Monday, November 9, 2009

Kick Starting The Economy

NACTionalMP no longer have to worry so much about managing the country out of recession. Fonterra just gave the whole county a huge and unexpected boost with a massive increase in the forecast dairy pay out for the current season. The payout has rocketed from a dismal $4.55 to a previously unthinkable $6.05 in just three months.



Adolf has done some back of a cigarette packet calculations and he reckons the increase from $4.55 in August to $6.05 in November will add something like $1.6 billion to GDP during the December and March quarters.

This assumes that three quarters of Fonterra's actual production goes into the vat during the summer six month period. So, the figures very roughly would be $1.50 x say 1.4 billion kg x .75 ./. 2 = $787 million per quarter which is respectively 2.4% of the last available quarter's GDP, namely June 09. I forgot to say that I have a call into Treasury seeking some official comment on this matter.

Also happens to be 2.2% and 2.4% of the same quarters in 2008/09.

This should give NACTionalMP the confidence to make an earlier than planned start on some of the structural reforms needed but which were clearly signalled for deferment until after the recession had passed.

In his prayers, Adolf thanks the Lord every day that Labour and the Greens are not in power, otherwise the whole damned lot would already have been squandered on grand and wasteful schemes designed to entrench the crooks and gangsters in power.

5 comments:

sagenz said...

smells to me more like board and management trying to keep their jobs by boosting short term farm payout after the float debacle. From what I saw of Fonterra reserves they should be preserving every penny to rebuild capital rather than shovelling it out the door.

sagenz said...

I will investigate at some point when the next set of numbers comes out.

Pat said...

Now if only the Banks would pay their tax bill, we could inject another $2B into the economy.

Sinner said...

Now if only the Banks would pay their tax bill, we could inject another $2B into the economy.


the Bank's don't have a $2billion tax bill - just another Labour Party rort on them. Or do you really think its a good idea for the Aussie banks to all leave NZ, giving us just HellenBank?

Structural reforms are needed urgently, as is an anti-corruption commission. As for Fontera farmers - the most important reform should be zero tax whatsoever on export receipts - not one red cent of this should go to the government.

And if that means we need to zero the dole, DBP, super etc to stop borrowing $300 MILLION PER WEEK then we bloody well better zero our all the fucking welfare!

Sean said...

the whole damned lot would already have been squandered on grand and wasteful schemes ..

.. like waste of time, albeit feel-good cycleways?