Report time – INZ Permanent & Long Term migration pt2
Filed under: Economics, Hubby's Views, Jobs & Work, Life in New Zealand, Property & General Investing
The contribution of Kiwi’s abroad to the NZ economy.
One of the interesting stand out comments in the DoL exec summary refers (again) to the Kea research. DoL cite this as “New Zealand’s diaspora is significant and our expatriate community is seen as an important contributor to New Zealand’s economic prosperity“.
Hmm, that sounds like a sound and solid contribution to the economy.
Only the Kea report cited doesn’t actually say that.
Kea talk about the potential for rich Kiwi’s living abroad to invest back in NZ.
They do identify that some of these rich folks are doing that already, but that there is huge potential for more investment from Kiwi’s who no longer live here.
Page 8 (section 3) of the Kea report makes for some fascinating colourful graphs. Although it is based on the assumption that listing on a stock exchange and having public share ownership must be a good thing and is the only way to run a successful company. Not an entirely fair and reasonable presumption. I know of quite a few world leading and competition beating companies that are entirely privately held.
It also assumes that Foreign Direct Investment (people abroad investing in your country) is a good thing too. Oh, right. Let’s just ignore all the FUD tub thumping about the Crafar farms sale then shall we. Foreign Investment in NZ is a bad thing, it must be. All those foreign types! We can’t possibly sell them bits of New Zealand! We will be ruined!!
FDI to NZ in 2010 is quoted as being $600m, while the Overseas Investment Office who approve who can buy NZ land maintain some interesting monthly stats.
2011 will be a bit better, thanks to James Cameron 
Not many people seem to mind him directly investing in New Zealand. But then he doesn’t look “foreign”. And he makes fun movies. So he’s alright.
The Kea report makes for fascinating reading, especially the theme’s that companies need to address if they’re looking for investors. Time for a sit down with a cup of tea, pen & paper to make some notes.
What are Fletcher’s playing at?
Fletcher Building is one of New Zealand’s largest companies. They are cutting hundreds of jobs, across Australia and New Zealand.
Speaking after the company’s annual general meeting in Auckland today, chief executive Jonathan Ling said the job cuts were ”significant”, although its total workforce globally comprises around 20,000 people. He didn’t know the exact number of redundancies, but said there had been a ”few hundred” job losses in Placemakers here and across the Tasman, 22 in Wellington construction and a further 200 job losses in Australia across the board.
Ok, so sometimes this is unavoidable. There is a recession, and because house sales are affected quite badly, and lending has dried up for people t0 buy, build or renovate I guess it’s not a huge shock. What is a huge shock is:
Meanwhile, the board today sought shareholder approval to increase the pool of directors’ remuneration by $500,000 to $2 million per annum
Now this is what I would call an “Occupy Wellington” moment.
How the hell can any company claim it has to make job cuts while at the same time wanting to use $500,000 of the saved money to pay the bosses. That is just wrong.
They make some excuses for why they should be allowed to do this, and apparently had 90% votes in favour via Proxy Votes (from experience that seems to amount to shareholders signing to say the fox gets to take charge of the hens). I’m all for high pay for good staff.
But I think it is just sickening that this is still going on, and at a time when there should be a spotlight on this kind of behaviour. Bottom line – if the company has $500,000 going spare every year for directors pay increases, it should use that to keep more staff on.
Occupy Humour
While the original basis of the “occupy” movement has a very powerful and (I think) necessary message (anyone wanting to see it in stark clarity – I suggest watching a film called To Big To Fail – currently showing on the free SoHo channel in NZ) – it has spawned a huge amount of humour.
I got this from Motley Fool via Twitter. It’s not a new cartoon – but as they say you can always rely on Calvin and Hobbes as much as you can Dilbert for condensing complex issues that us mere mortals can understand. This clearly explains one of the main issues I see behind the original movement.
Then theres the calls to Occupy Sesame St
And OccupyMordor
And Occupy The Death Star
And on a slightly more serious note – because I really don’t believe that blaming all this mess on a few people when the rest of us have indulged in many years of rampant overspending and gleefully taken every bit of credit we can get our hands on to enjoy lifestyles we couldn’t hope to afford:
New Zealand interest rates coming down.
Filed under: Cost of living, Economics, Interest Rates, Credit Cards & Mortgages in NZ
Last week the Reserve bank held the base rate steady – and this week, some of the main banks have cut thier mortgage rates. It means that Fixed Rates are coming down towards the floating rates – though the long term fixed rates are still way too high for me! Im using ASB rates for ease – but Westpac and Kiwibank have also dropped the rates.
As at 12:25:54 p.m., Thursday 15 September 2011
- Housing Variable 5.75 % p.a.
- Housing Fixed (6 Month) 5.85 % p.a.
- Housing Fixed (12 Month) 5.90 % p.a.
- Housing Fixed (18 Month) 6.10 % p.a.
- Housing Fixed (24 Month) 6.30 % p.a.
- Housing Fixed (36 Month) 6.70 % p.a.
- Housing Fixed (48 Month) 7.05 % p.a.
- Housing Fixed (60 Month) 7.40 % p.a.
- ORBIT Home Loan 5.75 % p.a.
As at 09:47:18 a.m., Wednesday 2 November 2011
- Housing Variable 5.75 % p.a.
- Housing Fixed (6 Month) 5.75 % p.a.
- Housing Fixed (12 Month) 5.80 % p.a.
- Housing Fixed (18 Month) 5.80 % p.a.
- Housing Fixed (24 Month) 6.00 % p.a.
- Housing Fixed (36 Month) 6.30 % p.a.
- Housing Fixed (48 Month) 6.70 % p.a.
- Housing Fixed (60 Month) 7.10 % p.a.
- ORBIT Home Loan 5.75 % p.a.
For New Zealand – these are REALLY low rates – but still way higher than you may be used to.
When 0.02% > 1%
The Occupy Wellington protest had been asked to move from its prime spot in the Civic Square (where most people would not be allowed to put up a tent and camp – tourists were forced to pay an excessive $5o to camp overnight way down the road from the Fanzone) because there’s to be a parade for the All Blacks tomorrow.
As of late this afternoon - they can apparently stay - which of course gives them a prime spot for the parade. And means less people will able to get prime spots because the space is filled with tents.
However, before the council kowtowed to the protesters – I have to admit I found their attitude a bit odd. The occupy protest is supposed to be about the fact that 1% of the people control 99% of the wealth. Now I have already blogged about how, on a global scale, this attitude lacks perspective, and that even the poorest people in the Western World are actually well off. There’s as big a divide between the protesters and the worlds poor as there is between between the “fats cats” and the protesters.
So it seems odd to me that the Occupy Wellington protesters would say
The protesters sent out a statement this evening saying they looked forward to welcoming the parade and would be providing face-painting, refreshments, food, and a hospitable atmosphere for All Blacks fans.
“After the overwhelmingly positive response we got from RWC fans passing through Civic Square on Sunday night, I’m really looking forward to tomorrow’s celebration.” says Richard, a supporter of the Wellington Occupy movement.
“Lots of the Occupy supporters are avid rugby fans, so I was really glad to be able to paint faces and offer a relaxing place for people to hang out as they went to and from the game. I’m looking forward to more of the same tomorrow.” Richard says.
What I don’t get (and maybe I’m just being a bit thick) is that the All Blacks account for 30 players out of 141,726 Rugby Union players listed in New Zealand. Which makes the All Blacks the 0.02% of those players. They are also funded by Adidas – a global corporation - which has been blasted for hideously overcharging the new Zealand people – who already earn lower wages than in other countries where Adidas were charging much less for the Jerseys. Adidas quickly moved to prevent resellers overseas from selling to Kiwis – forcing people here to pay the higher price.
So why can you protest about corporate greed and people earning too much money – and then support corporate greed and people who earn too much money if rugby is involved? Because the “trickle down” effect that corporate greed is supposed to create doesn’t happen any more here with Rugby than it does with any other commodity or business.
I also don’t get why Hubby is bad cos he earns more than most Kiwi’s but the All Blacks are heroes – when they earn more than most Kiwis.
So for a bottom of the ladder Super 12 player $105,000 would be the minimum annual income. And that’s not including the sponsor’s car.
Make the All Blacks and the game changes. For a start once you’ve worn the Black jersey you can slap another $50,000 on top of your salary. In relation to the national average wage we’re now starting to talk some serious money. Already we’re up to the mid $150,000.
Become a test regular and the figure $250,000 appears to be the going rate.
But become a test star and the numbers four, five and six come into play. That’s hundreds of thousands. Telephone numbers, the sort of money that most can only dream of. The players likely to be in that range of the current crop would have to be the likes of Doug Howlett and Richie McCaw. Andrew Mehrtens was known to be one of the big earners.
Good for them – but then I am all for people earning high wages. The average wage is about $47,ooo here.
“The last thing we want to do is to piss off rugby fans,” Mr Gunn said.
Well yeah – cos they would beat the crap out of you! You can complain when the police take you on – but I doubt they would get any sympathy if rabid all black fans get pissed with them.
The route has now been changed and it will avoid the protesters. Apparently there is no connection.
On the other hand I think some of the comments are a bit unfair. I don’t think you can assume that people protesting don’t have jobs – or indeed need a haircut or are unwashed and smelly. I just wish that I understood what the outcome is supposed to be and how it’s supposed to help.
Are you the 99%, 53%, 1% or who cares what %?
Filed under: Banks, Cost of living, Economics, General Budgeting, Interest Rates, Credit Cards & Mortgages in NZ
The “Occupy Wall St” protest has hit New Zealand this weekend – “occupying” Auckland, Wellington, Christchurch and Dunedin. I have tried to get my head around this – and I have to say I am failing miserably. When I started seeing “We are the 99%” posts coming up on my Facebook feed – I took a look at that and understood what they were saying.
We are the 99 percent. We are getting kicked out of our homes. We are forced to choose between groceries and rent. We are denied quality medical care. We are suffering from environmental pollution. We are working long hours for little pay and no rights, if we’re working at all. We are getting nothing while the other 1 percent is getting everything. We are the 99 percent.
I get anger that banks and financial institutions had screwed up, lost an awful lot of money, got bail outs, and yet still managed to find many millions of dollars to pay huge bonuses to the people who screwed it all up, while people lost homes and jobs.
Well who wouldn’t be pissed at that? I find it astonishing that governments are bailing private companies out, but there’s not a penny for us if we hit the skids. No one bailed us out when IBM got rid of hubby. We had to manage that ourselves – as does everyone. We have friends who have lost everything – no one bailed them out.
But I am also somewhat confused about why the blame is only being shoved on the corporates – and not those of us (ie just about all of us) who have spent the past decade or 2 spending vast sums of money we don’t have (ie debt) on cars, various iGadgets,clothes, shoes, posh food, holidays and houses. We have to take some responsibility here. Blaming the big bad corporation doesn’t change the fact that as a whole the western world gorged itself on debt and consumerism. No one forced us to buy iPhones. (I wonder how many people occupying Wall St still have smartphones, and are updating Facebook with their adventures via the very items the corporations sold us, and we willingly bought with money that the banks invented for us to spend, increasing the debt balloon that they now say is the source of all ill in the world).
But what has got me really confused was this has morphed into a strange anti-government, anti-money,anti-whatever-we-can-think-of-to-be-peeved-about-as-long-as-we-can-blame-the-anyone-who-is-richer-than-us sort of movement. Everyone is supposed to have a voice – no one is considered to be worth more than anyone else. This to me is an alien concept – in $ terms of course people are worth different amount – please never let a brain surgeon work on me if you only pay them the same as the cleaner. In human terms – I will always value kindness and decency in someone more than I will value someone being an arse.
I saw this video of the “assembly” in Atlanta – I gotta say – if that’s the alternative to the current political system we have – no thanks.
I am way too independent to sit there and parrot back what I am told to say – what are we? 5? Repeat after me “You are all individuals”…
So – are you the 99%? Probably not.
Global Rich List puts your income into world wide terms. And you may be surprised at how little income it actually takes to get you into the top 1% of earners in the world. Global Rich List doesn’t work for NZ$, but just £25,000 a year or $49,000 USD gets you there. At current exchange rates that works out at $49,500 or $61,500 NZD.
The New Zealand minimum wage is $27,040 a year which (using the UK£ to work it out – £13,600) puts you in the top 10.5% richest people in the world. And yet on that how many people still have mobile phones and internet access?
The median wage in New Zealand is $49,000. That means that 50% of wage earners in New Zealand are actually among the top 1% of earners in the world.
Those of us who pay for those of you who whine about all of that… or that… or whatever.
Ok – so this made me laugh. Can’t see this lot repeating back what they are told 3 words at a time and looking gormless.
So I won’t be occupying Wellington. To be honest I am too damn busy dealing with our current financial situation, budgeting our money, saving where and I can and spending what I have spare on stuff produced by people who also earn money. Some of them earn less than me, some of them earn more than me. Some of them are worth that much, some of them aren’t. I make that decision myself, and decide for myself where I will spend money, how much to spend, and whether to take on debt. If I take on debt – I take full responsibility for that decision, and for any mistakes I may make.
And I have absolutely no idea which % I am.
I am not a number – I am a free man .
How not to budget.
This popped up on Facebook today. I have no idea where it came from, but if I find out I will add a link.
And we wonder why US credit was downgraded
The numbers leading S&P to downgrade U.S. Credit:
• U.S. Tax revenue:_______________________$2,170,000,000,000
• Federal budget:________________________ $3,820,000,000,000
• New debt:_____________________________$1,650,000,000,000
• National debt:__________________________$14,271,000,000,000
• Recent budget cut:______________________$38,500,000,000
Let’s remove 8 zeros and pretend this is a household budget:
• Annual family income:___________________ $21,700
• Money the family spent:__________________$38,200
• New debt on the credit card:______________$16,500
• Outstanding balance on the credit card______$142,710
• Total budget cuts:_______________________$385
You can kinda see where the problem is.
New Zealand Interest Rate changes
Filed under: Banks, Economics, Interest Rates, Credit Cards & Mortgages in NZ
The reserve bank has held our base interest rate – and now it seems most of the “experts” how claimed the rate would be rising by the end of this year have changed their minds and now claim it will be march next year.
Apparently they will have to go but then some say they shouldn’t. Some say they should stay the same.
Helpful.
Interesting, I checked the ASB home loan interest rates – and they have gone down recently:
As at 01:33:46 a.m., Thursday 4 August 2011
- Housing Variable 5.75 % p.a.
- Housing Fixed (6 Month) 5.85 % p.a.
- Housing Fixed (12 Month) 6.15 % p.a.
- Housing Fixed (18 Month) 6.40 % p.a.
- Housing Fixed (24 Month) 6.65 % p.a.
- Housing Fixed (36 Month) 6.95 % p.a.
- Housing Fixed (48 Month) 7.35 % p.a.
- Housing Fixed (60 Month) 7.75 % p.a.
- ORBIT Home Loan 5.75 % p.a.
As at 12:25:54 p.m., Thursday 15 September 2011
- Housing Variable 5.75 % p.a.
- Housing Fixed (6 Month) 5.85 % p.a.
- Housing Fixed (12 Month) 5.90 % p.a.
- Housing Fixed (18 Month) 6.10 % p.a.
- Housing Fixed (24 Month) 6.30 % p.a.
- Housing Fixed (36 Month) 6.70 % p.a.
- Housing Fixed (48 Month) 7.05 % p.a.
- Housing Fixed (60 Month) 7.40 % p.a.
- ORBIT Home Loan 5.75 % p.a.
I’m still not fixing from my flexible rates.
Is it worth moving money back to the UK right now? Part 1
Filed under: Avalon's Money Thread, Banks, Economics, Exchannge Rate & Currency Transfers, General Budgeting
I am actually trying to work through this myself, so I thought I would write about it as I’m going along, and see what conclusions I come to. Just so you know, I actually don’t know the answer at this point.
First the reason for thinking about it: The exchange rate is historically low, running at about $1.90 to the UK£. So basically, all being equal, now is the perfect time to sell NZD and Buy UK£. In theory you would then sell the UK£ and buy back NZD when the rate gets to more like $3 to the £.
Let’s look at just $1000.
- Sell $1000 and buy £526 at current rates
- Then when the rate changes to (hopefully) $3.
- Sell £526 and buy $1578 NZD
- Profit: $578
- Which makes a return of a whopping 57% which is something you are not going to get very often.
So why wouldn’t you do that?
Well there’s a few things to take into account.
1/ Interest rates on savings.
In the UK you will basically get 0% interest on savings. So the £526 is unlikely to grow in the foreseeable future.
In NZ however, you can get 3.5 – 5% on savings.
So if we assume that you get the current savings rate at ASB, then the $1000 actually earns you $35.62 (compound interest) a year. Bear in mind that you pay tax on that.
Ok, so that means you need to be able to make at least 3.5% on the transfer back within a year to make it worth moving money to the UK.
I work out that the rate need to hit $1.967 to do that:
- 1035 / 526 = 1.967
Which means that in no way shape or form does the interest earned in NZ outweigh the gains you can make in the UK on the exchange rate, unless you believe that the $ will never go down in value much, and we are looking at a new “normal” of $2.00 to the UK£.
2/ “Time in the Market”.
Its often said that Time in the market is more important that Timing the Market with investing. Ie – don’t buy and sell quickly, buy and hold on for dear life.
So if you can earn $35 a year on your $1000, how many years can you keep the money in the UK and wait for the seemingly mythical $3 exchange rate and still beat the interest rate?
Waiting for $3 : £1 will net you $578 , so you can wait so that’s the equivalent of 16 years worth of interest at 3.5%.
Actually that’s not totally accurate – I worked out that because of compounding, it actually takes 13 years according to MoneyChimp
3/ Will you ever get $3 to the £ again?
Who knows. According to some experts the NZ$ will never go down in value to the same level it was. These are often the same people that say house prices will never go up by the amounts they did in the past. I actually think that’s as daft as saying at the height of the property boom that house prices never go down.
It’s cycles. Money works in cycles. It always has, and I personally don’t see why it would suddenly behave any differently.
But remember, each year, the exchange rate just has to go up a tine bit – the equivalent of an extra $35 ever year to beat the interest you would earn in NZ.
Part 2: What about comparing with a mortgage?
NOTE: This assumes you use a Currency Transfer outfit that has no fees. HiFX have recently dropped thier minimum tranfer to $1000 NZD and 500 UK$ to get fee free transfers.
NOTE 2: Ok – so looks like Hifx havent actually dropped there fees. For some reason I seem to have got a free transfer – but now when I try and do it again they would charge $12 or $9 for the above transfers – with the old limits of $10,000 or £5000 to get fee-free transfers. Bugger.
Why exactly should interest rates have to go up?
I just do not get this. There was a piece on the news last night about the large and rapid increase in the cost of living over the past year. This means inflation goes up (which just tracks how much prices have risen). Which means that interest rates should go up. Because that will apparently curb our spending and bring the rate of inflation down.
Except that the costs that are going up are food, power and petrol, as well as the luxuries. (A flat white will often now cost $4.50 whereas you used to be able to get one for $3.50 or even $3 even a year ago.)
Petrol went up by 20 per cent, food by 7 per cent and electricity by 7.8 per cent as the consumer price index rose 5.3 per cent in the year to June 30, the biggest rise since 1990.
The figure includes last year’s rise in GST but, even without it, inflation would still have been 3.3 per cent, above the Reserve Bank’s 1 per cent to 3 per cent target.
Now economists believe there is a 70 per cent chance of a rise in mortgage rates before December to try to curb inflation.
So why would you increase interest rates, putting up the cost of the mortgage, in order to give people even less money to put petrol in the car to get to work and earn the money they need to pay for the mortgage?
Why would you give them less money to put food on the table?
Why would you give them less money to heat their homes?
Because news reports are also saying that money is not being spent in retail stores. In fact an article in the Dom Post this morning actually bemoans that even the Kirkaldie and Staines winter sale is a bit of a damp squib – as opposed to the usual “queuing round the block” grand event.
And of course all of this goes hand in hand with little or no pay rises for the majority of people.
I can only hope that someone at the Reserve Bank of NZ can tell the somewhat obvious difference between inflation caused by people racking up credit to buy stuff they don’t need, and inflation caused by the basics rocketing up in price. It seems a bit obvious to me, but then I am not an economist.
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