NSW launches new infrastrucure bonds for small investors

Big A.D.

Big A.D.

Well-Known Member
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http://www.smh.com.au/nsw/barry-bonds-to-rebuild-state-20110827-1jfhc.html

SMALL investors will be asked to help rebuild NSW by entrusting their savings and superannuation to the O'Farrell government.

The so-called ''mum and dad'' investors - and the growing market of people who manage their own super funds - will be targeted by the government to finance infrastructure such as the proposed north-west rail line.

Nine days before delivering his first budget, the state Treasurer, Mike Baird, today will announce the immediate release of ''Waratah Bonds'' which he will promote as ''perfect protection'' from roller-coaster financial markets.
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Gotta say...It's about bloody time.

Nothing ever gets built in NSW because the government can never find the cash. I have cash. I could lend it to the government so they could build something. I'd actually get some benefit out of whatever they build too.

Would you put money from your SMSF into these bonds? (Short version: backed by AAA rated state government, minimum investment is $10k, interest rate is a fraction lower than bank term deposit rates).

Thoughts?
 
As long as they dont try to make investing in government infrastructure compulsory for super funds - especially SMSF.
But that is what i fear big government will be doing over the medium to long term - targeting our their money in super.

I've said all along that super is just another tax masked as a forced savings scheme :D
 
it would have to be a competitive rate for me to even consider investing in these kind of bonds, but in theory it's not a terrible idea.
 
Does this mean that the NSW government is going to borrow more money to add to all the money it already owes?

...and when inflation hits and erodes the value of the AUD, they can repay it all with toilet paper?

Sounds just like the USA and Europe.


OC
 
Why don't they do like they do in Qld..Joe B J set it up, it's called the Qld Development Investment Corporation..It has investment all around Australia.

The investment money comes from State Government employees super contributions. Thats why Qld is the only state that does not have unfunded super.

Regards Errol43
 
"The investment money comes from State Government employees super contributions."


It is still borrowed money, and those dollars were supposed to be invested for the benefit of the contributors. It is exactly the same as the US Department of Social Security, where about US$2.5 Trillion is tied up in US Treasury Bonds, and the money has been SPENT by the USG.

The retirees (in the USA and in OZ) will now look to the Government and taxpayers to fund the pensions.


OC
 
I don't get this...

Mr Baird said there would be no cost to taxpayers.

Administration costs would be passed on to investors.
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Then where's the coupon payments or "interest" going to come from on the bonds?

Surely the bonds will have to be sold either at a discounted rate to claim a higher value at maturity OR they will be paying out interest (coupon payments) during the bond's lifetime.

What's going on?

Although it's definitely safer to see my super in these bonds than Euro bonds, I don't have much faith.

Even the name "Waratah" is bad. The Waratah trains went over budget, and they suck and there's still only 2 of them after spending massive amounts of money. Bah!
 
I think that investing in national infrastructure is an intelligent thing to do indeed, as long as the process is well managed and the money is not wasted. This kind of investing provides a legacy for the next generation.
 
...and a bill for our grandchildren to pay for the Pensions.

You build 'infrastructure" with the dollars, and they can't be spent twice.


OC
 
Old Codger said:
...and a bill for our grandchildren to pay for the Pensions.

You build 'infrastructure" with the dollars, and they can't be spent twice.


OC
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I guess that I mean that if someone wants to invest money, I would rather see them invest in national infrastructure than in Coca Cola shares.
 
The debt cycle continues. How about this - > if the people of today want some infrastructure built, pay for it. Government doesnt have enough money? Introduce a tax or raise taxes. People dont want a new tax or higher tax? Then you dont get your infrastructure built.

Pretty simple really. The key fact is: people want something for nothing. They want their infrastructure projects built but dont want to pay for it, so they issue bonds which then just shifts the payment of their projects off to some future date to people who havent even been born yet.
 
Matthew 26:14 said:
The debt cycle continues. How about this - > if the people of today want some infrastructure built, pay for it. Government doesnt have enough money? Introduce a tax or raise taxes. People dont want a new tax or higher tax? Then you dont get your infrastructure built.

Pretty simple really. The key fact is: people want something for nothing. They want their infrastructure projects built but dont want to pay for it, so they issue bonds which then just shifts the payment of their projects off to some future date to people who havent even been born yet.
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That seems a little short sighted. Aren't you benefitting from infrastructure that was built years ago that you didn't have to pay for? If a piece of infrastructure will benefit future generations then why shouldn't they pay for some of it?
 
Big A.D. said:
http://www.smh.com.au/nsw/barry-bonds-to-rebuild-state-20110827-1jfhc.html

SMALL investors will be asked to help rebuild NSW by entrusting their savings and superannuation to the O'Farrell government.

The so-called ''mum and dad'' investors - and the growing market of people who manage their own super funds - will be targeted by the government to finance infrastructure such as the proposed north-west rail line.

Nine days before delivering his first budget, the state Treasurer, Mike Baird, today will announce the immediate release of ''Waratah Bonds'' which he will promote as ''perfect protection'' from roller-coaster financial markets.
Click to expand...

Gotta say...It's about bloody time.

Nothing ever gets built in NSW because the government can never find the cash. I have cash. I could lend it to the government so they could build something. I'd actually get some benefit out of whatever they build too.

Would you put money from your SMSF into these bonds? (Short version: backed by AAA rated state government, minimum investment is $10k, interest rate is a fraction lower than bank term deposit rates).

Thoughts?
Click to expand...

I wouldn't put my money to fund government projects. The governments incompetence ensures any project they work on will be over budget and a poor return (cross city tunnel, lane cove tunnel etc.)

In times like these, better continue stacking non-counter party risk assets.

Slam
 
Old Codger said:
You can get more than 4.5% on Fixed Deposit at Westpac.
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Dwayne said:
Looks like they will be paying 4.5%.
Click to expand...

Big A.D. said:
interest rate is a fraction lower than bank term deposit rates
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Which Big AD effectively told you in the original post OC & Dwayne so I'm not sure what your point is ....
 
Old Codger said:
My "point" is nothing!

I missed the words in the OP.

HUMBLE apologies!


OC
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SShhhhhh - don't talk about nothing or someone here will want that nothing and try and sell it for more nothing and free post too boot .....
 
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