I retired from personal blogging in July 2008.
But you can find me over at http://blog.xero.com.
Posted by Rod in Politics at 12:40 pm on Saturday, 10 May 2008
Quite liked the accounting analysis of the rail purchase from Craig Foss.
Dr Electoral Expense $235m
Dr NZ Rail Network $430m
Cr NZ Taxpayer $665m
blog
Excuse me for pointing out the obvious but something is ‘worth’ what someone is prepared to pay for it. If the NZ government paid $665m for the rail network then that is its worth. You can argue that they paid too much for it but as they are unlikely to turn around and sell it in the short term we will not know what others value the rail network at.
For those jumping up and down about the government ‘wasting’ tax payers money, the government bailed Air New Zealand out when the shares were 27c, they are now over $1.20, not a bad investment whatever way you look at it.
Hi Leuan,
Actually no. If the book value is x then there needs to be some revaluation of value. I think the commentators are asking what is this extra value? It hasn’t been explained - especially as some of teh assets will earn no income for a period.
I agree on the Air New Zealand. Perhaps some things do need to be nationalized. Perhaps Broadband is also one of those.
My concern is the inconsistency and randomness that is going on around this area. Hard to reconcile, AIA, Vector, Broadband and Rail.
Thanks for commenting.
And let’s not forget the Government’s highly unethical handout to Toll’s trucking operations with rent-free premises for next 6 years! Actually I believe the Road Transport Forum should be challenging this through the courts as it must surely fail the Government’s own anti-competitive legislation!