Herne Bay residents may have to pay more to fly, "Generation Rent" in song, why petrol prices are 30% higher than five years ago, MERS, Twitter reacts to talk of Labour think tank & more

Here are 10 interesting items I've found on the Internet over the past week or so. As always, we welcome your additions in the comments below or via email to jenee.tibshraeny@interest.co.nz. 

See all previous Top 10s here.

1. One man threatens to send South Korea’s entire economy into recession.

South Korea's central bank has cut interest rates to a record low of 1.5%, amid fears the spread of Middle East Respiratory Syndrome (MERS) will hurt its economy.

Latest reports confirm 10 people have died and around 3,000 have been quarantined after a businessman last month brought the infection back home with him following a trip to the Middle East.

Morgan Stanley expects that if the situation is contained in a month, retail and restaurant sales and tourism revenue will drop by 10%-20%. This could cut second the third quarter growth by about 0.5% and annual GDP by 0.15%.

If the outbreak gets out of control, Morgan Stanley expects the economy to tumble into recession, slashing second and third quarter GDP growth by 3.0%.

It says the MERS outbreak could have a similar effect on the economy to last year’s Sewol Ferry tragedy, where 304 people were killed after their boat sunk.

Here’s a graph from Morgan Stanley:

And a South Korean wedding photo that’s unexpectedly become a symbol of the health scare, after the group jokingly wore masks for the group shot.

2. Airlines looking to charge “rich people” more.

The Sydney Morning Herald reports:

Airline chief executives say the industry is moving toward individualised pricing using data such as postal codes and other personal attributes known from frequent flyer programs rather than pricing based on demand for a particular flight.

"It is completely inevitable," said Alex Cruz, the chief executive of European low-cost carrier Vueling at the International Air Transport Association annual meeting in Miami.

"Whether it is [postal] code related or how much I know you want that flight, the barriers are coming down."

There are already reports of travel companies like Orbitz and American Airlines posting higher prices for customers using the Safari web browser found on Apple products due to the assumption they may be wealthier than those using other browsers like Internet Explorer.

Qantas Airways chief executive Alan Joyce said with the amount of data held by the airline – including from its frequent flyer program with 10.7 million members – it would work toward designing individual products.

3. Petrol prices explained.

The Ministry of Business Innovation & Employment’s Energy Quarterly released this week, shows petrol prices have increased by 30% from the 2010 March quarter to now.

The price of crude oil dropped from around NZ$109 a barrel at the end of March 2010, to around NZ$71 a barrel at the end of March 2015.

So why have prices risen at the pump?

This is a complex question to answer, but data collected by interest.co.nz shows the amount oil companies paid in duties, taxes and GST increased by 21% over this time to NZ$0.92 per litre sold at the pump.

The amount oil companies received after importing the crude oil, refining it and distributing it, increased by 58% to NZ$0.57 per litre sold at the pump. 

There was a marked shift in the amount oil companies received after Z Energy bought Shell's New Zealand downstream business. Infratil and the New Zealand Superannuation Fund are Z Energy's main shareholders. 

4. Chinese economic slowdown benefits environment.

BP’s annual Statistical Review of World Energy, released earlier this week, highlights the effect the slowdown in China’s economic growth is having on energy markets.

Bloomberg reports:

A slowing economy and shift away from heavy industry meant 2014 saw energy consumption grow just 2.6 percent, less than half its recent average and the smallest increase since the Asian crisis of 1998.

The country's energy intensity – the amount of fuel it needs to consume to generate each dollar of GDP – is getting closer to U.S. and European levels.

If, and BP says it's quite a big if, China keeps a lid on new steel mills and cement factories, it'll have a big impact on global demand in the years ahead. 

Furthermore, the Chinese Government is proposing to double taxes on emissions that exceed new thresholds it’s looking to set.

According to a draft law that’s been put out for consultation, it’s also looking to halve taxes on emissions that are below half the national standard.

A study released by the London School of Economics earlier this week also said China's greenhouse gas emissions will probably peak in 2025, five years earlier than its stated target.

5. Pre-fabrication the future.

Shamubeel and Selena Eaqubs' call for more pre-fabricated houses in their book ‘Generation Rent: Re-thinking New Zealand’s Priorities’. They write:

Pre-fabrication, which provides as much as 70 per cent of all new houses in countries such as Sweden, offers the chance to build houses more cheaply through standardisation and greater control over the building process. It also reduces waste and environmental impacts. In addition, it would entice large overseas players, who deliver developments at lower costs elsewhere, to set up shop in New Zealand.

Idealog magazine features firms providing pre-fab houses in New Zealand. It reports Matrix Homes is looking to churn out 500 houses a year. It can build a four-bedroom home for under $200,000, in as little as 12 days.

It also points to ContainerCo, a company that lets you design a house made from shipping containers using an app on its website.

6. "Generation Rent" in song.

Kiwi band, Tono and the Finance Company, has written a fantastic piece of musical satire that takes the mickey out of renting in Auckland. The track 'Marion Bates Realty' epitomises the trials and tribulations of Generation Rent.

Lyrics include: "The tide is rising on Grey Lynn; it's coming from Herne Bay. They're painting the houses whiter shades of white, and putting on those Franklin Road lights. Now I understand how a suburb goes from a slum to a snobville; It starts with Marion Bates Realty... You're gentrifying me out of my street."

7. South Island iwi powerhouse enters Auckland property market .

Ngāi Tahu Property is entering the Auckland market and has snagged Eden Park Trust boss David Kennedy to lead the expansion.

Ngāi Tahu Property chief executive, Tony Sewell, told BusinessDesk:

“After appropriate investigation and analysis, Ngāi Tahu Property has decided to expand the business to include the Auckland market.

"The company has experienced successful growth in the South Island and is ideally placed to maximise the significant opportunities in the property development sector in Auckland.”

BusinessDesk further reports:

Last year, Ngāi Tahu said its property business boosted earnings before interest and tax by 66 percent to $63.4 million in the year ended June 30, its third record result, with strong sales in its Christchurch residential developments, and its Eyrewell farming development coming on stream and delivering results above budget.

The iwi has been diversifying its investment portfolio, including joint investments with Waikato's Tainui Group Holdings in dairy technology manufacturer Waikato Milking Systems and national passenger transport firm Go Bus.

Kennedy will leave the Auckland stadium, where he was responsible for a $270 million upgrade in preparation for the Rugby World Cup, in late August to become general manager of the iwi's Auckland property unit, Ngāi Tahu said in a statement.

The property investor, developer and rural land ownership specialist currently has assets valued at more than $600 million.

8. Labour think tank or faction?

Veteran political journalist, Richard Harman, writes on his blog Politik: 

Controversy within the Labour Party over moves by some right wing members and MPs to set up a think tank aligned with the party.

Some sources say that things got heated at last week's Labour caucus over the proposal and expulsion of some of those involved was threatened.

But a spokesperson for Labour Leader Andrew Little says that while he does not discuss what happens at caucus, those reports are "inaccurate".

…Names mentioned in connection with the proposal include two Labour members usually identified as being on its right wing; Porirua Mayor, Nick Legget and the blogger and commentator, Phil Quinn.

Former candidate, Josie Pagani and Napier MP, Stuart Nash are also said to be involved.

…Josie Pagani confirmed to Politik that she was involved and said that the aim was to model the new body on the British Labour-aligned think tank “Progress.”

Here’s what people are saying about the news on Twitter:

Matthew Hooton: Looks like @nzlabour may finally be getting back on the right track with launch of new Progress faction.

Andrew Riddell: @MatthewHootonNZ Back on the track to 20% of votes?

George Darroch: This faction in Labour have caused it immense harm in the last 6 years. Just when they had reached a point of unity..

John Palethorpe: @mrdarroch This is one of those things you quietly step away from and let them get on with it.

Nick Leggett: @PouTepou @RMAHarman @philquin @josiepagani "Right wing" is a legacy term from 1980s battle. Labour needs to broaden its ideas & support.

Scott Hamilton: @POLITIKNZnews Only in a country as anti-intellectual as NZ's would faction become a dirty word. Factions are part of democracy

9. Diamonds are[n’t] forever.

De Beers, Rio Tinto Group and OAO Alrosa have formed the Diamond Producers Association, to take a collaborative approach towards ensuring young people don’t’ trade diamonds for other luxury items on offer these days.

The association will spend $18 million on advertising targeting millennials and gen Y, over three years. Bloomberg reports:

At stake is the future of the $80 billion diamond market as other luxury goods, especially in the US, show faster growth.

“Millennials are no less interested in love than the generation before, but we need to make sure they continue to see diamonds as the expression of that,” said Stephen Lussier, head of marketing at De Beers.

Demand for diamonds in the U.S., the biggest market, is under pressure as consumers’ appetite for other products is growing faster.

From 2004 to 2013, the luxury electronics sector registered annual growth of almost 14 percent, while fine wines and champagnes increased 11 percent. Demand for luxury jewelry rose just 1.9 percent, trailing high-end beauty products, tobacco and watches over that period.

10. World Press Photo Exhibition must-see.

The World Press Photo Exhibition is coming to Auckland again this year, and attending is a must.

The exhibition features the best images chosen from almost 100,000 entered into the World Press Photo competition by 5,700 photographers from around the world.

I’m giving the exhibition a bit of shameless PR, because I believe it gives you a powerful insight into what the news stories, we don’t blink an eyelid at as we flick through on our iPhones, mean for real people.  

The exhibition’s on between July 4th and 26th at Smith & Caughey’s on Queen Street.

The top prize was won by American photographer John Stanmeyer, for a National Geographic magazine shot of African migrants on the shore of Djibouti at night, raising their phones to try to get reception from neighbouring Somalia:

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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13 Comments

#9. I do wonder about the relevancy of lumping an entire cohort into a single category like 'gen y'.
And whatever happened to gen x? All we hear about is boomers and millennials nowadays.

Reality is biting for we Gen Xers - http://finance.yahoo.com/news/gen-x-reality-really-does-090000804.html

“I identify with this generation between the Baby Boomers
and Generation X. My mother was a Baby Boomer,
and I’m part of Generation Jones.”
Barack Obama, U.S. President

Cynical slackers listening to grunge music.......those were the days.....

#6 Yes, that song was released by Tono and the Finance Company... in 2011.

#9. Can't wait to see what brilliant marketing campaign De Beers will come out with next, diamonds - so precious...

#8 interesting some of those comments, bitchy infighting. So a new "right wing" faction who maybe, just maybe recognises for Labour to be elected they have to hold the centre, centre-left ground, being "torn a new one" by the "left wing" for not doing as they are told with "unity" thus making themselves even more un-electable. Simple for me, the reason the Green's got no where and labour did so badly is the voter took one look at the loopy left option and ran to WP and National, I nearly did.

Hmmm #6 and #9

De Beers, Rio Tinto Group and OAO Alrosa have formed the Diamond Producers Association targeting millennials and gen Y,

Hmmm - millennials and gen Y living in rented properties wearing all their diamonds.

The Labour party died in the late 70's in my book. They have only gotten worse since then.

Once Winstone retires or dies that will be the end of NZFirst

If the Greens don't shine under their new leadership JK will rule forever

Who's left to vote for?

Gen-Zero

Gen Xero

#2 is illegal, not just unethical.

#9 too late, apart from some easily swayed self interested people; many folks are wakin up to the idea that "love" isn't shown by plunging yourselves further into terrible debt to have a small crystal ripped from the Earth at a huge mess and expensive frequently using poor or unethical labour policies. (the significant profits going to wealthy jewelers and old world money people (and gods know who else that you'd be sicken to hear about).

Nobody's fooled by De Beers' nonsense any more. The human rights abuses, cartel behaviour, false scarcity, advertising strategies and price manipulation are well-known in a way they weren't even 20 years ago. I've no interest in owning something expensive and useless that I'd have to keep track of forever. The man raised the subject of whether I liked diamonds, and my response was to say 'nah, but if you really want to get me something, how about this tool for my hobby for a couple of hundy'. I use the thing every week, but a diamond would just be sitting uselessly in a drawer somewhere. Knackers to that.