Every weekday morning just after 6.50 am I talk with Marcus Lush on Radio Live about the latest news in business, markets, economics and personal finance.
I usually send through suggestions the night before or earlier in the morning. Sometimes we veer off into other areas or pick up on things that happen overnight.
But here's my suggestions as of 7.30 pm the night before. I'll update later with a link to the audio.
Marcus,
1. The government's estimate of its earthquake costs has blown out by NZ$4 billion to NZ$7.1 bln. This means we'll now run a budget deficit of NZ$18 billion this year, up from the NZ$16.7 billion originally estimated. But the government is sticking to its forecast of a surplus in 2014/15 and keeping the debt below 30% of GDP. This will be much tougher now, particularly because of a slowing global economy and the latest market ructions. See more here from Alex Tarrant and Gareth Vaughan.
2. I quite like Gareth Morgan's Big Kahuna idea for tax and welfare reform. There would be some big losers, including rich land owners and single parents (although some transitional arrangements could be made). It includes a single 30% tax rate on all income, including income from capital. It also replaces all benefits with a universal basic income. See more here.
3. Mighty River Power increased its underlying profit by 35% this year to NZ$443.1 million, in part due to increasing its electricity prices by 7.7%. This is just plain wrong. One of the reasons it could raise prices was because it revalued its assets up by NZ$412 million. This is nuts. Power companies say their costs are up and need to charge more to pay for more generation capacity. Then they proceed to arbitrarily increase the value of their existing assets to justify the higher prices. We better not sell this state owned asset, as much because its dividends are at least currently going back to the government. It paid total dividends of NZ$110 million this year, up 28% from last year. See more here at Scoop.
cheers
Bernard
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(Updated with link to Audio)
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