Wednesday, March 24, 2010

Tell Us More...

.....says The Herald as it bemoans the lack of economic forecasts in the Gummin't discussion paper on mining in the conservation estate.

(There was no comment on the possibility that perhaps there might have been more if the papers had not been leaked to the Green Wankers before preparations for an orderly release were complete.)

Meanwhile, back at the mine, phailed phlailer Phil Goff and his incompetent wailing mates were busy trying to prove there's no bonanza for the Gummint in these potential mines. (That gap in his teeth looks like an open cast mine on Coromandel.)

You know, the sheers gall of these idiots is amazing.

Every time someone says 'let's catch up to Australia' they cry 'it can't be done so don't bother trying. Australia has all those minerals.' Then, when someone says 'hey look, so do we, lets dig them up and sell them so we can buy some better roads and hospitals' they want you to believe that the wealth is a mirage.

Fortunately, voters are not nearly as dumb as the liars from Labour.

Anyway, Adolf agrees with the Herald, so here's an uneducated go at listing the ways in which mining will grow the public purse. I'll be interested to see the official projections when they arrive.

First up, all the wailers' arguments seem predicated on the notion that mineral royalties will be 1% of sale value.

  1. I would put each mining license out for tender, carrying an up front 'entry fee' payable along with competitively bid royalties. There might be some sites which would bear a 5% royalty.
  2. Gummint will gain immediate GST revenue from all exploration expenditure excluding wages and salaries.
  3. Gummint will gain PAYE revenue on all those wages and salaries and GST when they are spent.
  4. Gummint will gain a significant boost to GDP from exploration activity, extraction activity and sale of product. (More on this later)
  5. NZ will gain thousands of jobs in support industries with consequent inflow of skilled migrants and boosts to GST and PAYE - this is precisely Australia's experience.
The detailed calculations are beyond Adolf but as a broad rule of thumb, one can reckon that if Labour says the benefit from just one mine is worth only $43 million, one can confidently expect to receive $430 million.

Oh yeah, what about that increase to GDP?

Well folks, if you can bump your GDP up by five percentage points, suddenly all the bad ratios become good ratios. Suddenly the nation gets credit upgrades instead of downgrades. Suddenly there's less interest to pay on overseas borrowing. Suddenly there's less need for overseas borrowing. Suddenly there's more to spend on infrastructure, better education, better health care and so on and so on.

But Labour doesn't want that. They want to keep you poor so that you can rely on the Gummint for a hand out and they can rely on you for a vote.


Lou Taylor said...

The position that Goff is taking on pretty much everything is ensuring that Labour will forever be a 30% party. I heard Barry Soper last night saying that Phil In was taking a plane load of journalists over to the Barrier. Larry suggested that he take his bus.

Sally said...

BUT...... can we trust National to use the benefits in a responsible manner?

We should be demanding that they instigate value-for-money disciplines on new and existing governmnet spending , before any deals are sealed

WWallace said...

Suddenly there's more to spend on infrastructure, better education, better health care and so on and so on.

Why should they necessarily be more to spend? Why not, less tax required from the workers?

As Sally says, prove that you won't waste it (like Cullen did).

Psycho Milt said...

The issue isn't about whether mining the conservation estate would make money or not, it's about whether calling something a "conservation estate" and then mining it is a good idea, and most particularly it's about what kind of moronic scum would develop a "schedule 4" of conservation land deemed most deserving of protection, and then decide to remove that protection if it turns out someone can make a buck out of it. As it turns out, the answer is (unsurprisingly): "the kind of moronic scum running a National/ACT govt."

WWallace said...

Perhaps it is more about the definition of Schedule 4, and the original choice to designate certain land in that category?

ISeeRed said...

Another pointless sideline issue. "Surgical" mining isn't going to transform the economy or get us up in the top 10 again. We need at minimum:

Hong Kong's tax rates and business-friendly laws
Singapore's welfare and pension system
Cut government/bureaucracy by 50%

Cash in the Cullen Fund to cover restructuring costs and tax shortfalls until economy ramps up and tax revenues rise.

Adolf Fiinkensein said...

Milt, don't rewrite history.

"As it turns out, the answer is (unsurprisingly): "the kind of moronic scum running a Clark/Cullen/Winston First govt."