Bill Dalton

I was tempted to talk about Winston Peters again this morning but I decided that if people hadn’t seen through this dreadful individual by now, they never would.

Instead I thought I would tell you about my council duties for the last week.  Dave Pipe and I are the Napier City Council members of the judging team for the Hawkes Bay Regional Environmental Awards.  The team is made up of two councillors from the Regional Council, two from Hastings District and the two of us from Napier.

And what has amazed me is the number of people who are dedicated to improving our environment.  And some of the things they are doing are really very simple yet are having a significant effect on our environment.

There are some things that are notoriously difficult to deal with.  Used tyres is an obvious one – there is no easy way to dispose of tyres.  We can toss them into the landfill but that creates huge problems.  One they fill the landfill up very quickly and two they take years to break down.

One option is to export them but what happens to them then.  I understand that China and other Asian countries import tyres from all over the world and burn them as fuel.

So whilst we are keeping our immediate environment clean, the global environment is being polluted at an alarming rate.  Having old tyres used in such a way is not acceptable and the fact that it is happening out of our sight doesn’t make it any better.

Whilst the judging process takes up an enormous amount of time, it is a really worthwhile process.  It is great to see traditionally dirty industries working so hard to clean up their discharges.  It is satisfying to see what in the past, we would have called waste, being recycled into valuable products.  And it is great to see simple recycling stations appearing in workplaces throughout the district.

The other interesting thing I’ve discovered is that often these environmentally sound practices are not at a cost to the business involved, but in fact result in more efficient work spaces, greater productivity and therefore improved profits.

We’ve got a long way to go but I’m heartened by the progress we have made in recent years towards a cleaner and healthier environment.

I am often asked the question – what has caused the meltdown in the Finance Company Sector in New Zealand – and the answer is simple. It’s greed.

It all began in the USA with the sub-prime crisis. Greedy lenders lending far too much to poor borrowers. Greedy borrowers borrowing far more than they could hope to repay. So the dramas began in the banking and mortgage sector in the States and the effects spread throughout the world.

In New Zealand we had greedy owners and directors of finance companies who raised money from the public and then lent it to developers – many of whom were related parties – in an appallingly cavalier manner.

And of course we had greedy financial planners who poured millions of dollars of client’s money into these disreputable, bound to fail finance companies. Bridgecorp didn’t have any trouble raising funds from some advisers when they were offering two and three times normal brokerage. I would have thought such ridiculous levels of brokerage would have rung alarm bells.

So greed created an environment which resulted in these poorly run finance companies failing.

The problem we now face is that the investing public has decided that all finance companies are poison and that of course is not true.

Companies like South Canterbury Finance have been around since 1926 and they have been an essential part of commerce – financing plant and equipment, property, aircraft, vehicles and participating in New Zealand’s growth.

The sad part of the meltdown in the Finance Company Sector apart of course from the thousands of individual loss stories, is that now, even very good companies are suffering.

Companies like Strategic Finance, that has one of the best teams of personnel in the country, have suffered due to the lack of confidence in the sector. Because of the failure of other companies re-investment rates that were around 70% have dropped to 10% and that is unsustainable.

But Strategic highlights the difference between them and the shonky lot like Bridgecorp and Blue Chip. No hiding the Porsche or other assets from the investors for Strategic. The management team have put up $22m of their own funds and is negotiating a restructure plan that will see all investors protected for both income and capital.

Frankly I’m not sorry to see the Petricevics of this world biting the dust. I’m just sad that he and his cohorts have hurt so many people and damaged a good sound industry.

Related Links

Somerset Smith Partner’s disclosure-statement. (PDF 1.1mb)

There is no doubt that the 2008 election campaign is going to be a grubby one – the dirty tricks have started already.

Labour is desperate to stay in power and they are not that stupid that they can’t understand polls.

National is equally desperate to gain what they see as their rightful place, the treasury benches. After nine years on the sidelines, they believe their time has come.

In the past, I have often commented that Labour and National struggle to find differences between them. They are both in the centre of the political spectrum, one leaning to the left and one to the right. Since the Greens split from Labour and ACT split from National, we have been left with a solid political chunk in the middle split between National and Labour.

However this election there appears to be a clear philosophical difference developing. Labour has, under Michael Cullen, run an amazingly conservative ship. They have tried to do all their infrastructure spending out of current income which frankly has resulted in the quality of our infrastructure declining and our taxes being held unnecessarily high.

National, on the other hand seems to be embracing the inter-generational funding philosophy, very typical of the way many local bodies are funded.

Basically inter-generational funding works along the same lines as you and I did when we bought our houses.

We didn’t try to pay for our houses out of current income. We acknowledged that our house was going to provide shelter for the next 50 years so we spread the cost over a number of years – even though that action incurred an interest cost.

National is suggesting a similar plan. The infrastructure that New Zealand is crying out for to allow us to get sustainable growth into the economy, is going to serve us for many years to come. Therefore it is unfair to current taxpayers to ask them to pick up the total cost, just as it is fair to ask future generations to contribute to this infrastructure.

No doubt we will hear emotional rhetoric about irresponsible borrowing – remember Muldoon talking about “Bill borrow and hope Rowling”. But sensible borrowing by governments is no different than a businessman borrowing to expand his business or you and I borrowing to buy a home.