Saturday, 19 July 2014

Carbon losses

There are few who will suffer immediate losses from the removal of a price on carbon as much as the Tasmanian government.

Monday, 14 July 2014

Cash for Cadbury

It’s difficult to envisage a less deserving case for $16 million of government assistance than Cadbury. The amount is equivalent to one month's operating cash surplus which in the last year was all remitted to the parent company. The parent company only has to defer one month's cash grab and government assistance won't be needed.

Wednesday, 18 June 2014

Poverty of the progressives

The Federal Liberals' budget rationale is based on the widely held myth that government spending is financed by taxes and should a reckless government spend more than it raises in taxes then loan funds will be required from the private sector which will not only diminish the capacity of the private sector to create jobs and pay wages but will impoverish our children and grandchildren by burdening them with loan repayments that can only be met by higher taxes.

We’ve heard it a thousand times - the incessant Goebbels inspired  drum beat of the rationale of our current predicament.

But it’s not only the Liberals and those on the Right who believe it, but the so called progressives and those on the Left also believe it.

Maybe the latter are prepared to run government deficits for a bit longer and for government borrowings to be a bit higher, but essentially there’s not much difference between the two.

Just like the nuanced differences between Margaret Thatcher and Tony Blair, lost already in the sands of time.

Tuesday, 3 June 2014

Gunns' clearing sale

The dissipation of Gunns’ forest estate continues.

Korda Mentha, Gunns’ Receivers in control of Gunns’ secured assets, don’t say much. It’s not a requirement except when they need a favour.

PPB Advisory, Gunns’ Liquidator overlooking the whole show reveal a little  more because they’re charged with winding up Gunns’ MIS schemes and preventing Korda Mentha from grabbing the MIS trees for their clients. As a consequence they update growers with regular, and quite helpful explanations of the progress of the wind-up and how much is being received from asset sales and spent by lawyers accountants and consultants in the fee smorgasbord.

Friday, 30 May 2014

Understanding macro accounting

The broken promises and shameless lies of the recent Federal budget are easily justified if one accepts the  argument of the Liberal Member for Lyons.

Just like the millions of Australians it represents who all have to live within their means, this Government believes that our country has to be financially responsible for the sake of our children and grandchildren.”

Sounds plausible?

One problem however. It’s false.

Sophistry at best. Another lie at worst.

Sunday, 25 May 2014

Tax model is failing

THE Tasmanian Government’s budgetary problems are simple – it is essentially a service deliverer spending more than it is receiving.

Borrowings would be imprudent as there’s not enough to pay interest.

The past four years’ excess spending has been funded with amounts intended for other purposes, mainly funds in advance from the Federal Government such as the $290 million received to redevelop the Royal Hobart Hospital.

The GST, lauded as a growth tax until 2008, raised funds at a faster rate than overall economic growth and seduced state governments to expand their programs.

Saturday, 24 May 2014

Shree staggers

Winter is a wild and woolly time down the West Coast of Tasmania.

Even bleaker for those not getting paid as expected.

Shree Minerals announcement to ASX was a carefully worded attempt not to scare the horses too much.

Shree stated : “While the company believes recent iron ore price declines are not reflective of medium term fundamentals and expects demand to continue to grow in the Asian markets, it is taking steps to optimise costs in the prevailing market conditions.”

Essentially what they’re saying is they’ll be able to pay their way if prices pick up.

Other than announcing they’d struck gold with another source of funds that’s all they could have said.

Apart from shareholders, working capital has been provided by Frost Global who have agreed to advance working capital to be repaid at the rate of US$500,000 each time Frost Global receives a shipload of ore

The last thing Shree, or Frost Global would want right now is an insolvency administration taken over by the creditors.