Chasing down the BOM's

This post was prompted by a plaintive cry of vehicles which are
"manufactured almost entirely without human input, sold online with no human input, and ultimately driven without human input. They would seldom crash, and need virtually zero maintenance."  The implication is that Workers disappear and with them their Incomes and with that, their Taxes....

Lets chase the BOM down on each of these.

1. Manufacturing is the end product - metal-bashing and assembly of a plethora of components, every one of which has been: Designed, Prototyped, Materials Mined, Transported, Refined, Shipped, Cast, Moulded, Machined, Painted, Warehoused, Sold, Financed, Transported again, all before getting to the TSLA factories. Every single one of those activities has their own BOM, into which humans are an essential input. Who else Brands, creates a compelling website, decides on Finance, writes up the Contracts, Programs the CNC tools, Builds the manufactories, and passes the bills for payment. I've been involved in automating finance-related jobs out of existence for forty years, and quelle surprise, there is still wetware at the root of most of finance activities.
2. 'Online' is the visible result of literally person-centuries of clever coding, marketing ideas and entrepreneurial individuals (Jack Ma...). It's wetware all the way down for the Ideas. As to the 'automation' possible, well, Compilers, which take away the burden of writing in binary, have been around since the 1950's, yet, quelle surprise, IT in general is part of the STEM explosion in careers.
3. 'Driven with no human input' is an aspiration, not a fact. Caterpillar has had self-driving mine trucks for three decades, yet wetware is still employed to spot them for loading, and to dump them at the top of the haul road. And self-driving in winter ice, snow, fog and other very common North American road conditions is certainly gonna create work for panel-beaters: because ABS, vehicle dynamics adjustments and environment detection are useless in such conditions, as many tourists discover up our NZ ski access tracks....
4. Last I checked, TSLA vehicles have Tyres, Suspension, and other moving parts which wear. So zero maintenance is another myth. There may well be less mechanics. But then where are the buggy-whip makers and wagon wheelwrights of yesteryear? 80% of employment in developed countries 150 years ago was agricultural. Now 2% is. What happened? Yes, too many barista and aromatherapista.....

In short, we need not worry about Workers and their Income just yet. Heck, even Bicycles need Mines, Refineries, Ships, and Tyres to supply their very simple BOM's. Mines need Miners and before that Stone-gazers who can look at an outcrop and say ' yup, there's Cu, Fe, Sn or Pb in that there Rock'. I'll stop now but y'all get the drift....(mining pun right there)

Awkland housing - the Ongoing Stooory

Awkland Architects will have a perfect insider's view as all of this unfolds.

I think (despite my VRWC tendencies) that the whole Awkland Affordable Hoosing schemozzle probably cannot be even partially fixed any other way than by Gubmint intervention. But to take up a couple of points from elsewhere in the thread:

• The 'expert group' are 
• Shamubeel Eaqub - respected independent economist and commentator, and author of Generation Rent, 
• Philippa Howden-Chapman, Professor of Public Health at Otago University. She has led groundbreaking research on the health impacts of cold, damp housing, and 
• Alan Johnson, Senior Policy Analyst for the Salvation Army and author of The Salvation Army's State of the Nation report, which highlights effects of the housing crisis
• This group is anything but Expert. An economist, a Sallie SJW, and an academic are hardly a Brains Trust, particularly as the conundrums of fast, abundant, affordable housing will include the two most thorny issues of all: land costs and automated building methods. One would have expected some Builders, Engineers, Manufacturers and Overseas folks in the group. But hey, the old Labour/Greens mantra reasserts itself: 'We Know Best'.

• The other salient point is about the inherent risk involved in socialising all the moving parts of the solution. In Christchurch, f'rinstance, no construction company with any economic sense will put its hand up for the now-foobarred Metro Sports Facility, because the Gubmint has just tossed the head contractor (Leighs-Cockram) under the bus. I foresee something quite similar to this caution in the Hoosing Debacle: with such a swirling mess of Regulation, Land issues, Construction Methods and attendant risks, what CEO is gonna say to the troops - 'hey, this looks juicy, lets spend a coupla mill and get in on the action' ??

I think we all are gonna need a Contract with Popcorn suppliers, to sit comfortably on the sidelines and watch the Great Game unfold. And as Popcorn may well be GST-Free soon (being an Essential Food), perhaps a Popcorn Futures Contract of some sort to minimise tax......

Ah, GST, I hardly Knew ye....

While the Rate of GST is excluded from the ToR, Exemptions from it are evidently not. And from the loose lips of several pollies over recent days, you, dear reader, should be aware of the following candidates for Exemptions:

1.     Female sanitary products
2.     Fruit
3.     Vegetables
4.     'Essentials' (definition?)
5.     New houses

And any exemptions (from which GST is mercifully comparatively free at present) will have the following effects:

•     Decrease revenue streams from GST
•     With corresponding effects on Gubmint finances overall
•     Cause immediate compliance costs on businesses dealing with mixtures of exempt and non-exempt goods (FMCG retailers, especially)
•     With corresponding claw-back through (say it quietly) cartelised price adjustments to end consumers
•     With greatly increased scope for mis-description of goods ('Liquor', in the bad old days, was frequently sold as 'Drench' out in the back-blocks). So what's to stop yer local Baked Potato outlet selling you a $4 Raw Tater, which you promptly hand back to them for a 10c Filling and Heating fee?
•     Greatly increased non-tradeable activity in lawyers, tax accountants, and other advisory consultants
•     Increased software demands as the 'exempt product list' needs to be kept up to date and applied across all affaected businesses, to say nothing of the back-end Gubmint GST Return handling
•     Increased need for tax audits, Inspectorates and ancillary regulation to ensure that noses are being kept clean
•     Greatly increased non-tradeable activity for Gubmint to create, maintain and adjudicate over exempted categories of goods - vide the ATO's extensive guides for food-related businesses here 
•     The economic effects such as the squeeze-outs of smaller businesses in favour of franchises, big-box and corporate retailers: imagine trying to decide which of These food retailers you are.

Once a first step onto this slippery slide is taken, the basis of our current GST - free of exemptions for the most part, single or zero rate for the most part - is foobarred.

The exemptions list, being essentially political in the first place, is of course then open to pressure from identity groups for their favoured set of products. And all of them will have a justification, and some apparently sound reasons for arguing their cases. And all of them can Vote......

Which will, in short order, turn the Exemptions List into an essentially pork-barrel politics exercise. The result will be a fatal and probably irrevocable infection of a hitherto internationally recognised best-practise ad valorem tax system.

We probably have a Gubmint whose idealism, fearlessness and energy could induce them to take that first step.

I'd suggest bringing Popcorn, but am unsure as to the amount of GST it will attract in future......

How TLA Rates are arrived at

TLA's are greedy, but cunning with it. The steps to TLA budgets (I've coded the rules and relationships into a very few of the cubes that most TLA's rely on for quickly estimating the consequences of various settings) run like this:

1.     Gather all the blue-sky budgets from every nook and cranny of the whole show and bung 'em into the hopper
2.     The 'Rates Required' parent object gives the first, horrendous result. As does 'Capex Required' which feeds back into 'Rates Required' via depreciation, and also (of course) feeds 'Cashflow', and 'Financing Required'. Everyone promptly utters a few well-chosen but un-minuted Anglo-Saxon words, and the real work begins
3.     Firstly, a general paring of obviously stupidly inflated budgets and admonishments to their managers (but Promotions for the most egregious....)
4.     Secondly, a concerted effort to move the less obvious budgets into areas that can have 'Revenue from Modest Fees' (and thus, entirely coincidentally, subtract from 'Rates Required')
5.     Trim 'Capex' (which trims 'Depreciation' and hence 'Rates Required') OR (and more subtly) move it sideways into - ya guessed it - Activities with Fees Income
6.     Take another look at 'Rates Required' and see if it passes the obvious Smell Test - will Councillors pass this?
7.     Take a cursory look at the Fee-generating activities (where most of the sideways dumping has occurred) and see if They look acceptable (or are levied on such odious categories of subject that no-one cares - landlords, large businesses, car salespersons, hoteliers).
8.     It's highly likely at this point that 'Rates Required' is still way beyond the pale, so Phase 2 commences - alter the incidence of Rates via uniform charges, separate rates, more Modest Fees and so on.
9.     So 'Rates Required' is now fed by a plethora of Rates, Charges, Special Rates, Fees Income, and Differential rates. Note that the total has not altered - that is too obvious to mention at this point - the main effort is to disguise it as competently as possible
10.     The final check - are all the now-diffused sources of 'Rates Required', 'Fees and Charges' etc - sufficiently opaque as to survive public scrutiny? If Yes, carry on and levy 'em, else go back two clicks and obfuscate some more

One should never watch Laws, Sausages and Rates being made, to extend a very ancient saying....it could shake one's faith in Human Nature....