NZ 2023 Election Thread

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#3134268 26-Sep-2023 19:42

Handle9:

Basically privitisation encourages gross underinvestment as that pushes up commodity prices and ignores the wider economic implications.

Expanding on that. Public [insert sector here] requires funding, based on income from the Government. The Government "should" be non profit (apart from raising funds for capex). If its privatised, it should be more efficient as apparently Governments cannot run businesses. The issue is if a Government realised a net income, thats for the taxpayers. If its privatised, its not, its for the shareholders. The economy, the populous, the greater good is not relevant.

Take electricity for example. We had one, MED (Municipal Electricity Department) Now we have a myriad of generators and retailers, all based on shareholder profit, and duplicated roles. If we are a capitalist democracy its all about profit, that makes the world go round. But if we absorb neccesities that can be a problem. If its for electricity which is a necessity then its ok for heath education housing and infrastructure. make the most of it?

Food for thought

ockel

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#3134272 26-Sep-2023 19:57

tdgeek:

ockel:

Interesting that you have that perspective. Its clearly a discussion for another thread but I think the mixed-ownership-model has been an outstanding success for the Govt and its coffers.

Take Mercury for example. The Govt sold 49% for $1.7bn in 2013 and owns 51% of something worth $8.7bn and has received significant dividends since 2013 (FYI the TSR for Mercury in the 5 years to June was 127% cf the market return of 33%). At best it would have returned WACC on is pre-list value (probably less than WACC given most state owned organisations underperform relative to their cost of capital). There has been ~$1.8bn of value earned plus the dividends over 10 years.

From Mercury alone it received $141m of after tax dividends in 2023 that will have been reinvested in the country. Add Meridian and Genesis to your analysis and your argument kind of loses its water, dont you think?

If we'd stayed with the ECNZ model then taxpayers would be continuing to export electricity at sub-economic prices to the likes of Rio Tinto and Sumitomo. At least there is a demand for better pricing and the right process for determining investment in future generation (all without rigor when owned by the state (eg Onslow)).

The counterfactual is something like Ports of Auckland. A sub-economic millstone with poor governance and a wasted asset. Thats thanks to it being acquired in full by an organisation that doesnt understand economics.

But like I say, its another thread.

And FYI the real price of residential electricity has gone from 33c/kwh in 2013 to 31c/kwh in 2023 (both march years). Not exactly nose bleeds.

Perhaps we can privatise health, housing, education,infrastructure, garbage collections, traffic tickets?

We already privatise housing. As for the balance - garbage collections is based on PAYG or cost-neutral. Changes to firearms licensing are about making it cost neutral. Health - privatisation already occurs to some degree (~30% of medical specialists time is spent in private) and other systems use private insurance or ring-fenced funding) and the private hospital delivery is significantly more efficient than public. As for education - there is private education, does it perform better than public? Is the additional cost worth it or should one pay $500k more for the house across the road thats in a good school zone? Havent you essentially privatised the cost to some degree with zoning?

Do you actually understand the question you ask in a real world context?

Sixth Labour Government - "Vision without Execution is just Hallucination"

ockel

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#3134274 26-Sep-2023 20:07

Handle9:

The electricity market as a whole hasn't acheived at all what it was sold to the public. In particular residential power prices have increased by 50% in normalised dollar terms since 2001 while introducing gamification and price fixing into the market.

The cost of electricity has wide reaching implications for all aspects of the economy. Treating these types of assets in terms of what return they generate directly has been fools gold all over the world. Basically privitisation encorages gross underinvestment as that pushes up commodity prices and ignores the wider economic implications.

The UK water sector is another case in point. It's basically collapsing under it's own weight and looking for public handouts after transfering the economic value to it's shareholders.

Really? Industrial and Commercial prices were artifically subsidised by residential. I think the EPR showed that in its last iteration too. https://figure.nz/chart/iESFmFKyBYdVSdMp-hPWqIACEcd7yizTb

Residential - since 2006 the price has gone up by 3c/KWH. Over 17 years. Thats less than 1% per annum CAGR. Show me the 50% price increase in normalised terms.

https://figure.nz/chart/OQ6DQ4DNmpmBKANn

Sixth Labour Government - "Vision without Execution is just Hallucination"

ockel

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#3134275 26-Sep-2023 20:10

quickymart:

https://thespinoff.co.nz/politics/26-09-2023/groans-and-giggles-at-the-tvnz-young-voters-debate maybe this is a better write-up for you then Ockel.

Thanks but they lost me at the person asking about $7/cabbage. Who TF considers cabbage at that price. Shop around or substitute. Its called a seasonal vegetable for a reason.

More interesting is https://www.rnz.co.nz/news/election-2023/498824/national-s-muralidhar-nipping-at-swarbrick-s-heels-in-auckland-central-electorate-poll Auckland Central should be the Greens to lose especially fora high profile MP.

Sixth Labour Government - "Vision without Execution is just Hallucination"

Handle9

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#3134277 26-Sep-2023 20:17

https://www.iaee.org/en/publications/newsletterdl.aspx?id=949

tdgeek

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#3134279 26-Sep-2023 20:22

ockel:

quickymart:

https://thespinoff.co.nz/politics/26-09-2023/groans-and-giggles-at-the-tvnz-young-voters-debate maybe this is a better write-up for you then Ockel.

Thanks but they lost me at the person asking about $7/cabbage. Who TF considers cabbage at that price. Shop around or substitute. Its called a seasonal vegetable for a reason.

More interesting is https://www.rnz.co.nz/news/election-2023/498824/national-s-muralidhar-nipping-at-swarbrick-s-heels-in-auckland-central-electorate-poll Auckland Central should be the Greens to lose especially fora high profile MP.

Thanks but they lost me when I read this thread and its ALL about terrible shocking incapable Labour. I see very little if anything about the amazing, intelligent, capable National party. Why is that? Its easy to criticise the incumbent who has held the steering wheel though bad times. But its not possible to post how great National will be? And how? And why? I know Chris and Nicole are "good with numbers" they told us so.......

tdgeek

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#3134283 26-Sep-2023 20:29

ockel:

We already privatise housing. As for the balance - garbage collections is based on PAYG or cost-neutral. Changes to firearms licensing are about making it cost neutral. Health - privatisation already occurs to some degree (~30% of medical specialists time is spent in private) and other systems use private insurance or ring-fenced funding) and the private hospital delivery is significantly more efficient than public. As for education - there is private education, does it perform better than public? Is the additional cost worth it or should one pay $500k more for the house across the road thats in a good school zone? Havent you essentially privatised the cost to some degree with zoning?

Do you actually understand the question you ask in a real world context?

Do you actually understand the question you ask in a real world context? Yes I do and get a grip

Housing, I own a house so that is privatised? Landlords own houses so they are privatised? I guess so. Look where we are

Garbage.Mine isnt privatised

Firearms, do I renew my licence at GunsRforUs Ltd?

Medical. Yes, we can get every citizen to get Southern Cross or NIB, too easy, and too cheap

Education, again you are right, everyone needs to go to a private school, too easy

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ockel

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#3134342 26-Sep-2023 22:18

Handle9:

https://www.iaee.org/en/publications/newsletterdl.aspx?id=949

We're almost talking the same thing except your data should be updated and if you want to spin it to suit the academic narrative positively or negatively you can.

Check out the spend per household and the real pricing for current periods (not 2018 prices). https://www.mbie.govt.nz/assets/Data-Files/Energy/nz-energy-quarterly-and-energy-in-nz/qrss-march-2023.xlsx

Sixth Labour Government - "Vision without Execution is just Hallucination"

Technofreak

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#3135343 26-Sep-2023 23:20

BarTender:

Working directly with MSD for the last 3 years has been incredibly informative for my view about the efficiencies or lack thereof of government agencies: They are inefficient at delivering services.

Working directly in private enterprises in NZ and internationally for over 20 years in the majority of my career: They are just as inefficient at delivering services.

What happened when National just got into term they drastically cut the budgets to all agencies under the guise of the GFC especially their pet agencies they dislike that provide social services (MSD, Housing which is now KO, DOC) so they left the mess of reducing headcount to senior management to filter down across the org.

When that happened the good people leave, the rubbish people stay and expensive contractors are brought in to pick up the slack.

I agree large corporates are just as inefficient as government departments but that wasn't what I was talking about.

I was talking about the money spent on things like the spin doctores employed during Covid, the polytech re-organisation, the billion trees where good farmland was sold off to foreigners to plant trees, the Provincial Growth fund and the re-appropriation of Covid money for pet government projects.

See todays NZHerald. https://www.nzherald.co.nz/business/public-purse-the-final-5b-of-the-covid-fight-and-the-half-spent-quickly-on-other-priorities/3FJAFWYKCJA5XCHBHKCVPNWXDU/

Unfortunately you need a premium subscrption to read that. The government allocated (read borrowed at the taxpayers expense) an extra 5 billion for Covid and when it became obvious they didn't need it for Covid instead of not drawing down the left over money and saving the taxpayer the expense of paying it back the government quickly voted to use it on extra unbudgeted spending. If you or I borrrowed money for one thing and spent it on sometheing completely different that would be seen as fraudulent.

Yes, the cuts are coming, you won't have to wait for a National government. They have already started under Labour, you might recall the recent meeting between Grant Robertson and heads of government agencies where they were asked to find savings in their budgets. The police are not able to employ extra non sworn staff, which means the sworn staff will have to be tasked to do those jobs.

BarTender

The weird thing about crime "skyrocketing" is that the reporting has significantly changed. Instead of trying to pretend there is no housing crisis or that kids were living in cars this government has set to report crime accurately and the Justice ministry reporting on crime.

I think reporting accurately on crime and poverty is a good thing, it means the numbers go up but it doesn't mean we are sweeping the current state of our nation under the carpet.

The reporting may well have changed. I don't think that ram raids or dairy hold ups were any where near as prevalent 6 or 7 years ago as they are today. The barricades in front of liquor stores and the security grills and fog cannons at dairies have only become thing in the last 4 years or so.

Crime reporting is a statistic. As Sir Winston Churchhill famously said, There's lies, there's damn lies, then there's statistics.

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Handle9

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#3135347 27-Sep-2023 00:20

"There are three kinds of lies: lies, damned lies, and statistics" was popularised by Mark Twain who attributed it to Disraeli.

Winston Churchill had the description of the navy as "Rum, buggery and the lash" attributed to him

GV27

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#3135355 27-Sep-2023 07:45

Technofreak:

Yes, the cuts are coming, you won't have to wait for a National government. They have already started under Labour, you might recall the recent meeting between Grant Robertson and heads of government agencies where they were asked to find savings in their budgets. The police are not able to employ extra non sworn staff, which means the sworn staff will have to be tasked to do those jobs.

Bingo. That's just it. The age of austerity is already here, and it's a direct result of the overspending of the underspend on things with an ongoing obligation attached.

But somehow Robertson finding $4b to cut just before the election when they need fiscal credibility the most is fine, but if National suggest we can find some more savings, it's suddenly all hands to the pump and panic about 'slashing' the services that are already stuffed.

The reality is according to PREFU, Labour cannot afford anything they are campaigning on (which is why so many of their promises don't kick in until 2026 e.g. not this term) and anything they are promising that isn't currently funded is going to mean either more debt or more money coming out of services already under pressure. But I guess it's OK when they do it.

tdgeek

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#3135362 27-Sep-2023 08:36

GV27:

Bingo. That's just it. The age of austerity is already here, and it's a direct result of the overspending of the underspend on things with an ongoing obligation attached.

But somehow Robertson finding $4b to cut just before the election when they need fiscal credibility the most is fine, but if National suggest we can find some more savings, it's suddenly all hands to the pump and panic about 'slashing' the services that are already stuffed.

The reality is according to PREFU, Labour cannot afford anything they are campaigning on (which is why so many of their promises don't kick in until 2026 e.g. not this term) and anything they are promising that isn't currently funded is going to mean either more debt or more money coming out of services already under pressure. But I guess it's OK when they do it.

Don't follow that reasoning. Both are doing reducing spending. If some stuff isnt coming till 2026 I guess that means we cannot afford it now, seems sensible. Or we could have 15B now. Which is made out to be fully funded but its not. Sensible? Trustworthy? Credible? Add in NZ First who sensible people wont work with, such as Labour and ACT. Where doe the new and improved PGF come from? NZ First bribes are currently unfunded.

ockel

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#3135382 27-Sep-2023 09:36

Handle9:

https://www.iaee.org/en/publications/newsletterdl.aspx?id=949

Putting your quote in context. Nominal electricity prices have increased by 40% since 2007 but minimum wage rates have increased by 101% and Median HH income by 81% over the same period. So the proportion of HH income spent on residential electricity has fallen since 2007 - I'm sure the data is available to go back further but your premise that increasing prices are an indication of market failure doesnt hold water. Price has created signals that result in more efficient use of the commodity (much like user pays for water) and acted as the incentive to invest in marginal generation when its required based on perceived future demand. The alternative is a command structure with inefficient usage (waste rather than rational behaviour) and overbuild of capacity "just in case" a la Onslow.

What exactly is your argument based upon when you say "The electricity market as a whole hasn't acheived at all what it was sold to the public. In particular residential power prices have increased by 50% in normalised dollar terms since 2001 while introducing gamification and price fixing into the market."

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GV27

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#3135385 27-Sep-2023 09:55

tdgeek:

Where doe the new and improved PGF come from? NZ First bribes are currently unfunded.

You'd have to ask NZ First about that. And then both Hipkins and Luxon, given that they are both potentially in a situation that they need to court Winston, regardless of how much Hipkins suggests he won't do it.

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#3135390 27-Sep-2023 10:03

GV27:

You'd have to ask NZ First about that. And then both Hipkins and Luxon, given that they are both potentially in a situation that they need to court Winston, regardless of how much Hipkins suggests he won't do it.

Hipkins wont do it, been there done that. Cannot propose policies to voters then end up adding in unfunded billions for NZF, they made that mistake once, not again. If National wants to do what Labour and National have done in the past which failed its up to Luxon. Im unsure where the term coalition of chaos originated from, But National/ACT/NZ First is just that, which Luxon is open for, a tad ironic that

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