January murders

February 5th, 2009 at 8:30 am by David Farrar

Steve Pierson at The Standard is happy and celebrating because he was worried that either myself or Whale Oil would post how since the change of Government there were no murders in January, and contrast this with the last two Januarys.

I have to say I have better things to do than monitor the homicide rate on a daily basis, let alone claim it somehow magically changes with an election (I think overall offending rates can change with a change in policies, in society, in the economy etc, but not merely an election).

Incidentally the homicide rate only really got politicised after Annette King’s brain fart when she blamed it on the sun and the moon. That was worth mocking.

But what really amuses me is how worried Steve was by the thought that such a link would be made, because January homicides were so low. Was he listening to the TV news every night thinking “Oh no, zero murders so far in 2009. This is awful. DPF and Whale may do a post about the lack of murders since the election.”

Well just as Steve congratulated me for not doing a post on the lack of murders and trying to claim it was linked to the election, I’d like to congratulate Steve for resisting the urge to personally intervene to increase the homicide rate, just to prevent us from being able to post on how low it has been  🙂

The chilling effect of the EFA

July 24th, 2008 at 1:32 pm by David Farrar

Steve Pierson at The Standard blogs on the ads run by the Northern Employers and Manufacturers Association against a proposed law which stops employers from operating a total remuneration package that includes the cost of KiwiSaver.

What’s more, this whole embarrassing exercise may be in breach of the Electoral Finance Act. I’ve just had a tip-off from a reader who has laid a complaint with the Electoral Commission this afternoon.

It turns out the EMA has failed to register as a third party, which means it has an election spending limit of $12,000. Today’s ad was a half page full colour in the Herald, putting it at around $15,000 according to a recent rate card and pushing the EMA well over their legal spending limit. The ad also entangles the New Zealand Herald, which is in breach for publishing it.

Now think about this. The Government is passing a law which wll affect every business in New Zealand. The Northern EMA represents thousands of those businesses.

The Electoral Finance Act means it may be unable to run even a couple of ads against this law change, without breaching the Electoral Finance Act or being forced to register as a third party.

The Electoral Finance Act is not just about elections. It is about silencing dissent in election year. If the Government announces law changes in election year, then people should be able to lobby and advertise against them. Why should the EMA Northern be reduced to spending less than $1 per business it represents?

It is debatable of course of the advertisements would be ruled election ads. But the EMA Northern is now running the risk of being prosecuted if they do turn out to be.

Renting vs Buying

July 23rd, 2008 at 4:52 pm by David Farrar

Steve Pierson at The Standard takes issue with the statements from the Property Investors’ Federation that it is better to rent than buy. He notes:

First, it’s comparing the average rent to the cost of buying a median house. Rental properties tend to be lower quality, cheaper – so are likely on average to be worth well below the national median. Comparing apples with apples would look at the rent on properties of the same value.

This is a fair point. However would be useful to have some data on the average GV of rental properties compared to properties for sale to see how significant this is.

Secondly and most importantly, if you’re buying the house at the end of 25 years, you own a house. If you rent, at the end of 25 years you have nothing. That’s a pretty serious difference. If you buy rather than rent you might pay some more (less than the difference in the graphic though) but you end up with an asset in the end.

Now this is absolutely key. It is why I purchased back in 2001 – even though mortgage payments were way more than my old rental payments.

However does this asset compensate for the extra costs? Let us look at the graphic referred to:

Now I have not got the time to calculate inflation and interest adjustments so am going to do a simple linear calculation.  Over 25 years you will pay a total of $396,500 if you rent and $968,500 if you buy. So that extra $572,050 you pay renting is well in excess of the $345,000 value of the house.

Now again interest, inflation and changing house values will affect this equation. But the point is that the gap between buying and renting is now large enough to make buying significantly less attractive.

I am so glad I purchased in 2001. If I had waited a few more years, I would really struggle with being able to afford to buy.