and increased taxes. We should all be hunkering down.
"Having spent so much to stimulate their economies, Governments are confronted by snowballing debt and interest. If the recovery, helped along also by lessons learned from the Great Depression, has been swift, the overhang will linger. Governments will have to grapple with the need to rein in public spending for a significant period, and investment expectations will remain subdued. If the world shows signs of mastering the immediate response to financial crises, the aftermath is proving far more problematic." It's well worth a read.
Capital Gains Tax - John Roughan's column on Phil Goff's offer for a bipartisan approach to a capital gains tax is excellent. Roughan rightly points out that politicians must deal with the elephant in the room for the good of the nation and he praises Goff's courage.Hear hear. "There might never be a better time to start properly taxing property. The market would get a lift in volume as sellers moved to beat the tax start and first-home seekers would no longer face bids from capital gainers. Goff has given the country a golden opportunity. We'll see whether Key has the stature to match."
Partisan pain - Political columnist John Armstrong is always essential reading in the Weekend Herald, if only because of the little bits of insight he sprinkles through his column. Today he looks at National's deal with Maori to water down the carbon emissions trading scheme. Armstrong points out the Maori Party was pressured by iwi business interests with holdings in forestry and fishing. He also points out National's cavalier approach to a deal with Labour and says National doesn't trust Phil Goff in the wake of the Richard Worth shenanigans. That's a pity. New Zealand will need some bipartisan approaches to some issues such as tax reform if any changes are to made sustainable. My own view is that a carbon tax would have been a much cleaner option with less opportunity for lobbyists (like Fed Farmers) to weave their wicked magic to obtain exemptions.
It's an implosion - I usually try not to give advertisers advice because it means I can tell them politely not to give me advice with a clear conscience. But I can't resist with the advertisement on A21 of the Weekend Herald from Bond and Bond. It shouts about a "3 day only price explosion: complete price annihilation now!"
When I think of a price explosion I think of prices shooting higher. Bond and Bond should have used the word 'implosion'. Seriously, it's something we should all become used to. The world is entering a Japanese style era of deflation, not inflation. We should all demand lower prices on most things. There are a lot of ads in the Weekend Herald shouting about deflation, including The Warehouse's 'buy one get one free' offer and Briscoes' 25-60 per cent off everything sale. Retailers have the right approach to a recession. They cut their prices to clear stock. If only people in other industries would do the same New Zealand might be a cheaper place to live.
Why should all of NZ pay? - Andrew Laxon has a detailed and useful piece on B3 of the about the push by Auckland's councils to get the central government to help pay their $6 billion bill for the leaky building disaster. It seems the council is often the 'last man standing' in the litigation game where developers and builders liquidate and move on. National is resisting and so they should. Why should the rest of New Zealand pay for the errors of builders and inspectors in Auckland? Isn't this just a big bailout for the Auckland property market? This would be a transference of wealth from other New Zealanders to Auckland property owners. We certainly need a national debate on this, which we're not having. Many of the cases of leaky homes are tragic, but there are also many where buyers put their money down in the last 7 years and should have known some of the risks. Why should the rest of New Zealand pay to increase the value of their properties?
The juiciest little bit in the article is this. "A briefing document given to some council chief executives reportedly accused "cartels" of lawyers, experts and builders of fleecing home owners, who were left with no money to repair their homes. One expert was said to have quoted a $350,000 repair bill for a $160,000 house, which did not have extensive problems." Yet again the lawyers win.
We seem to want to be nation of landlords, lawyers and accountants.
Farmers reject NZX - I always make a point of reading Brian Gaynor's column in the Weekend Business Herald. I may not always agree with him, but his column is usually the most insightful and provocative thing in the paper. This week he quietly laments dairy farmers' decision to reject an NZX float and instead do any capital raising themselves. He rightly points out the risks of Fonterra's debts. But I think he's a bit pessimistic about how much farmers will contribute to Fonterra's capital raising. I think most farmers will buy the 20 per cent extra shares they are being offered by borrowing more from their banks against the value of their land. It will mean a transfer of debt from Fonterra's balance sheet to farmers' balance sheets. Depending on how much of the capital is used for growth and how much is used for debt reduction, it will also see the New Zealand dairy industry, and therefore New Zealand Inc, become more indebted. That's disappointing because New Zealand needs more equity investment, not more debt. We just can't shake our addictions to debt and our loathing of the stock market.
Oh the irony - The biggest ad at the front of the Weekend Business Herald was the full pager on C4 for one house in Parnell. This wasn't an ad for a fund manager or a stock broker or even a bank. New Zealand's economy remains horribly unbalanced and this was a good illustration.
And the pain - SkyTV's full page ad on C7 apologising to farmers for failing to broadcast Fonterra's capital reform announcement live to all Sky subscribers, as it had planned. It also apologised for problems with its call centre and 'misleading information given by staff" Ouch.
Job ads - I always look at the job ads in the Business Herald. It's not because I'm looking for a job, but because you often find little gems about who's left quietly and needs replacing and which business is expanding. It also tells you how much government is spending and on what. The Earthquake Commission is looking for a CEO with proven 'stakeholder engagement skills and excellent relationship management'. Let's hope he or she can speak plain english too. The Whakatane District Council is looking for a 'Manager of Whakatane Vision'. Arrgghh. Just don't spend the money and reduce rates by the same amount. The Manukau Institute of Technology (MIT) is looking for a 'Manager Tikanga Integration Group' to 'lead the development of Tiriti/Treaty of Waitangi Responsiveness across the governance and operational functions of MIT'. And some people wonder why our economy struggles to produce exports and improve productivity.
A master - Helen Barlow writes an excellent piece in the Weekend Herald on Japanese animation genius Hayao Miyazaki. My daughter loved 'Sprited Away' and I loved 'Howl's moving Castle'. I hope his new one Ponyo is as good.
I made a point of not reading Canvas this week because it was a Fashion special and I am not fashionable.
Listings shortage? - There didn't seem much evidence of a listings shortage in the 72 page Herald Homes this week. Hardly any of the hundreds of listings mentioned prices. Or debt. Barfoot and Thompson's pass in rate on this week's auctions was 30 per cent, which seems low to me. Barfoots also advertised 44 mortgagee auctions in black and white. I wonder how many are actually mortgagee listings. I've heard talk the 'mortgagee' tag is used to drag out the bargain hunters to properties that are simply normal sales. Harcourts had 11 mortgagee listings.
An unlikely hit - This piece from the New York Times about a surprise hit on YouTube is sort of inspiring. It's all about a video of a Jewish ceremony performed by the US army on German soil in 1994, the first such ceremony on German soil since Hitler.
Bankers win again - Bloomberg points out here that the world's leaders are fudging a move to regulate bankers' bonuses under a barrage of lobbying from bankers, although something may be done.
The Weekend read
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