Labour won’t do well in this poll

Polish, you are being simplistic (or simple) to postulate that tax cuts alone bought National to power. Assets should be sold since the Government should not be in the business of owning assets, full stop.

IVV & Sarrs – My point is that decisions of both the L and the R on policy have affected the current state of the country in the world recession. To stand up and say that it is all a result of the vote buying promises of the Left is simply either naive or deliberately misleading. 
Sarrs When National first got back into power the top tax rate for an individual dropped from 37% (or was it 39%???) down to the current of 33%. It can easily be argued that this is now being funded via continued borrowing. That however would also be misleading and brings us back to the point that it is a a result of decisions from both the Left and the Right which see us where we are today.

Sarrs given that you are a chartered accountant if a Business man came to you and said I want to know the best way forward for me to invest in my business going forward.   I have two options
1. Borrow at 2-3% and cover that with income from an asset that is generating revenue at 6-7%
or
2. Sell the revenue generating Asset paying down some of the debt?

You see Sarrs I am not a Chartered Accountant. I am a business owner and in owning a business I have come to learn there are Chartered Accountants that take the time to understand my business, what I am trying to achieve and advise me accordingly. Then there are Chartered accountants that prepare the financials. In short not all Chartered Accountants are created equal.      
  

PP – that decision would depend entirely on your debt loading and your gearing ratio – if you have to borrow money to maintain assets and continue to operate them effectively and there is no end to this situation is sight,  despite what the return is, you are probably better off selling down and reducing debt. No business, or country for that matter, can be sustained on borrowing alone. Equity is a far cheaper financing option that debt is - particularly if your debt is in international currency and subject to fluctuations of international economies. Right now the ratio of debt cost vs investment income show debt to be the cheaper option, how long will this be the situation though? In the long run, if you take 50 years to repay that debt, it will eventually end up costing you more than the returns you would make off an asset that requires significant infrastructure investment to maintain viability. The country may be making net revenue returns on its investment in these assets but what is the required capital contribution? At the moment, any capital contribution will either come directly out of the net returns (reinvestment) or will be financed through debt. Bear in mind that debt cost isn’t accurately reported by SOEs because, as they are a wholly owned subsidiary of the Government, the debt costs are consolidated into the annual budget for the entire country and not apportioned across the assets that debt is being used to fund. You also have to consider the opportunity cost of this exercise, while the government may be sacrificing a 6% return, they are also reducing borrowing costs by 3.5% – a net result of only a 2.5% cost to the government. Consider this situation if the cost of borrowing increased or the return decreased…this is the government reducing its exposure to what is a highly volatile global economy. 

Re your example about the reduction in the top tax rate – no one was paying it. Labour left so many loopholes and shonkily written legislation that everyone piled their money into family trust and LAQCs to save tax. National have closed all of those loopholes and has rewritten essential legislation so that the IRD can take a more proactive approach in prosecuting those with deemed unacceptable tax positions. Just look at Penny and Hooper – a tax practice popularised while Labour were in government and now the loophole has been slammed shut by a National government. That was litigated almost since the beginning of National’s first term. 

Macca – See my post further below – don’t really want to have to go into not being R or L again.. I know thats hard for you to deal with but its a fact of life. Both sides are about the redistribution of wealth. The sooner you fellas realize this the sooner we can do something about it.

You continue to be misled by my comments DJ – I’m in no way shape or form either “left” or “right”…