"The Reserve Bank of New Zealand made net investment losses of NZ$265 million during the four months to October, "primarily relating to foreign exchange rate movements on financial instruments," "

They're shorting the NZ dollar again. Good boys - but do you think you could do it with a bit mroe conviction though please? We'd like to see a profit of at least $50bn after the next currency crash so don't muck around with a few 100,000. You need to get stuck in whilst we're above 70USc....

Heh Heh , good one . Bernard's 30 % correction will occur lickety-split !

Chris B,

Yes I hope they have taken my advice and are quietly selling a few hundred million NZ$ a day building up a large reserve of $ for the eventual repayment of overseas debts.

@raf - my view too - even better if they're holding a lot of it in Gold. I reckon we can afford to go a bit harder than a few hundred million though. In these days of quantitive easing its not like anybody else is abiding by rules of sound money at the moment. In fact you could argue that by not doing so the RBNZ is placing us at risk of both sovereign default and deflation. Really they have no option - lets quantitively ease into gold at at least NZ$1bn a day....

40 % , Thats exactly what the drop in my companies net profit was last financial year. No Prov tax to pay until May 2010 , and got a refund for overpaid provisional tax to IRD yesterday.

Can anyone advise why is this tax revenue dropping when main industries like dairy products and housing market are doing so well (with higher milk powder auction prices recently and rising house prices reported now and then)?

(Alex - why is this report not listed in your main column? It's rather difficult to locate it).

Can't the Reserve bank sell lots of NZD now and then introduce quantitative easing in six months time and buy them back???? Naughty or what?

Governments can probably get away with it and it would put a dent in the currency speculators if they knew the game was rigged.....

Trudy, I feel there has been a signifciant amount of wishful thinking being reported in the media (part of the propaganda used to ignite the economy when it has fallen over)
The dairy industry may feel some relief with current payout levels however increased operating costs on farm and financing recent short falls will be effecting bottom line taxable profit. Also after tax income in some cases will potentially be channelled into Fonterra capital raising.
To suggest the housing market is booming is a again wishful thinking. Certainly main centre averages have risen but volumes haven't returned to pre 2008 levels. Provincial areas are having mixed results and beach side propertys out side main centres are showing 20 ish% declines. Also the sale of housing isn't a generator of tax revenue, (basically tax free with a few exceptions) excluding real estate fees of course.
Something else to consider is that profit generated now has a lag period before it turns up as tax revenue, end of financial years and that sort of stuff.
That's my spin on things , I hope it's helpful.

Brian Gaynor write a good piece in the herald today

http://www.nzherald.co.nz/best-of-business-analysis/news/article.cfm?c_i...

28_yr_old
This is a great article especially on page 3. It's very enlightening.

Alex
Could you consider having it in your main column so that more could read and comment? Thanks.

Excellent article by Brian Gaynor . Is he on a TaskForce or TWG ? Doubt it , pity . Us older farts can remember that Norman Kirk's Labour government (1973-75) introduced a compulsory savings pension scheme . But the Nats. scuppered it in 1975 . Various estimates are that had the scheme remained intact 'til this day , in excess of $NZ 300 billion would be accrued . Boggles the mind as to our economy and standard of living , under such a scenario .

In 1992 Paul Keating introduced the compulsory superannuation scheme , of which Brian Gaynor references . NZ had a National government at the time . Jim Bolger PM , Ruth Richardson as finance minister . And in response to Australia's bold initiatives , the Kiwi counterparts did nothing . Nadda . No interest in that weird savings malarky at all .

After taking power in 2008 , Jelly Key's National government watered down the KiwiSaver scheme that Labour had introduced .

Can someone join the dots between these three threads , and conclude where our problem lies ?

A very good commentry by Brian that gives a context to understand the background and complexity of NZ economics . I voted for Nats ,however the more I reflect on the history of Nats,the more I am convinced that there is not much choice for kiwis and both parties have proved to be only interested in petty politics and to maintain the status quo .

Trudy

If you have useful skills there are still plenty of choices, but not too many in NZ.

When things really do pickup again, sell up and get out to Aussie while we still can

Little , land-locked Slovakia , one fifth the area of New Zealand , now boasts a GDP greater than ours . Similar population in each country . But they are 20 % of our land size , and less than 2 decades into their independence from the Czech Republic . ........................... Fecking heck , we are patheitic !!!!!!!!

saathi,
You wrote - "Don't you think our dollar is over valued ! Isn't it time to devalue by 25%"

Good point but how to devalue by 25% if overseas borrowing is mounting?
Do you have a solution to convince the policy maker(s) to implement it?

Roger,

Your ideas are there but would it be implemented and work in NZ? Nothing new, I give it a miss.

I am also keen to know how saathi got the 25% information.

I'm getting confussed++/what is fisical policy/Are we dwelling on inflated housing market/ depending on rich migrants/ What are the recent innovation or depend on borrowed technology/ Hard work,how's the job market/ Solution----hire work permit holders = minimum wages/ We are suffering ! Solution plse --realistic

Trudy / saathi : The ideas to put NZ onto a more balanced growth path are not original , nor radical , not even complicated . Our host , Bernard , has written many excellent posts on this subject , as has others such as Brian Gaynor / Gareth Morgan / Martin Hawes . The problem lies in government . Neither National nor Labour has addressed the issues facing us , for 2 decades now . They fiddle / faddle at the periphery , or lump upon us some vote-catching bribe . Both WFF and interest-free loans pushed Labour over the line in 2005 . Poor policy works . Stupid voters can't see it for the rubbish that it is . We need good governance to re-balance the taxation system , to encourage production , to encourage investment in business and innovation , research , and to strengthen our capital markets . Some hard work is required ...............Is that too much to ask for ?

If we continue to piss arse around , our youngsters to flee in droves , for the greater opportunities and rewards in Australia .

Five surgeons are discussing who were the best patients to operate on.

The first surgeon says, 'I like to see Accountants on my operating table because when you open them up, everything inside is numbered.'

The second responds, 'Yeah, but you should try Electricians! Everything inside them is colour-coded.'

The third surgeon says, 'No, I really think Librarians are the best; everything inside them is in alphabetical order.'

The fourth surgeon chimes in, 'You know I like Construction Workers. Those guys always understand when you have a few parts left over at the end, and when the job takes longer than you said it would.'

But the fifth surgeon shut them all up when he observed, 'You're all wrong. Politicians are the easiest to operate on. There's no guts, no heart, no balls, no brains, and no spine, and there are only two moving parts - the mouth and the arsehole - and they are interchangeable'

We need a laugh....and this is so APT.

Bernard.

Could you please get Matt McCarten to give us his 35 point plan for NZ in the next 15 years. Lets not miss out on his brilliant ideas to get us near parity with Australian lifestyle and economic performance.