Tuesday, July 19, 2011
Ho-Hum Rupert Murdoch
The fuss over Murdoch's papers is a bit ho-hum really. To titillate the public with ever more jucy tabloid headlines in an intensely competetive environment, the newspapers are too often forced to either pay for or steal salacious content. Phone tapping, cash payments, and cosy relationships with the pollies, sadly are simply the tools of trade and I bet News Corporation isn't alone We are witnessing the endgame for newsprint. The real news is available for free on the Internet.
Thursday, July 14, 2011
Labour's dumb Capital Gains Tax Policy
A big thumbs down to Goff's CGT. Taxing capital without a comprehensive review of our whole tax system is both dumb and dangerous. Even more dumb is to begin your election campaign by promising more tax.
It couldn't be a worse time than the present to talk about taxing assets, especially property. Since the global financial crisis, NZ home and farm values have been treading water, kept alive mainly by the grace of the Australian banks in controlling the rate of morgagee sales and Mr Ben Benanke's money machine keeping global interest rates artificially low. We've been collectively kicking the can down the road seeking time for rising incomes or inflation to restore some semblance of balance. So far the strategy has worked but it is highly at risk should unemployment or interest rates rise.
Along comes goofey Goff and his mates who think they can fix the original property bubble by a new tax long after the horse has bolted. They'll fix it alright! The tax will likely destroy market confidence and unleash a wave of deflation of house and farm values. Look at what is happening in the USA and then consider how inflated the ratio of income to house values is in NZ. What would a 30 - 50% drop in values do to our economy. Those most affected will be the labour supporters themselves, and the battlers, as they struggle with their underwater mortgages.
I'm not against comprehensive tax reform but Labour's policy is a very dangerous attempt to harness the green eyed monster of the left.
It couldn't be a worse time than the present to talk about taxing assets, especially property. Since the global financial crisis, NZ home and farm values have been treading water, kept alive mainly by the grace of the Australian banks in controlling the rate of morgagee sales and Mr Ben Benanke's money machine keeping global interest rates artificially low. We've been collectively kicking the can down the road seeking time for rising incomes or inflation to restore some semblance of balance. So far the strategy has worked but it is highly at risk should unemployment or interest rates rise.
Along comes goofey Goff and his mates who think they can fix the original property bubble by a new tax long after the horse has bolted. They'll fix it alright! The tax will likely destroy market confidence and unleash a wave of deflation of house and farm values. Look at what is happening in the USA and then consider how inflated the ratio of income to house values is in NZ. What would a 30 - 50% drop in values do to our economy. Those most affected will be the labour supporters themselves, and the battlers, as they struggle with their underwater mortgages.
I'm not against comprehensive tax reform but Labour's policy is a very dangerous attempt to harness the green eyed monster of the left.
Tuesday, July 5, 2011
Its time for New Zealand's frontier-forestry to grow up.
New Zealand needs more trees, whether native or exotic, because forests benefits the environment in so many ways. Most important is their ability to reduce flood flows and soil erosion on our steep unstable hill country. There are many striking examples that aptly show how effective forests can be reducing the extent of landslides when compared to pasture on the same topography.
The problem is that the way we harvest our exotic forests destroys these protective functions. Despite the existence of an "Environmental Code of 'Best' Practice" too great an area of steep forests end up as a trashed landscape littered with slash, log ends and bare soil. Radiata pine takes 30 years to mature. Therefore roughly 1/30th of the NZ's area of radiata plantation (nearly 60,000 hectares) is clear-cut every year. The landscape remains stark and vulnerable for at least five years until a new forest is established. Any high rainfall storms on hill country can cause more erosion in logged forests than pasture because so much soil and debris is exposed.
In the past year China's demand for timber has reinvigorated forestry, not before time, as the previous years of dismal returns nearly crippled the industry. Unfortunately, the renaissance has coincided with a period of exceptional storms. The inevitable result has been landslides of forest debris flooding rivers and silting local estuaries. The damage is all too visible around Nelson and the Coromandel hill country.
Surely it's time the forestry industry lifted its game. The logging of whole hillsides in one swoop is frontier forestry. Our forest owners could show a little more sophistication on sensitive landscapes by better applying their own code of practice. Additional techniques such as using smaller felling areas, and even maintaining a continuous forest cover, are standard practice overseas but are implemented here by only a few enthusiasts. They may cost a little more but the environmental gains would be enormous. Better the industry takes the initiative itself than wait for local Councils to force more inflexible rules.
The problem is that the way we harvest our exotic forests destroys these protective functions. Despite the existence of an "Environmental Code of 'Best' Practice" too great an area of steep forests end up as a trashed landscape littered with slash, log ends and bare soil. Radiata pine takes 30 years to mature. Therefore roughly 1/30th of the NZ's area of radiata plantation (nearly 60,000 hectares) is clear-cut every year. The landscape remains stark and vulnerable for at least five years until a new forest is established. Any high rainfall storms on hill country can cause more erosion in logged forests than pasture because so much soil and debris is exposed.
In the past year China's demand for timber has reinvigorated forestry, not before time, as the previous years of dismal returns nearly crippled the industry. Unfortunately, the renaissance has coincided with a period of exceptional storms. The inevitable result has been landslides of forest debris flooding rivers and silting local estuaries. The damage is all too visible around Nelson and the Coromandel hill country.
Surely it's time the forestry industry lifted its game. The logging of whole hillsides in one swoop is frontier forestry. Our forest owners could show a little more sophistication on sensitive landscapes by better applying their own code of practice. Additional techniques such as using smaller felling areas, and even maintaining a continuous forest cover, are standard practice overseas but are implemented here by only a few enthusiasts. They may cost a little more but the environmental gains would be enormous. Better the industry takes the initiative itself than wait for local Councils to force more inflexible rules.
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