Weldon resigns

May 4th, 2016 at 11:47 am by David Farrar

Newshub reports:

Today the MediaWorks Board has announced that Mark Weldon has resigned from his position as CEO.

The Board has accepted Mark’s resignation and respects his decision.  

Mark Weldon commented: “I wish to share the news that, last night, I notified the MediaWorks Board of my resignation from my role as CEO.


This is not a huge surprise. There was such obvious internal discontent that it seemed obvious either Weldon would go, or more staff would leave.

Mediaworks staff may find a different CEO won’t result in better outcomes for them. Television and media companies face a very challenging environment and declining revenue.

Drinnan on Ardern and Weldon

March 18th, 2016 at 3:08 pm by David Farrar

John Drinnan writes:

MediaWorks’ withdrawal from current affairs and its focus on reality shows has led to the perception that it is being dumbed down.

Chief executive Mark Weldon’s “no dissent” management style and a flood of staff departures have led to criticism in the media, and on the left of the political spectrum.

The commonly advanced view from many of those critics is that the current management is taking TV3 to hell in a handcart.

I have had my own differences with Weldon, but I believe that to a degree, coverage of MediaWorks has been personalised against him.

With an open letter this week from Labour MP Jacinda Ardern, TV3’s shift appears to have become politicised.

Ardern accused Weldon of destroying TV3.

I found the political attack on a private business appalling.

I hate to think of the reaction from the Left if a National politician had attacked another media business for its business plan.

Admittedly, TV3 plays a big part in the culture.

I asked Ardern if it was appropriate for a senior politician to attack the business plan of a private business.

She said she would not have written the letter if she was a Cabinet Minister.

“I am an Opposition MP, and on this occasion chose to use my voice to articulate concerns that I know are shared by many.”

The column attacking Weldon was personal and nasty. Decisions at Mediaworks are not made by one individual. I don’t think Mediaworks is doing well, but you have a board, major shareholders who appoint the board, a CEO and a senior leadership team.

Ardern made it all about Weldon and personalised it. If she says the letter would have been inappropriate as a Minister, then how does it look coming from an aspiring Minister. Think if she became Minister of Broadcasting. It would be an effective demand to Mediaworks that they sack Weldon, or face a Government that will look to punish them.

Easton on partial sales

January 29th, 2011 at 8:58 am by David Farrar

Stuff reports:

Brian Easton, an economist known for left-of-centre views, is wary the scheme will block future policy options for the electricity sector but supports the benefits it can bring to the local investment scene.

“By increasing the opportunities for New Zealanders by offering shares in minority stakes in SOEs, you would partly moderate the stupidity that happened over the finance company sector,” he says. “That enrichment of the financial market, which incidentally, curiously, Rob Cameron and I agree on, is a very strong case.”

And Mark Weldon notes:

“What I really like about the policy is it’s not left wing, it’s not right wing … It’s based on the Air New Zealand model which has the great attribute of actually being shown to work.”

Air New Zealand, 75 per cent government-owned since its taxpayer rescue 10 years ago, has performed well and delivered better dividends than the power SOEs in recent years.

“If you talk to [CEO] Rob Fyfe or [chairman [John Palmer] they will tell you that the majority long-term ownership of the government has been a real positive,” says Mr Weldon, “because it means they can focus on long-term planning and not worry about being taken over, as they would if they were a fully free-float company.”

As I have pointed out on many occassions, allowing the private sector to invest or buy some shares in state owned companies is absolutely common practice aroundthe world amongst governments of the left and right.

Is it bye bye to LAQCs?

January 2nd, 2010 at 4:09 pm by David Farrar

James Weir writes in the Dom Post:

The Government has a chance to lift the economy in 2010 with big changes on “crazy” tax breaks for investment property, according to NZX chief executive Mark Weldon.

“Tax is the No1 change,” Weldon said.

The Government has an unprecedented chance to take action and send signals this year.

“That would make meaningful long-term differences to our wealth, growth and standard of living.”

I agree, that some tax reform is much needed.

Investment property should be the target, such as dumping loss attributing qualifying companies (LAQCs) which allowed some wealthy people – including some on the Government’s own Tax Working Group – to pay no tax at all, Weldon said. Weldon is a member of the Tax Working Group.

“There is no difference between a rental property, a share, bond or bank account, so treat them all the same [for tax],” he said. If they were all treated equally for tax purposes, then money would go where it should, rather than chasing tax breaks.

Weldon makes a good point. Far too much property investment is because of the tax breaks. And this means capital is tied up in residential property insteaad of other areas which could grow the economy more.

But capital gains taxes – taxing a house when it was sold at a profit – showed mixed results around the world.

“You are a lot better off with a low-level land tax. It is administratively efficient.”

Such taxes could be imposed at, say, 0.2 per cent of the land value, raising a few hundred dollars a year, which would not upset house values.

Raising such a property tax would allow for personal income tax rates to be brought down and might allow company tax rates to be reduced if Australia dropped their company tax rates further.

I do not support a capital gains tax but do support a land tax, if income tax is reduced to compensate. A land tax would be administratively very simple –  Councils already levy rates on properties, so it would be merely added to that.

If listed companies were the same size as the value of all rental properties in New Zealand, shareholders in listed companies would theoretically pay about $11b in tax.

In stark contrast, investors in rental properties actually got back $150 million from the government from tax breaks.

This is the nub of the problem. Over $100 billion invested in residential property, and the “investment” generates a loss or effective subsidy from taxpayers.

“You look at that imbalance – you are taxing the productive sector and not the unproductive sector,” he said. Weldon questioned the concept of allowing depreciation on rental properties which was supposed to be for things that wore out. There was no depreciation on shares or bonds, which are supposed to go up in value.

That is a change worth considering also – no depreciation on residential property. One can claim 3% a year depreciation off tax, which is a lot of money. Now eventually when you sell, the tax claimed has to be repaid – but you have had the benefit of that money interest-free for possibly a couple of decades.

Has any residential property ever actually decreased in value, such that depreciation makes economic sense? Not over any extended period of time. In fact they constantly appreciate.

Public ownership does not mean public accountability

September 5th, 2008 at 10:00 am by David Farrar

From the Dom Post:

A parliamentary report has given a damning assessment of the monitoring and valuation of state-owned enterprises, describing the lack of transparency as “indefensible”.

This has prompted NZX chief executive Mark Weldon to offer free listings for five per cent of SOE shares so the market can enforce a higher degree of transparency and accountability.

The transparency and discipline listings would bring are an excellent reasons to have some private ownership in the SOEs. The public would actually get more and better information on the billions locked up in the SOEs.

Every year Treasury and the CCMAU publish a statement of corporate intent providing information such as shareholder rates of returns. There were no statistics included in the statements in 2007 and 2008.

The committee said it had been told by officials “informally” that satisfactory portfolio performance data was not published because of a lack of resources.

The report said this implied that portfolio performance and public accountability were not considered relevant or important, respectively.

Again ownership does not translate to accountability.

The committee said it was concerned because Government documents, particularly the State-owned Enterprises Act, state the main aim of an SOE is to be as efficient and profitable as a comparable private company.

The committee said if Treasury or the CCMAU lacked the resources to do the analysis, they could put the work up for tender.

One funds research analyst said the private sector “couldn’t do a worse job even if we were drunk in charge”.

A possibility that can’t be ruled out 🙂

The most recent financial statements value the Crown’s interest in the 18 SOEs at $23.5 billion at June 30, 2007, the equivalent of 40 per cent of the $59 billion market capitalisation of the New Zealand sharemarket at June 2008.

Issues like this are not sexy but can be vitally important.