Debate: Abolish Banking Insurance?

Walter E. Williams: Government, The Market, and Minorities

Margaret Thatcher’s economic legacy | The Economist

A conversation with Ronald H. Coase

Spot on

Image

Privatizing local bus services could save $5.7 billion

https://twitter.com/FurchtgottRoth/status/717362503160881152

Can private enterprise save our public lands?

Saving Ocean Fisheries with Property Rights

Water Policies for People, by David Zetland

Will @JulieAnneGenter’s KiwiBank plan bankrupt KiwiPost? @JordNZ

The Greens are followed up on an earlier suggestion by Julie Anne Genter, the Green’s Shadow Minister of Finance, that KiwiBank should be refocused to keeping interest rates low. To that end, it would not be required to pay dividends to the government to help fund the effort. KiwiBank has only just started paying dividends to its parent, KiwiPost.

If that were to be the case, that KiwiBank was no longer be required to pay dividends, that would blow quite a hole in the balance sheet of its parent company KiwiPost.

KiwiPost owns the share capital of KiwiBank, which must be valued on a commercial basis to pass auditing as a state owned enterprise which is commercially orientated.

image

Source: Historic $21 million dividend paid by state owned bank Kiwibank | interest.co.nz.

That share capital owned by KiwiPost in KiwiBank would be have to be written off if KiwiBank were to pay no further dividends because it is no longer commercially orientated entity. Such a write-off of its investment in KiwiBank would write off most of Kiwi Post’s equity capital.

image

Source: Some 14 years after it launched and nearly NZ$830 mln later, Kiwibank predicted to become a self sustaining dividend payer in 2016 | interest.co.nz.

The reason why state owned enterprises are required to be valued on commercial principles is to ensure that any subsidies or other favours sought by politicians show up in the profit and loss statement or the balance sheet through asset write-offs. Section 7 of the State-Owned Enterprises Act 1986  non-commercial activities states that:

Where the Crown wishes a State enterprise to provide goods or services to any persons, the Crown and the State enterprise shall enter into an agreement under which the State enterprise will provide the goods or services in return for the payment by the Crown of the whole or part of the price thereof.

This statutory safeguard ensures that the cost of any policies proposed by ministers, and the Greens are very keen on transparency and independent costing of political promises, are plain to all.

% billionaires who made their money through political connections or resource industries

The 1826 Billionaires in the Forbes 2015 list are classified as rich through political connections if they made their money through past political positions, close relatives or friends in government, or questionable licenses, privatisations or resource extraction industries.

Source: Caroline Freund and Sarah Oliver, The Origins of the Superrich: The Billionaire Characteristics Database (2016).

All privatizations were included in the politically-connected/resource-related category despite my data source acknowledging the possibility that the new owners may have transformed the company. Resource billionaires were all deemed to be lucky or cronies by my data source rather than diligent as some most certainly were. This is something of a slur by my data source given the industriousness of some resource billionaires some of whom were even geologists.

Political cronyism is a path to billionaire wealth mainly in the developing countries. Less than 10% of Chinese billionaires made their money through political connections, which is surprising.

NZ taxpayers made a $20 million profit on its $30 billion state owned enterprises portfolio!

KiwiRail is such a dog that the Treasury reports on the rate of return to the taxpayer on the state owned enterprises portfolio by excluding KiwiRail from its calculations of rates of return.

The Treasury doesn’t do similar adjustments for state owned enterprises that are performing unusually well, so total shareholder return figures should be reported without this KiwiRail exception. If you buy a dog, you should own up to the fleas it spreads to the rest of your portfolio.

Trying to pretend that KiwiRail is just not there, or survives on the largess of someone other than the one and only New Zealand taxpayer, does no one any favours. This KiwiRail exception will have to apply for at least 10 years to the annual commercial portfolio report of the Treasury. I want to know the total shareholder return, including KiwiRail every year without exception or special pleading.

That total shareholder return of -8.2% in 2012 is worthy of comment too:

The portfolio generated a net loss after tax of $1.8 billion driven by a restructuring of KiwiRail’s balance sheet and reductions in bottom line results for Meridian and Solid Energy, affected by hydrology and coal market deterioration respectively.

Adam Smith on government business enterprises

Image

The curious attitude of government owned businesses to rising demand

Image

Six of the world’s seven billion people have mobile phones – but only 4.5 billion have a toilet, according to a U.N. report

Image

Previous Older Entries Next Newer Entries

Austrian Political Economy

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Peter Winsley

Economics, and such stuff as dreams are made on

BooksIcon.com

Reading lists

Climate Audit

by Steve McIntyre

Green Jihad

Your source that tells the truth about the environmentalist movement's holy war against mankind

Bowalley Road

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

History of Sorts

WORLD WAR 2,EIGHTIES,MUSIC,HISTORY,HOLOCAUST

Notes On Liberty

Spontaneous thoughts on a humble creed

Tudor Chronicles

News, reviews and talk all about the Tudors

The Logical Place

Tim Harding's writings on rationality, informal logic and skepticism

Karl du Fresne

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Great Books Guy

Reading The Classics

Velvet Glove, Iron Fist

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

@STILLTish. Gender Abolition

Examining Gender Identity ideology and its impact on Women's Sex based rights and Gay Rights. d protections. Exploring how this has taken such firm root in Western societies (Cognitive & Regulatory Capture).

200-Proof Liberals

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

What Paul Gregory is Writing About

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Kids Prefer Cheese

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Offsetting Behaviour

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

JONATHAN TURLEY

Res ipsa loquitur - The thing itself speaks

Adventures of a Tudor Nerd

Exploring the 16th Century and Beyond

Weapons and Warfare

History and Hardware of Warfare

Conversable Economist

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Barrie Saunders

Thoughts on public policy and the media

The Victorian Commons

Researching the House of Commons, 1832-1868

Coyote Blog

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

The History of Parliament

Blogging on parliament, politics and people, from the History of Parliament

Catallaxy Files

Australia's leading libertarian and centre-right blog

Books & Boots

reflections on books and art

Legal History Miscellany

Posts on the History of Law, Crime, and Justice

Sex, Drugs and Economics

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Vincent Geloso

Economics, History, Lots of Data and French Stuff

Climatism

Tracking Anthropogenic Climate Alarmism

Point of Order

Politics and the economy

FREEcology

Libertarian environmentalism

Doc's Books

A window into Doc Freiberger's library

Newmark's Door

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Media Myth Alert

Calling out media myths

Uneasy Money

Commentary on monetary policy in the spirit of R. G. Hawtrey

European Royal History

Exploring the History of European Royalty

Tallbloke's Talkshop

Cutting edge science you can dice with

Marginal REVOLUTION

Small Steps Toward A Much Better World

%d bloggers like this: