Economy

KiwiSaver turned 5 years old yesterday - so says Andrew Gawith, one of the lead managers of Gareth Morgan KiwiSaver (recently bought out by Kiwibank because Gareth dislikes running a big business, and prefers fattening orcas up with tasty penguin treats)

“Many Happy Returns” says Gawith.

Presumably he doesn’t mean the returns of Gareth Morgan Kiwisaver that are happy. Nor does he suggest that those who entrusted their funds with GMI are happy about their returns either.

That’s because those returns were so shocking in the Morningstar calculations, that Morgan jumped up and down and removed his fund from the Morningstar analysis, conveniently preventing future investors from assessing GMI on a like-for-like basis with other funds.

So if you like your KIwiSaver funds building up, then bully for you and I hope you have a happy retirement. And if you are scratching your head over your unhappy returns, pick up the phone and have it out with your KiwiSaver provider.

This past week we have seen two companies in a similar industry show stark contrasts in the way they perform, operate and are owned.

The first company is owned by the public, it is riven by dissent amongst it’s highly unionised workforce, losing business, costing jobs and shrinking in size with major customers shifting their loyalty.

The other company is publicly listed, in the mixed ownership model with the majority shareholder the local authority. It has a workforce at harmony and just announced increased profits…to record highs.

Profit rose 22 per cent to $34.6 million for the six months ended December 31, the company said in a statement. That beat brokerage First NZ Capital’s forecast of $33.8 million and Forsyth Barr’s of $32.9 million. Sales increased 14 per cent to $105.7 million.

Total trade volumes across the port gained 9.6 per cent to 8.5 million tonnes in the first half, while container numbers increased 17 per cent to 344,081.

The shares have soared 58 per cent in the past two years as the port company cemented its place as the major departure point for bulk commodities including logs and dairy products and won an increasing share of the container trade by setting up an inland hub in south Auckland.

One is 100% public owned and the other is using the mixed ownership model. The differences couldn;t be more stark.

But we can add another Mixed Ownership Model tot he mix…as proff, if you will. Auckland International Airport which Brian Gaynor describes as:

Auckland International Airport has been the second best performing large cap company over the past decade as it achieved a value lift from $1.52 billion to $3.23 billion. As with all the other companies this performance does not include dividends and capital returns to shareholders.

The airport operates under a relatively light regulatory regime and the number of overseas arrivals through the port has increased from 1,348,200 a decade ago to 1,847,200 last year.

The company’s share of total New Zealand airport arrivals from overseas has increased from 70.6 per cent to 71.2 per cent over the past decade. This clearly makes it one of the country’s most important infrastructure assets.

The new Auckland Council should compare their two major infrastructure investments, the airport vs the port and start to wonder if Mike Lee’s public ownership model for the port is really performing as he promised.

You do have to wonder about Labour wanting to die in a ditch over mixed ownership, but then socialist have never really been blessed with an abundance of commonsense.

The Maritime Union has conducted themselves in an appalling fashion during their dispute with Ports of Auckland. They have basically lied from start to finish. It has only be through the efforts of bloggers than many of their lies have been revealed. Cactus Kate scotched the notion that they were poorly paid hard done by manual labourers, and the Ports of Auckland had the figures independently audited. It was Cactus Kate who also called them out for being sexist and racist.

The Maritime Union through their proxies in the Labour party and the CTU started an “information campaign a couple of weeks ago…now the Ports of Auckland has responded to the claims made in those documents and upped the ante on the Maritime Union by also filing “an application with the Employment Relations Authority (ERA) to rule on what it considers is a serious and calculated breach of good faith in the Maritime Union’s current publicity campaign.”

I wonder if Garry Parsloe and his union pals will now call off their all expenses paid trip to Sydney to attend the ERA sitting or will they cry off that until a time better suited to them?

Here is the POAL rebuttal document which arrived via my tipline a short while ago. As you will see the Union isn’t blessed with truthfulness.

POAL -Union-Misinformation 21 Feb

Germans are usually much more cunning with their money, but they got sucked in by the green economy scams:

Germany once prided itself on being the “photovoltaic world champion”, doling out generous subsidies—totaling more than $130 billion, according to research from Germany’s Ruhr University—to citizens to invest in solar energy. But now the German government is vowing to cut the subsidies sooner than planned and to phase out support over the next five years. What went wrong?

Subsidizing green technology is affordable only if it is done in tiny, tokenistic amounts. Using the government’s generous subsidies, Germans installed 7.5 gigawatts of photovoltaic capacity last year, more than double what the government had deemed “acceptable.” It is estimated that this increase alone will lead to a $260 hike in the average consumer’s annual power bill.

According to Der Spiegel, even members of Chancellor Angela Merkel’s staff are now describing the policy as a massive money pit. Philipp Rösler, Germany’s minister of economics and technology, has called the spiraling solar subsidies a “threat to the economy.”

Germany’s enthusiasm for solar power is understandable. We could satisfy all of the world’s energy needs for an entire year if we could capture just one hour of the sun’s energy. Even with the inefficiency of current PV technology, we could meet the entire globe’s energy demand with solar panels by covering 250,000 square kilometers (155,342 square miles), about 2.6 percent of the Sahara Desert.

Unfortunately, Germany—like most of the world—is not as sunny as the Sahara. And, while sunlight is free, panels and installation are not. Solar power is at least four times more costly than energy produced by fossil fuels. It also has the distinct disadvantage of not working at night, when much electricity is consumed.

Great, they put in alternate energy systems and their power prices is skyrocketing…I guess it could be worse they could have put in a RMA and hamstrung new generation capacity for decades.

An ad for the Central Institute of Technology in Perth, Australia. Watch out at the end…some squeamish types may get a bit upset.

No doubt some hipsters here will attempt a lame copy cat video.

If the Shanghai Pengxin bid for the Westpac farms formerly owned by the Crafar family doesn’t meet OIO requirements because it doesn’t add any value to New Zealand then presumably James Cameron’s purchase of a farm doesn’t either?

Shanghai Pengxin was going to spend $100 million upgrading the farms, it wouldn’t have been leveraged money wither like Fay’s bid…they were also going to open up markets in China and spend millions developing that as well for products other than milk powder.

Whereas Jame Cameron in his favour was going to live on the farm….looks like his little sale is rooted too now by this new interpretation of the law by an activist judge.

It was pretty bad when Fongterror was putting melamine into Chinese baby food products but now they are putting metal into butter:

Fonterra has recalled two ranges of butter after receiving complaints that metal objects were found in the products.

Fonterra managing director Peter McClure said two isolated complaints had been received and there were no reports of anyone being injured by the “fine metal objects”.

The products being recalled are: 500g Mainland salted butter, with a best before date of January 10, 2013 (batch CV12) and 500g Anchor salted butter with a best before date of January 26, 2013 (batch CV28).

“The voluntary recall is a precautionary measure as there can be no compromise when it comes to product quality or the health and safety of our consumers,” McClure said.

The products should be returned to the point of purchase in their packaging for a full refund and not be consumed, he said.

Don’t their product lines have metal detectors and rare earth magnets to test product for metal objects?

Labour politicians really know how to wreck an economy.

The Department of Labour has advised the Government against “Mondayising” Anzac and Waitangi Day holidays when they fall on the weekend, citing economic costs of up to $400 million.

Prime Minister John Key this afternoon said he’d now received advice from the Department of Labour on the issue after Labour MP David Clark’s Members Bill, which would give workers a holiday the following Monday when Anzac or Waitangi Day fell on the weekend, was drawn from a parliamentary ballot last week.

The advice pointed out that the next time either day fell on a weekend was in 2015 and it was not until 2021 that both Anzac and Waitangi Day fell on a weekend in the same year.

The department had told Mr Key the cost to the economy for an individual day if Mondayised was $200 million or $400 million in a year when both were Mondayised.

“The recommendation from the Department of Labour is not to Mondayise them,” Mr Key said.

it is bad enough that Len Brown is intent on wrecking the Auckland economy with 13 new tax ideas, but David Clark’s $400 million sting to Kiwi businesses really needs to be ignored.

If Labour wants to wreck the economy in this way then let them do it from the government benches when they eventually return to power.

National meanwhile should stay well away for it.

Once again it is up to Chris Trotter from the left to insert some sanity into the often shrill debate about free trade:

And if we, the people, were serious about preserving our patrimony, a majority of us would’ve voted for the political parties  the Alliance, NZ First, the Greens, Mana  which promised to do exactly that.

But, the closest the New Zealand electorate’s come to voting against free trade (27 per cent) was the election of 1993. In 2011, the anti-free trade vote was just 19 per cent.

It’s a little late, now, to shout: “Stop!”

The usual suspects are upset about the appointment of Catherine Isaac to a role overseeing the Charter Schools programme. But the best ever reason for actually appointing Catherine Isaac was provided by the head of the teacher’s union PPTA:

Mr Duff said the committee overseeing the trial was a “farce”, and Mr Banks was not interested in consultation with people in the sector.

One thing we have learned is that there is little point inconsulting with the feather-bedding teacher’s unions. It is a pointless exercise.

Listen to the full rant:

And following up that little tirade from Robin Duff is Catherine Delahunty, providing the best ever reason why Catherine Isaac is the best person for the job:

Delahunty said there had been no public discussion about what a charter school was.

“And then we get an appointment of somebody not from the education sector but entirely from the ideology of privatisation.

She certainly won’t be listening to the carping of the vested interests of the various teacher’s unions.

The government was hardly going to appoint equally political appointees from union hacks and flacks were they?