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Chinese Buyer Keen To Buy More Kiwi Forest
Published: 6:12PM Wednesday April 24, 2013 Source: BusinessDesk A stack of cut logs. – Source: Photos.com The North Island forest estates are the first step in the Chinese company’s strategy to invest in the local industry and look at other opportunities, it said in a statement. The general manager of China National Forests, Lin Zhan, expects the forestry investment will generate new jobs. “To ensure that the forests are managed to best practice, New Zealand based in-forest suppliers will continue to provide the in-forest services.” “Owning the forestry estate will not likely see any reduction in the purchase of export logs from other New Zealand suppliers,” Wong said. The superannuation fund, known as the Cullen Fund for its architect former Finance Minister Michael Cullen, sought a buyer for the blocks last year, when it valued the estates at some $91.1 million as at June 30. “We see more attractive investment opportunities for our purposes elsewhere,” Whineray said. “We are always working to ensure that we have the best possible mix of investments in the fund.” The Cullen Fund recently upped its stake in the Kaingaroa Forest, which is still the fund’s single biggest asset worth $945.1 million as at March 31, and recently bought a $140 million stake in local IT company Datacom and 11 local dairy farms. Continue reading
Business Says End Carbon Tax, Bring In ETS
By Nick Perry From:AAP April 18, 2013 A GROWING chorus of business and industry groups is calling for Australia’s carbon tax to be scrapped now and replaced with an emissions trading scheme (ETS) and a floating price. Opposition to the fixed-price regime – currently $23 per tonne of CO2 emissions – has grown since a failed bid to improve Europe’s ETS saw market-based prices there plummet to below $4 per tonne. Market analysis released on Thursday forecasts Australia’s carbon price could plunge to $2.70 when Labor’s carbon pricing mechanism links with Europe’s ETS in July 2015. The fixed price is due to rise to $24.15 in July this year and $25.40 in 2014, before the price is set by the market in 2015. Industry is calling for an earlier transition to a floating price, arguing it would help drive down power costs for businesses and households. Wesfarmers chief Richard Goyder said companies didn’t want to pay significantly more for emissions than the rest of the world. “I think business would welcome a more market-based price, considering the cost pressures we’ve got at the moment,” he said on Thursday. The Australian Industry Group said by abolishing the fixed-price period and linking with Europe, Australia’s emissions targets would still be met but at a lower cost to business. “We should make the most of the opportunity to meet our own targets at least cost,” said AiGroup chief executive Innes Willox. In its latest forecast, energy and carbon advisory firm RepuTex predicted Australia’s carbon price would average just $2.70 when it’s floated until 2020. Treasury anticipated a carbon price of $29 in 2015/16, but since Europe’s price spiral Labor has confirmed the forecast would be revised in the May budget and an updated revenue outlook provided. RepuTex executive director Hugh Grossman said the price plunge would see companies meet their emissions targets at a much lower cost and spur a revival in coal-fired power generation. The total impact would be an immediate reduction in wholesale electricity prices. “They’ll basically drop to levels pretty close to what we would have seen before the introduction of the carbon pricing mechanism,” Mr Grossman told AAP. Meanwhile, opposition climate action spokesman Greg Hunt says the coalition agrees using markets was the best way to tackle global warming – but not with a carbon tax. Using a “classic market mechanism”, Mr Hunt said the coalition would directly fund activities that reduced CO2 emissions – known as abatement – like revegetation and improving soil carbon. Abatement would then be purchased at the lowest possible cost via a reverse auction, a process where prices are driven down by competing sellers. In a speech to the Australian National University on Thursday evening, Mr Hunt will argue this carbon buyback approach would reward innovation and initiative while meeting Australia’s climate targets. “Whereas the carbon tax tries to drive up the price of basic services in order to force down use … we will not provide a dollar unless there is an actual reduction of emissions,” he will say. “Our Direct Action Plan is a simple, low-touch market mechanism.” Continue reading
Warning EU Tax Will Hurt Savers And Investors
Monday 15 April 2013 The Financial Transaction Tax (FTT) will damage savers and investors across Europe, and will drive away the firms from whom it expects to raise billions of euros in taxation, it has been claimed. The Association of the Luxembourg Fund Industry (Alfi) was in Edinburgh highlighting its campaign against the controversial tax, which is set to be approved by only 11 EU member states but enforced in all 27. The FTT is one of three current EU financial sector initiatives being fiercely fought in the UK. The fund management industry faces a cap on bonuses to bring it into line with investment banking, while tighter solvency rules are said to pose a serious threat to pension funds. Anouk Agnes, a director of Alfi, said it strongly opposed the FTT. “We think it will be catastrophic for the investment fund industry, in Luxembourg but also in Europe generally. First of all we believe investment funds should not be in the scope of the FTT because they were not the origin of the financial crisis. “Second we believe it will not be the financial actors who pay the tax burden but the end investors, because obviously the costs will be added to the investments. “Finally we see the tax amounts that should be collected as an illusion, because we are afraid firms will find ways round the tax and even possibly relocate entirely outside Europe, which is in nobody’s interest. So it is difficult to understand who the FTT will ultimately benefit.” However Ms Agnes admitted that, politically, if 11 countries wanted to push FTT through they would. Alfi has said the tax “ultimately will have an extremely negative impact on all long-term savings of European Union nationals, including pension funds” and a “devastating effect on the long-term financing of the European economy”. Luxembourg is Europe’s biggest fund centre, with offerings that sold in 70 countries round the world. Firms using its “passported” UCITS funds include Aberdeen Asset Management, in 27 countries, and RBS in 23, and the funds support part of the back office operations in Edinburgh, of firms such as JP Morgan, Citigroup, State Street and RBS. Denise Voss of Franklin Templeton, vice-chairman of Alfi, said the FTT was supposedly intended to deter speculative activity, but would hit hardest at money-market funds, which could disappear because they were the funds trading the most frequently. “These costs will have to be picked up by somebody,” she said. “We believe the insecurity will make important actors leave and relocate.” The tax will apply to redemptions from funds, though not subscriptions, and on all buying and selling within funds. Ms Voss admitted this would have the least effect on equity funds with low turnover, and also that managers running broad funds for investors inside and outside Europe would probably not relocate. On the proposal to cap fund manager bonuses, Ms Agnes said: “The remuneration issue was related to banks and more specifically to investment banks and suddenly even UCITS are affected, which are already regulated and very transparent. The remuneration rules do not make much sense and are just an additional burden.” The current EU proposals would outlaw fund management bonuses that exceed fixed annual salaries, and extend the timeframe for some deferred payouts from three to five years. Daniel Godfrey, chief executive of the Investment Management Association, has said it will “have the opposite effect of what they are seeking to achieve”, raising costs for consumers and weakening the link between performance and rewards. Meanwhile, the National Association of Pension Funds warned new EU proposals to impose insurance company solvency rules on pension funds could increase UK scheme deficits to at least £450bn. Joanne Segars, NAPF chief executive, said: “This project has been conducted at breakneck speed due to the commission’s ludicrously tight timetable. This cannot be the basis for formulating a policy that could undermine the retirement plans of millions. “The European Commission needs to rethink its proposals… it would be better to focus on the 60 million EU citizens who have no workplace pension, instead of eroding the good pensions already in place.” Continue reading
