I read the following article this morning with interest.
Why on earth should we (the general investing population of NZ) invest in shares and finance companies???
So now the Government in all it's wisdom, wants to remove building depreciation and up GST.
This is only going to drive out investment in this sector.
IMHO, members of the TWG believe that that money from property will be re-invested in the share market or into managed funds.
It won't happen.
We've seen the share market crash and the debacle of the finance market collapse of the last two years. People will either not take the risk and invest in these markets or they'll put their into "safe" bank deposits.
Why on earth should we (the general investing population of NZ) invest in shares and finance companies???
The investors in property-related finance companies were like lambs to the slaughter.
A number of recent developments, including the massive write-down of Allied Farmers' Hanover loan book, illustrate once again that many of our finance companies ended up like little more than giant Ponzi schemes.
Investors were presented with positive financial accounts, consistent with our accounting standards, which encouraged them to invest in finance companies that were only able to repay investors if they attracted new borrowings when borrowers defaulted.
A number of recent developments, including the massive write-down of Allied Farmers' Hanover loan book, illustrate once again that many of our finance companies ended up like little more than giant Ponzi schemes.
Investors were presented with positive financial accounts, consistent with our accounting standards, which encouraged them to invest in finance companies that were only able to repay investors if they attracted new borrowings when borrowers defaulted.
So now the Government in all it's wisdom, wants to remove building depreciation and up GST.
This is only going to drive out investment in this sector.
IMHO, members of the TWG believe that that money from property will be re-invested in the share market or into managed funds.
It won't happen.
We've seen the share market crash and the debacle of the finance market collapse of the last two years. People will either not take the risk and invest in these markets or they'll put their into "safe" bank deposits.
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