November 2013
As property prices continue their insane spiral upwards, Australian shareholders rub their hands in glee at the tsunami of money their companies are sucking out of the NZ economy.
The four banks have sucked cool $3.5 billion out of our economy in the past 12 months, while Countdown, Bunnings, FCO, Repco and too many other Aussie companies to list dip their scoops daily into NZ's bucket of cash. One of the most telling features is how many of that list used to be New Zealand-owned and sharemarket-listed companies - Goodman Fielder (Quality Bakers) Lion Nathan, DB, ASB...
I've said before, and I'll say it again: this is not a good thing. Remember, that $3.5bn by the banks alone represents a massive 3% of the country's entire GDP. $3 of every $100 we spend is just plonked inside an envelope and sent to some Australian shareholder.
If we allow Australia to dominate our economy, the economies of scale of large companies will mean that Kiwi companies will struggle to stay competitive, and will ultimately wither and die, leaving a bigger share for Australian companies.
Copyright © Alan Charman