Investment News, Opinion and Media

Benefit tightening won't reduce unemployment

Article posted on 24 September 2012 in Policy

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Beneficiaries need help and support to improve their prospects, not eligibility tests and punishments, writes Gareth Morgan in response to the Government's latest Social Security Amendment Bill.

Beneficiaries need help and support to improve their prospects, not eligibility tests and punishments, writes Gareth Morga...
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Euro summit eases market anxiety

Article posted on 24 July 2012 in Policy

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While the Euro Soccer Tournament was in its final stages late last month, the markets were following a European nail biter of a very different kind. Would the two-day EU leaders' summit in Brussels finally result in a credible plan to resolve the region's financial woes? John Carran has a look.

While the Euro Soccer Tournament was in its final stages late last month, the markets were following a European nail biter...
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Uncertainty in policy trumps business risks

Article posted on 3 July 2012 in Policy

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Uncertainty is a fact of doing business for companies, including the fickle tastes of customers, unpredictable exchange rates and interest rates, vagaries of foreign markets, and shocks from natural disasters. John Carran looks at how effectively managing these risks is often the critical difference between a business succeeding or failing financially.

Uncertainty is a fact of doing business for companies, including the fickle tastes of customers, unpredictable exchange ra...
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Will no GST on Food Help Poor Kids?

Article posted on 25 November 2011 in Policy

The Labour party have proposed to cut GST on fresh fruit and vegetables. Geoff Simmons explains why that approach may not not have the intended effects in tackling child poverty.

The Labour party have proposed to cut GST on fresh fruit and vegetables. Geoff Simmons explains why that approach may not ...
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Trimming the Cost of International Transfers

Article posted on 5 August 2011 in Policy

Andrew Whiteford, Senior Economist for Infometrics - Guest Columnist

Each year I make a small transfer to a tax consultant in my home country who is sorting out my tax affairs. To make the transfer I need to go into a branch of my bank, stand in a queue, fill out a form and pay $25 for the privilege of using their services. The process seems antiquated and overpriced in a world of online banking and electronic transactions. There is clearly a market opportunity to be exploited. Some Kiwi entrepreneurs are rising to the challenge and slashing the cost of making international transfers.

For me the laborious international money transfer process is a minor inconvenience and I can well afford the fee. But for many low-income pe...

Andrew Whiteford, Senior Economist for Infometrics - Guest Columnist Each year I make a small transfer to a tax consultant in...
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Campaign Slogans Slay Debate, Doo Daa Doo Daa

Article posted on in Policy

Gareth Morgan, director of Gareth Morgan Investments

When Peter Shirtcliffe launched his anti-MMP crusade he said it was to “bring a balance to the debate”. His subsequent campaign has ensured that didn’t happen. Shamefully the campaign for better government quickly degenerated into a series of sleazy slogans focussed solely upon stirring fear over political reform.

If FPP wins on Saturday one thing is certain - we still won’t know whether voters support or reject proportional representation. Rather we may hypothesise that voters - didn’t want 120 MPs; feared non-electorate representation; accept parliamentary reform will be a substitute for electoral reform; equated greatest advertising with gr...

Gareth Morgan, director of Gareth Morgan InvestmentsWhen Peter Shirtcliffe launched his anti-MMP crusade he said it was to &l...
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Transformation by Policy a Pipe Dream

Article posted on 17 May 2011 in Policy

Chris Worthington, Senior Economist for Gareth Morgan Investments

Budget season, especially in an election year, is the time for political parties to lay out their vision for transforming New Zealand. That proposed transformation may be a knowledge economy; a financial hub; laissez-faire capitalism or a socialist utopia.

But what these grand visions have in common is that they are all, more or less, wrong - or more specifically, that they have little chance of delivering what they promise. New Zealand needs less big picture and more gritty detail.

Let's take stock on what politicians want New Zealand to look like. All parties seem to agree with the uncontroversial idea of being more like Australia, which is...

Chris Worthington, Senior Economist for Gareth Morgan Investments Budget season, especially in an election year, is the time ...
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Wage Increases vs Inflation

Article posted on 13 April 2011 in Policy

Gareth Morgan, Director of Gareth Morgan Investments - Courtesy of The Answer Room

Video Transcription

Interviewer: Why does income from investment and wages seem to lag behind inflation, but clearly the bulk of the population isn't on the street and starving?

Gareth: So really the question is- why do prices go up faster than wages? And the answer is - they don’t. It just seems at times that they do.

Over time your wages will increase. No one is going to argue that today you're worse off than the equivalent of you would have been 50 years ago. So, real incomes have gone up, but they ratchet. Wages will go up and then prices will go up, then w...

Gareth Morgan, Director of Gareth Morgan Investments - Courtesy of The Answer Room Video Transcription Interviewer: Why does ...
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Vested Interest Disguised as Public Interest

Article posted on 30 March 2011 in Policy

Adolf Stroombergen, Director of Infometrics – guest columnist

One of the features of a capitalist economy is that vested interest frequently masquerade as public interest. Examples are not hard to find. Australian apple growers do not want to see imports of New Zealand grown apples. A true concern for bio-security or simply patch protection? In New Zealand fund managers promote the great national benefits of compulsory saving – how surprising. Fonterra and Federated Farmers vehemently maintain that they should not have to pay a price on greenhouse gas emissions – the taxpayer should pay for their emissions. Biofuel producers are doing us all a great favour by lowering the CO2 content of our liquid fuels. Never mind that the current subsidy is equivalent to abou...

Adolf Stroombergen, Director of Infometrics – guest columnistOne of the features of a capitalist economy is that vested...
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Little Substance to the Asset Sales Reasoning

Article posted on 8 February 2011 in Policy

Geoff Simmon, Gareth Morgan Investments economist.

Like any frugal Kiwi weathering the recession, John Key has been squirrelling away his political capital, and now we have finally seen what he wants to spend it on. Flogging the family silver is firmly back on the agenda. The reasoning behind this flashback to the garage sales we had under Rogernomics and Ruthenasia is that it will increase national savings, help us avoid an Irish-style collapse and refocus our economy on exports. Just how plausible are these claims?

Any householder knows that selling your assets doesn't necessarily lift your savings. Sure, debts cost us money, but assets usually earn us money too, so selling an asset to pay off debt means our income and our...

Geoff Simmon, Gareth Morgan Investments economist.Like any frugal Kiwi weathering the recession, John Key has been squirrelli...
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From Sheep to Students

Article posted on in Policy

BY GARETH MORGAN

Does the torrent of foreign students to New Zealand benefit or damage the education asset generations of taxpayers have built up?Over recent years downtown main street New Zealand hums to the lunchtime chatter of foreign students as they spill out of the various education houses to lunch and chatter their hour off. And to satisfy the needs of this deluge of new customers a thousand lunch bars, coffee shops, cellphone shops and internet cafes have blossomed.

Without doubt the export business of education has just exploded. Overall it has to be a major boon to a range of businesses from education and accommodation providers to the ancillary businesses cited above. For the many inner city businesses that have missed out on the dividend from the agricultu...

BY GARETH MORGANDoes the torrent of foreign students to New Zealand benefit or damage the education asset generations of taxp...
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People Matter

Article posted on 6 October 2005 in Policy

Wasn’t long ago the New Zealand economy was trucking along on the back of high population growth, arising from big net immigration numbers. What’s happened? Growth is holding – just – but we’re running on empty.

Population growth has slumped back to a sub-1% annual rate well down from the 1.7% pa growth earlier this decade and below our long term average rate of 1.2% pa. Indeed the net migration Labour has overseen exceeded in significance that National fostered in the mid-1990’s. It was the largest contribution to population growth from migration we have experienced since the 1950’s.

And the economy responded merrily. Together with falling interest rates it has been population growth over the last few years that have underpin...

Wasn’t long ago the New Zealand economy was trucking along on the back of high population growth, arising from big net ...
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