Daily review 10/10/2024

Written By: - Date published: 5:30 pm, October 10th, 2024 - 12 comments
Categories: Daily review - Tags:

Daily review is also your post.

This provides Standardistas the opportunity to review events of the day.

The usual rules of good behaviour apply (see the Policy).

Don’t forget to be kind to each other …

12 comments on “Daily review 10/10/2024 ”

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  1. SPC 1
    10 October 2024 at 6:05 pm

    When the council decided to sell the Wellington Airport shares back in May, they were valued at less than $300M.

    Now they are valued at up to $500M, they have decided to change their decision and not to sell.

    That’s too high: at 31 March, Infratil valued its 66% share at $624m, implying $321m for the Council share. Ultimately, the highest bidder would decide.

    https://wellington.scoop.co.nz/?p=160833

    The dividend paid this year was $20M, the average had been under $15M pre COVID.

    For mine $500M is the sale price. $20M indicates a 4% dividend return.

    Genesis is over 9% dividend return at the current share value. A good buy with interest rates falling (the share value should go back up).

    But for risk management (and continuing CG rather than a short to medium term one) a growth fund investment – Reserve Fund.

    https://www.1news.co.nz/2024/10/10/wellington-council-overturns-decision-to-sell-airport-shares/

    • Ad 1.1
      10 October 2024 at 7:49 pm

      Big congratulations to the Labour councillors that killed the sale.

      In your eye Tory.

      • SPC 1.1.1
        10 October 2024 at 8:14 pm

        Meh. Economically illiterate.

        And they voted with Diane Calvert, Ray Chung, Tony Randle, Nicola Young – who would have voted with a right wing Mayor to sell. Their purpose in re-litigating the 10 year plan will not be good.

        Council officials have said selling the shares would help solve two serious financial risks: the council’s $2.6 billion under-insurance problem and the lack of diversity in its investment portfolio.

        The plan involved reinvesting the proceeds of the sale into a perpetual investment fund.

        They said it could also result in the need to cut $600m from the council’s capital spending to create additional debt headroom to respond to insurance risks.

        And then there is this

        Officials previously advised that reversing the decision on the airport would require an amendment to the Long Term Plan, including consulting with the public again on options to sell or keep the shares, to be finalised by June 2025.

        The next election Oct 2025.

        https://www.nzherald.co.nz/nz/wellington-city-council-votes-to-stop-controversial-airport-shares-sale/JQ7BP4QPXNBAHBK7D7R47QFORM/

        • Shanreagh 1.1.1.1
          10 October 2024 at 10:08 pm

          Officials previously advised that reversing the decision on the airport would require an amendment to the Long Term Plan, including consulting with the public again on options to sell or keep the shares, to be finalised by June 2025.

          This perpetual loop was mentioned and possible consultation again after the 'no' vote was mentioned during the debate. 'Apparently' this is not going to be relitigated by consultation on an amended LTP. The 'no' vote will stand and the work will start on how to give effect to it by rejigging budgets.

          WCC is a council that thrives on nice to haves and farms out the boring bits like transport needs, not to mention water. NZTA has pulled 99% of WCC's wishlist for transport items. Probably these would have been included in the LTP budget and not sought from Govt funds in a Council focussed on nuts and bolts.

          I don't believe these are financially illiterate people. Being from the Left and going through the last lots of asset sales by both Labout and the Nats they have little to recommend them. Selling family silver that is dividend producing is like swapping credit card debt for the 6 month free interest period but never paying it back. Once family silver has gone its has gone and sale proceeds money just slips through the fingers at WCC.

          As for officials, it must be unprecedented for a CEO to have to tell staff not to go on social media as WCC staff and support the sale…..well really. Watching them today, they did little to engender confidence in fact a CE on another site felt that the advice given by CFO at one stage was incorrect.

          Make no mistake this rebudgetting is going to be hard but if it has the effect of moving the focus away from 'nice to haves' and onto the 'boring bits' then I'd be happy. I suspect I'd not be the only Wellingtonian feeling this way.

          I for one actually feel proud of those who voted no. All sorts of different people adamantly voting for 'Wellington as a city' rather than toe-ing some party political line seems pretty positive in Welly at the moment. Several of us feel that Welingtonians were caught in a double whammy with unsympathetic-to-the people govt and unsympathetic-to-the people local govt.

            • Shanreagh 1.1.1.1.1.1
              11 October 2024 at 5:30 pm

              Yes good article and good comments on it. He has used the analogy of moving kiwisaver funds and I used the analogy of moving credit card debt….great minds ha ha.

              This will be a very difficult time. More so if staff continue to put up blocks to Councillors getting information or bore them witless as they tried to do yesterday. (Staff seem to need some tips on how to provide info verbally to decision making bodies)

              • SPC …
                12 October 2024 at 7:00 pm

                They have an insurance shortfall.

                The council's 2024-2034 Long-term Plan, adopted in late June, called for the profits from the airport shares sale to be invested to help cover the cost of the city's $2.6 billion insurance shortfall in a major earthquake.

                The airport shares did not help here, near impossible to sell after an earthquake, offshore growth/wealth fund assets would.

                Council staff said $400-600m will need to be cut from the budget.

                I presume they mean begin to create a provision for the insurance risk, by cutting spending/capital works

                though they have called it creating

                additional debt headroom – 1.1.1

                And then this.

                Councillors must also work to repair their damaged relationship with Māori.

                The vote went against a precedent where iwi representatives have a say on long-term plan decisions.

                And the gloomy prospect of facing up to difficult stuff, and doing this better.

                "We'll be looking at our capital programme overall, and that includes things like the pipes, transport, social housing, and possibly our service levels," Whanau said.

                https://www.1news.co.nz/2024/10/11/division-at-wellington-city-council-after-airport-shares-sale-overturned/

  2. SPC 2
    10 October 2024 at 6:44 pm
    • Budget deficit $12.9 billion vs budget forecast $11.1b
    • Tax take $119.9 b vs forecast $118.3b
    • Total revenue $167.3b vs forecast $165.0b
    • Total expenses $180.1b vs forecast $175.6b
    • Net debt % GDP 42.5 vs forecast 43.1%

    The deficit for the year to June 30 2023 was $9.4B

    As late as May***, the government forecast a June 30 2024 deficit of $11.1B.

    Finance Minister Nicola Willis said the government books were "not in great shape" and made "sobering" reading.

    "We need to tidy them up and impose restraint."

    She claims***

    but the coalition government's mini-budget in December 2023 had limited the deficit increase by $1b.

    The government sent in Levy for similar inaccurate forecasts in Health (but al least there we know more nurses, doing more health stuff and fixing past underpayments to staff were involved – such amounts are national aggregates of the old HB system).

    Hipkins floats on the Breeze with the easy to re-state hits

    "The days where she could get away with blaming everybody else for her problems are well and truly over."

    He said the state of the books proved the coalition's tax cuts were unaffordable.

    "New Zealanders will continue to pay the price for those tax cuts well into the future; a price that's disproportionate to any benefit that they might have got from it.

    "And it means New Zealanders should be bracing for more public sector cuts, more public service cuts, a health system that is descending further and further into crisis and other public services that will also be facing cuts."

    https://www.rnz.co.nz/news/political/530375/not-in-great-shape-new-figures-reveal-budget-deficit-growing

    • georgecom 2.1
      11 October 2024 at 11:46 am

      tax cuts cost about $13 billion, govt borrowing about $13 billion

      seems a bit too difficult for Nicola to understand

      "rock solid on her tax costings" sept last year

      guess she meant she was "rock solid" that she would be borrowing the entire amount for tax cuts

  3. joe90 3
    10 October 2024 at 7:44 pm

    Best read of the day.

    .

    Last November, during a symposium at Mount Vernon on democracy, John Kelly, the retired Marine Corps general who served as Donald Trump’s second chief of staff, spoke about George Washington’s historic accomplishments—his leadership and victory in the Revolutionary War, his vision of what an American president should be. And then Kelly offered a simple, three-word summary of Washington’s most important contribution to the nation he liberated.

    “He went home,” Kelly said.

    […]

    Trump is the man the Founders feared might arise from a mire of populism and ignorance, a selfish demagogue who would stop at nothing to gain and keep power. Washington foresaw the threat to American democracy from someone like Trump: In his farewell address, he worried that “sooner or later the chief of some prevailing faction” would manipulate the public’s emotions and their partisan loyalties “to the purposes of his own elevation, on the ruins of public liberty.”

    https://www.theatlantic.com/magazine/archive/2024/11/george-washington-nightmare-donald-trump/679946/?gift=otEsSHbRYKNfFYMngVFweJHYwL965EM4vm-7lYu6zSE

  4. Muttonbird 4
    10 October 2024 at 8:53 pm

    The Minister of Defence indulges in anonymous blog post retaliation. She conveniently targets an Australian commenter but the very worst misogyny comes from the blog site run by her friend, David Farrar.

    Better start looking closer to home at your own supporters. It would be a road to Damascus moment if she wasn't such blind idiot. If and when she stops fake sobbing she might consider this…

    https://www.stuff.co.nz/nz-news/350447560/watch-judith-collins-lets-loose-australian-armchair-admiral

  5. Drowsy M. Kram 5
    14 October 2024 at 8:11 pm

    smiley