thinking: relating- celebrating :-)

Both National and Labour are obviously thinking about the next election as battle lines are being drawn up.  On one hand National is signalling a sell-down of profitable SOE’s to ostensibly to reduce debt.  Labour has flagged the idea of no tax on the first $5k of income.

Both of these approaches are blatant vote buying gimmicks and at last National is reverting to type. Many of us have expected asset stripping and a hollowing out of government.

There is merit in taking stock of what a government should do but really both National and Labour must think they are dealing with a bunch of idiot voters.

In very simple terms a partial sell-down of SOE’s would be a way to reduce government debt but it would also lose dividend income from those assets. On the face of it, encouraging NZ investors to own shares in local utilities seems like a good idea.

But hang on – don’t we already own those companies as they are tax payer funded. If the National government wants NZ families to own NZ assets more directly why not set up something like the Consumers Trust that owns most of Vector . (worth approx $1.5 billion)

“The AECT’s key asset is a 75.4% shareholding in Vector. As the major shareholder in Vector and through our two Trustee directors on the Vector board, we make sure we fulfil our responsibilities to beneficiaries by maintaining proper oversight of Vector’s operations.”

That is not going to work though because John Key has obviously done deals in the back room to sell down to the usual suspects – that is the usual practice for right wing parties.

And – more to the point. There is a large tax cut to fund for National voters (mostly.)

Reducing debt is also makes a certain amount of sense but both National and Labour have been stung by this before. And as Bernard Hickey calculates

“The theory is that for the sale to make immediate sense then the dividends given up would have to be less than the interest costs of the debt not incurred by selling the asset.”

…In total, the four SOEs potentially up for sale generated total dividends last financial year of NZ$732.5 million and shareholder (government) equity stood at NZ$9.642 billion. This implies a combined (and very raw) dividend yield of 7.6% last year.

Does this compute?

Yet the government is currently having to pay around 5.5% for the new debt it is selling, mostly offshore…

So on the face of it the government is a net loser by selling half of these state assets and avoiding having to raise new debt.

The Treasury will no doubt do a much more sophisticated analysis, but this is a question the government and voters will have to ask in a very hard way before deciding to go ahead with asset sales.”

OK so the government really does think voter are just another mark waiting to be fleeced. John Key has a chance here to show real leadership instead relying on yet another shell game.

The rough calculation on National’s tax cut was reported as something like $15b (over 4 years) and the Labour no tax on first $5k is $1.4b (per year?) so those amounts are hugely different in scale and $15b is a monkey on Key’s back.

There is probably a case to be made for selling down Air New Zealand but I won’t be buying any shares. Prices of aviation fuel will increase much faster than they can get smarter planes into service so a sell down there is better now than later.

I’m not sure what 24% of Air New Zealand is worth. A quick look at their share price says market cap is $1,551,284,628 and so even if it could be done there is only $300 -$360m there which is loose change on an annual government spend of $70b. (leaving aside that share prices change.)

And Phil Goff. Its time for him to step aside and let Cunliffe have a go. The party would explode but as as the cliche goes “its better to burn out than to rust”.

Bring back the Values Party. And I’m only half joking. If Labour doesn’t wake up we will need a revived Green party or something new in case Winston does his Rip van Winkle act one more time.

Both Labour and National need to rethink the green issues because we all need to do that.

Update: On Feb 2 – the PM announced that NZ election is on November 26 after the Rugby world cup – when everyone would be feeling good about that event and would hopefully vote for him. Actually he didn’t quite say that but this is clearly an afterglow election with a long lead time.

Planning for the next WordCampNZ event in Wellington is in full swing. As a trustee and one of the key organisers we are busy confirming speakers, sponsors and selling tickets.

If you are in Wellington or visiting that way plan to come along. It all happens on Sat 19th of Feb at Te Papa and for a half day on the Sunday.

We have 6 speakers confirmed with more to come and a super panel with some big names on the Saturday afternoon. Here is my list of 7 reasons to be at WordcampNZ this year. Not really in order

1. Michael Brandon is NZ’s top SEO guru and he knows WordPress inside out.
2. Paul Gibbs is a BuddyPress world expert from UK. BuddyPress is like facebook where you set your own terms of service.
3. David Farrar runs NZ’s busiest blog with 500-700 comments a day.
4. Julie Starr rocks on media and blogging at Evolving Newsroom.
5. John Ford is an expert on WordPress Security
6. Justin Sainton is talking coupons – a whitehot space now – NZ’s Groupy has just been sold to yellow
7. Super panel with Lance Wiggs and Richard McManus (RWW)

Wellington that week is going to be a blast with the well respected webstock conference on just before WordcampNZ.

I got to represent WordCampNZ on Radio Wammo Live today giving a quick run through of what the event is about. This is radio which is video streamed live. Video link is below.

Working online in the marketing arena in NZ I’d say that I got got hit by the US global financial crisis up to one year before many other local businesses.

The only good thing about that; was experiencing an upturn a bit sooner than other local businesses. But it has been a fragile recovery in many respects.

In talking with experienced business people (with long memories) there has been a deep sense that our whole system is quite unstable and all those references to great depression are apposite.

The reasons for the great depression are still being debated as are theories on the global financial crisis that we are still working through.

Despite local (NZ) surveys of business confidence picking 2011 as a much better year ( and I think they are right) there is still an underlying unease that our business foundations have been very much shaken to the core and found wanting.

I’ve written before about the need for new business models and more sustainability thinking.

This time, however it is our entire cultural ecosystem that is at fault and we are in uncharted waters to the extent that a whole new paradigm is needed.

Raf Manji over on his excellent Sustento site makes similar points every month. Even when he is commenting on entertainment ..Gekko movie

The disconnect between the financial markets and the real world has grown so wide that a chasm has been created, a big black monetary hole which is dragging us all in. This film has much more impact than Mike Moore’s recent treatise on capitalism because it paints a truer picture: the excess, the egos, the glamour….and the frailties of us all.

There has been a film about some of the wider issues quietily clocking up internet views for the past 3 years – it is called Zeitgeist: Moving Forward and is about “system disorder”.

We are suffering from major structural system problems in our society. The values that we claim and like to support have been supplanted by more mercenary and life threatening behaviour.

“the main threat to human survival was nature – today it is culture”

SYNOPSIS: Zeitgeist: Moving Forward, by director Peter Joseph, is a feature length documentary work which will present a case for a needed transition out of the current socioeconomic monetary paradigm which governs the entire world society.

This subject matter will transcend the issues of cultural relativism and traditional ideology and move to relate the core, empirical “life ground” attributes of human and social survival, extrapolating those immutable natural laws into a new sustainable social paradigm called a “Resource-Based Economy”.

Having seen this movie I do like that it underlines the finite resources and systemic failure of our current economic systems. These are important questions – often obscured by too much theory.

The answers; as it turns out are not so easy to arrive at.

In that sense it is not much different than say Triple Crunch – Economics as if People & the planet Mattered, Transition Towns, The Oil Drum and others seeking to address our rampart out-of-control consumerism and headlong rush to the next economic crash. In NZ the good people at Grey Lynn 2030 as part of transition towns should show an interest in this movie.

I also liked the reference to the Equality Trust and their work on the “social determinants of health and on the societal effects of income inequality”.

Some of the talking heads would have been better introduced if we knew a bit more about them and current roles. Those talking head academic experts should be listed over here on the IMDB entry but as at post time they are not although Richard Wilkinson of Equality Trust looks to be one of them.

Dr James Gilligan is one of the experts (strangely Gilligan is not even listed in the credits) – he mis-pronounces Dunedin and refers to a longitudinal health study there but without giving credit to the Otago Med School. I mention this because it is useful to check sources and that is much harder to do if they are glossed over or not listed.

I would have thought Theodore Dalrymple (Dr Anthony Daniels might have been better in this part but I suspect that Dr Daniels views on causes and solutions would have been in conflict with the overall thesis.

I also found the soundtrack a little obtrusive at times especially in the first 40 mins – but a bit of a remix there would solve that. At one point I thought there may have been a party next door but that was an attemt at ambient drumming.

What makes it film a bit different is its blind faith in rational pure science and over reliance on altruistic technology as the answer to a broken system. There is a fair amount of coverage of the Venus Project and ideas of engineer Jacque Fresco in the last part of the film.

That thinking owes a great deal to the Technocracy movement of the 1920-1930′s and is perhaps the weakest point of the film.

There have been 2 earlier films in the series and robust set of discussions called an earlier version of the Venus Project a hoax. (I note that the arcosanti project in progress for 40 years had similar ideas but seems to be a bit stuck.) It also appears that the 2 earlier films may have been a bit out there with conspiracy theories so that is thankfully gone in this – the 3rd film of the series.

The interesting point about all of these different groups (transition towns etc.)  is that many of them are beginning to understand that our current monetary systems are just not working out and something must be done – urgently.

The frustrating part is that, yet again we have another bunch of people looking to be a movement who don’t appear to be talking to others already active in a similar space.

If the zeitgeist people want to build a movement they need to lose the wacky science and concentrate on clearly defined themes and messages that are supported by environmental activists, monetary reformers and concerned citizens.

I’m hopeful that the Zeitgeist movement as they like to be called actually has some economists on the payroll somewhere and can make better sense of this because we do need better outcomes for all.

I had higher hopes for this film, but for now Triple Crunch and Transistion towns make way more sense to me.