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Unemployment rate rises to 7.3%, worse than expected; NZ$ falls (Update 5)
February 4th, 2010New Zealand’s unemployment rate rose to a seasonally adjusted 7.3% in the December quarter from 6.5% in September, as more people entered the job market but could not find work, Statistics New Zealand said.
(Update 1 includes Stats NZ release, Update 2 includes labour force participation rate, Update 3 follows currency movement, Update 4 includes ASB economist reaction. Update 5 includes BNZ economist reaction.)
Economists said the result was worse than the Reserve Bank expected and meant the central bank would remain comfortable with its outlook of a steady Official Cash Rate (OCR) at 2.5% until mid-2010. Wholesale interest rates and the New Zealand fell slightly as financial markets nudged their expectations of the OCR down a bit.
Retail mortgage and deposit rates, however, are unlikely to fall as banks face higher funding costs and capital requirements in coming years. Bank net interest margins have fallen more than 20 basis points in the last year as they are forced to raise term deposit rates to encourage deposits from local savers and to pay higher rates for international wholesale funds.
Economist expectations had centred around the unemployment rate rising to 6.8% during the quarter. The New Zealand dollar initially fell from 70.8 USc to 70.1 USc on the news and had fallen to around 69.9 USc by 11:30am.
ASB economist Chris Tennent-Brown said the headline unemployment figure was higher than economist expectations because more people chose to enter the workforce than was expected at this stage of the economic recovery. Tennent-Brown said the figures would continue to make the Reserve Bank comfortable with its view that it can keep the Official Cash Rate on hold at 2.5% until the middle of 2010 (see full comments below).
BNZ economist Stephen Toplis said the figures showed some slack in the market that meant the Reserve Bank could be relaxed about its current monetary policy outlook. (See fuller comments)
Seasonally adjusted figures show an extra 16,000 people joined the labour force during the December quarter (up 0.7%), while the number of unemployed rose by 18,000 to 168,000 people. This was the highest number of unemployed people since the June 1993 quarter, Stats NZ said.
The 7.3% unemployment rate is the highest level since the June 1999 quarter and up from 4.7% in December 2008 and 3.5% in December 2007. The number of employed people fell by 2,000 to 2,152,000.
The labour force is made up of those in work (employed) and those not in work but searching for it (unemployed). The number of working age people out of the labour force altogether rose by 4,000 (0.3%) to 1,086,000. The labour force participation rate rose 0.1% to 68.1% of the total working age population in the December quarter from September.
Here is the release from Stats NZ:
In seasonally adjusted terms, the number of unemployed continued to increase during the December 2009 quarter, reaching 168,000, while the unemployment rate rose to 7.3 percent, Statistics New Zealand said today. The unemployment rate is now at its highest level since the June 1999 quarter. The increase in unemployment and the unemployment rate was mainly due to a rise in the number of people entering the labour force but unable to find work.
During the past year, the increase in unemployment was particularly marked among the youth (15–24-year-olds), with the unemployment rate for this group rising 6.4 percentage points to reach 18.4 percent. There were also marked differences in the unemployment rates by ethnic group. The unemployment rate remains high for the Māori (15.4 percent), Pacific peoples (14.0 percent), and Middle Eastern/Latin American/African (17.1 percent) ethnic groups, while the unemployment rate for the European ethnic group stands at 4.6 percent.
Employment fell slightly during the quarter with the number of people employed decreasing by 2,000 or 0.1 percent, compared with a 16,000 decline in the previous quarter. Full-time employment drove the latest decrease in employment. Actual hours worked also fell by 0.4 percent consistent with the fall in employment during the December 2009 quarter, and by 3.2 percent since the December 2008 quarter.
During the last year, employment fell by 53,000 or 2.4 percent. There were large decreases in the number of people employed in the Auckland and Canterbury regions. There were also marked decreases in employment in the manufacturing; retail trade and accommodation; and arts, recreation, and other services industries. On the other hand, employment in the health and social care assistance, and financial and insurance services industries has increased notably.
The labour force participation rate increased slightly by 0.1 percentage points to 68.1 percent during the latest quarter. There were 16,000 (0.7 percent) more people in the labour force due to an increase in the working-age population (0.4 percent) and an increase in the number of people unemployed.
Here is ASB economist Chris Tennent-Brown’s take on the figures:
The headline figures make the employment situation look worse than it is. Unemployment is rising because there are more people looking for work than there was previously (and more than expected at this stage of the economic recovery). In contrast, much of the preceding increases in unemployment came through the shedding of jobs.
The RBNZ’s December MPS contained a Q4 employment forecast of -2.4% yoy, which is in line with the actual employment outcome. Like us, the RBNZ will have been surprised by the extent of the lift in the labour force and consequent impact on unemployment (the RBNZ’s forecast for the March quarter unemployment rate – i.e. the quarter that follows today’s release – was 6.6%. The implications are a greater than anticipated degree of slack in the labour market and, hence, potential for wage growth to remain subdued for longer. From an activity point of view the implications for the RBNZ’s outlook are less negative: employment was in line with RBNZ expectations though hours worked were a touch softer.
The data will continue to make the RBNZ comfortable with its “around the middle of 2010” signalling for starting to lift the OCR. Our view is for an April hike of 25bp, timed for after the key GDP, CPI and business confidence releases. However, the HLFS data do skew risks to the June MPS.
Here is BNZ economist Stephen Toplis’ take on the figures.
The data confirm to us that there is sufficient slack in the labour market to be significantly constraining any inflationary pressure from this source. Accordingly, the RBNZ can remain reasonably relaxed with its current monetary settings. Nonetheless, while the unemployment rate looks ugly, not only will unemployment peak at a lower level than past cycles, but there is also very clear evidence that the recovery is gaining sufficient momentum to start creating jobs again soon.
It’s not that the labour market is suggesting a weaker than anticipated pick up in economic activity. To the
contrary, it is consistent with an economy which is well and truly turning the corner. Indicative of this, today’s Household Labour Force Survey report, for the December quarter, showed that only a net 2,000 people lost their jobs in Q4 (a 0.1% drop in employment). This is a marked improvement on the average of 17,000 a quarter over the previous nine months. Moreover, it is entirely consistent with our view that, on a net basis, there will be no more layoffs.
Tags: ASB, Chris Tennent-Brown, Employment, OCR, Official Cash Rate, RBNZ, Reserve Bank of New Zealand, statistics new zealand, Unemployment
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February 4th, 2010 at 11:01 am
are there any good deals on one way tickets to Oz at present ?
NZ pretty manged by the looks of this sort of data, and seriously, what incentives are there to grow a business given the timid steps the Cabinet is taking to undo the last decade of envy politix…
February 4th, 2010 at 11:19 am
Great news – 92.7% still employed!
February 4th, 2010 at 11:23 am
Employed by whom Crystal Balls?….
February 4th, 2010 at 11:26 am
Crystal Balls,
Huh?
Include the retired, the DPB, ACC, sickness benefit etc and see if you get to 92.7%.
Then, for fun, include working people who receive benefits such as working for families or KiwiSaver perks from the Government.
If you really want to be sick, then include children and people who work for the government.
Whilst it may be correct for you to claim that 92.7% of people do not receive the unemployment benefit, to claim that 92.7% of people are still employed is grossly wrong.
On the measure I use – people who work in the capitalistic economy and do not receive benefits from the government – the figure is way, way, closer to zero than 92.7%.
February 4th, 2010 at 11:31 am
I’m with Crystal Balls, the glass is still 92.7% full.
Phil – It doesn’t include retirees & children etc, as the article says – “The labour force is made up of those in work (employed) and those not in work but searching for it (unemployed). The number of people out of the labour force altogether rose by 4,000 (0.3%) to 1,086,000.”
February 4th, 2010 at 11:33 am
I think we are heading for the Feb 92 peak but with the rate staying high for a long long time. The massive debt levels held by the private sector mean there will be very little investment in new business. Too much capital is flying out of the country paying for the cost of the credit stupidly borrowed in the bubble. This is why Key and Co are desperate to entice wealth into Noddyland. Trouble is, because the govt has failed to end the property ponzi scheme, any wealth coming in has been chasing property. This explains the desperate hunt for capital in the rural business sector. But for a tougher govt stance 12 months ago, the troubles are now worse.
February 4th, 2010 at 11:33 am
“Internet linked to depression”
http://www.stuff.co.nz/technology/digital-living/3289687/Internet-linked-to-depression
“it is not clear whether the internet causes depression or whether depressed people are drawn to it”…….
probably goes some way to explaining the abundance of pessimism in these blogs….
February 4th, 2010 at 11:36 am
Murray,
Depends on the question.
If the question is “who pays?” then including everyone who doesn’t pay makes total sense. The retired, the children and those of working age who do not contribute to the “give” side of the ledger need to be fed from the “take” siide.
Whilst give+debt will work for a while, eventually there must be some equilibrium between give and take.
The “who pays?” question will only truly matter once we reach the tipping point.
From what I can tell, an elephant is increasingly riding on the shoulders of an ant.
February 4th, 2010 at 11:40 am
Murray – the glass isn’t half full – there are a lot of people (approx another 5%) who are not “officially unemployed” but would like a job. A pretty significant number are part time and would like to work more hours too…
What really matters is that its worse than expected. Not good.
Its interesting as a bigger picture / wider angle view that lower age brackets bear the brunt of both the change in level and the increase in unemployment rate.
February 4th, 2010 at 11:41 am
Crystal Balls; look at the rate for 18-24 year olds: 18.4% (that excludes the students-on-the-dole for the summer because they are not counted as jobless). Meanwhile restrictions are coming on polytech and university entry. It’s a recipe for social disaster.
February 4th, 2010 at 11:42 am
Ants can carry up to 50 times their body weight, but an elephant?!! We should have gone “squish” a long time ago!…..
February 4th, 2010 at 11:43 am
Don’t forget the “unemployed, but spouse/partner earns above the threshold for receiving the unemployment benefit”.
February 4th, 2010 at 11:48 am
@Trev, they are counted in the 7.3%, that is why the number in the HLFS unemployment is around 160K while the number on the dole is only around 60K
February 4th, 2010 at 11:50 am
Arse about short sighted Kiwis – plenty of incentives to on speculate property that increases the wealth of the country by zero – very few incentives for those who want to produce tangible wealth.
February 4th, 2010 at 11:51 am
Welly – how does Stats NZ know who they are?
February 4th, 2010 at 11:52 am
We have only 1.7 million people left paying taxes in the private sector having to support 1.7 million state workers, beneficiaries, and retirees. That’s 1 for 1 – so thank God for the corporates. And 1.7 million people working in the private sector having to pay enough tax to support a population of 4.13 million. [I'd love to know the equivalent figures in Greece, Spain and Portugal - the UK for that matter.]
And that was before unemployment starting rising over this recession.
We live in a parasite society. Government spending is out of control, there is no will whatsoever to curb that, indeed, property taxes, ETS, ACC increases … Key is still growing the State.
Enough said.
February 4th, 2010 at 11:59 am
Cut through the crap…the rate has a way to go before reaching a ‘top’…BS though it may be…and then it will stay there. The problem is the capital needed to generate employment in the productive sector is going to pay the cost of the gargantuan mountain of household debt and English is flat out building a mountain of public debt alongside. Throw in the fact that incoming wealth is still chasing bloody property and you have an economic disaster.
Maybe…just maybe…the fools in the Beehive will wake up. They cannot sleepwalk to the next election.
February 4th, 2010 at 11:59 am
There is no way the current unemployment figure stats can be even closely compare to the pecks of the 1990s….
The whole basis of the 2 stats are based on completely different parameters
If any Statistician, media commentator or economist was really worth their salt, the would get off the bums and adjust todays methods back to the 1990s and visa versa as best they can …THEN come up with something that can and mean something that is realistic.
I would hazzard a gess that current levels on 1990 methods would show around the 10% levels at this point in time
Till then any comparison is just political and media BS.
and any discussion is pointless.
February 4th, 2010 at 12:08 pm
Phil;,
“Include the retired, the DPB, ACC, sickness benefit etc and see if you get to 92.7%.
Then, for fun, include working people who receive benefits such as working for families or KiwiSaver perks from the Government.
If you really want to be sick, then include children and people who work for the government.
”
agree. Remember also the HUGE number of students these days. This to my mind has been the most significant contributer to skewed unemployment stats. How many NZers > 16 in school/tertiary now as compared to 30/40 years. I am guessing relative to population it would be 4* as much?? Thats a huge sector of the economy, [and lets face it we dont need all these skills]. No wonder the workforce is in the minority. At least students mostly pay their way, so to some degree they are neutral.
February 4th, 2010 at 12:09 pm
Wally espically if that’s 2092 rather than 1992! Almost a 100 year depression coming up?
February 4th, 2010 at 12:09 pm
Well said Wally – about time we killed the spec property market and concentrated on rewarding those who willing to produce meaningful saleable (globally) goods and services. Why are we forever sending raw materials OS instead of value added goods? And for all those who say the the property market employs people, I say yes it does and we should do all we can to support the good long operators and do them a favour and put reckless speculators out in the cold along with those in the real estate and valuation industry who supportthis reckless behaviour.
February 4th, 2010 at 12:22 pm
So surprise surprise the economists are way out yet again – are they just dumb or have too many vested interests?
I can recall saying several times the numbers would be higher than predicted, anyone who works in the real world knows the trouble Uni graduates are having getting work
I think we will peak around the 7.5-7.8% mark
February 4th, 2010 at 12:28 pm
Unemployment and immigration are strongly related the 21,000 net increase last year only added to the unemployment figures, I pick very low or possibly negative migration this year. Talk of recovery is a joke our economy is still based on property values and when values start falling again the economy will follow suit, there is still alot more pain to come unfortunatly.
February 4th, 2010 at 12:36 pm
Wow.
Unusual for all the economists/predictors to get it wrong by so much. The markets won’t have priced it in at all. There’ll be some big catch ups today.
If US measures are anything to go by (see below) then NZ’s broadest measure of unemployment would have our rate at around 12.5%.
In this article from the NY times they talk about the official rate vs the broadest rate.
http://www.nytimes.com/2009/11/07/business/economy/07econ.html
…In all, more than one out of every six workers — 17.5 percent — were unemployed or underemployed in October. The previous recorded high was 17.1 percent, in December 1982.
This includes the officially unemployed, who have looked for work in the last four weeks. It also includes discouraged workers, who have looked in the past year, as well as millions of part-time workers who want to be working full time.
The official jobless rate — 10.2 percent in October, up from 9.8 percent in September — remains lower than the early 1980s peak of 10.8 percent…
February 4th, 2010 at 12:41 pm
Problem is the risk vs reward equation for productive endeavours doesn’t stack up.
i.e. Easy to hire hard to fire.
Reward having kids not having workers.
Tax success, reward mediocraty.
The national phsycee needs to change.
February 4th, 2010 at 12:42 pm
Mark Hubbard says it all. “We live in a parasite society. Government spending is out of control, there is no will whatsoever to curb that, indeed, property taxes, ETS, ACC increases … Key is still growing the State.”
INMHO the emphasis, from this web site, blaming the property market for the countries woes is nothing more than a smoke screen. Key is a charlatan. Wasn’t he going to be tourism’s saviour.
February 4th, 2010 at 12:47 pm
@ John
Problem is the risk vs reward equation for productive endeavours doesn’t stack up.
i.e. Easy to hire hard to fire.
Reward having kids not having workers.
Tax success, reward mediocraty.
The national phsycee needs to change.
Couldn’t agree more, but NZ relies on asset increases to fund lifestyle, not productivity.
February 4th, 2010 at 1:08 pm
I’m with Steptoe and Phil. When Labour came in they moved 50-60,000 long term unemployed onto the sickness benefit. If unemployment was measured on the same parameters as the 1980’s let alone the 1930’s we’d be well over 10% now.
Personally I’ve been looking for work for 6 months (although half heartedly) and even with a lot of experience haven’t got past the phone interview stage (about 50 applications) Every position at the moment is attracting hundreds of applicants – that new Pak & Save in Manukau had thousands turn up.
I know down at the gym in the morning there are many guys like me in their 30’s and 40’s who are either out of work, or if they’re contractors, had their work dramatically reduced. We don’t bother registering with work and income because of pride or because we have spouses who work and what’s the point if you don’t qualify for any assistance. You might only have 10 hours a week but you still show up as being employed.
February 4th, 2010 at 1:16 pm
I checked the Stats NZ website to learn more about the HLFS.
Has anyone here ever completed this survey? Be interesting to know.
I have never done it and do not know anyone who has been asked to complete it.
February 4th, 2010 at 1:22 pm
@stevek
“I’m with Steptoe and Phil. When Labour came in they moved 50-60,000 long term unemployed onto the sickness benefit. If unemployment was measured on the same parameters as the 1980’s let alone the 1930’s we’d be well over 10% now.”
These people were originally employed by the railways or MOW, which labour effectively closed in the 1980’s pushing all these people onto the unemployment benefit. How handy then that they then moved them to the sickness benefit.
“I know down at the gym in the morning there are many guys like me in their 30’s and 40’s who are either out of work, or if they’re contractors, had their work dramatically reduced. We don’t bother registering with work and income because of pride or because we have spouses who work and what’s the point if you don’t qualify for any assistance. You might only have 10 hours a week but you still show up as being employed.”
Hence the broad measure I mentioned above giving a rate around 12.5% in NZ
February 4th, 2010 at 1:25 pm
May as well include housewives in that figure and pump it up to 20%…
February 4th, 2010 at 1:28 pm
Hey stevek…ask them at the gym what their hourly rates are….be prepared for a shock.
February 4th, 2010 at 1:30 pm
Im with ‘chrystal balls’ 90% full, or perhaps a better analogy would be only two bullets in the chamber, i just wish they wouldn’t keep pulling the trigger.
February 4th, 2010 at 1:40 pm
How do you move 50-60,000 loafers onto the sickness benefit?????
February 4th, 2010 at 1:41 pm
Stevek,
Not sure of your personal position but there is plenty of work down the west coast of the south island. Westport has plenty of jobs. The coal ,cement, dairy and fishing industries are thriving. A good place to live, warm climate, wonderful people, housing still modestly priced. Dont sit in the Auckland rathole. ” MOVE” Good luck.
February 4th, 2010 at 1:44 pm
Real work sucks anyway! I prefer my early “retirement”. Have to ramp up the currency trading I think. Serves no social purpose but you have no staff, no customers, no overheads and its exciting. You can even blog and surf while you’re “working”
February 4th, 2010 at 1:46 pm
Question is .. when are we going to see the peak (of unemployment) ?? Does anyone know roughly what the ‘lag’ is?
February 4th, 2010 at 1:50 pm
“the 90% employed therefore we are doing pretty well” argument is weak. We all know that 90% employed sounds better than 10% unemployed, but its still the same reality.
Fact is, the impact of unemployment is far greater than its statistical reality
February 4th, 2010 at 1:51 pm
Unemployed and at the gym….
hmmm
I have been made redundant, 4 days ago and have a veggie garden in….well I put it back in a while back when the proverbial was to hit the fan…just in case…create ones own win /win situation.
If become unemployed..better off
If didnt become unemployed, increased household spending power win win.
I would much rather keep fit in the garden and in effect add to the household income…rather spending power…. my time at around $80/hr tax free.
Got to go…another row of butter beans , beetroot, lettuce crop for the freezer before winter…thats not a smart a55 remark..Im serious.
I have no sympathy for those unemployed and while their way in non productive activities…its these same people who are whine and moan.
February 4th, 2010 at 1:58 pm
“The Government says a leap in the population is behind unemployment levels reaching their highest level since 1999″…haaaaaarhahahaha. What a total load of crap. Is this your honest opinion John?…
February 4th, 2010 at 1:59 pm
@steptoe
I sold my veggie patch….. got a unit on it now.
Good luck mate
February 4th, 2010 at 2:00 pm
@Spidy Sense – unless someone’s invented the magics, then perhaps thats not quite truthy.
February 4th, 2010 at 2:02 pm
But do you have hot MILF’s all over your garden Steptoe? Problem with veggies too is they’re always in season at the same time they’re dirt cheap at the supermarket, not to mention sterile city soil.
February 4th, 2010 at 2:02 pm
Steps: Unemployment is very pleasant in the February sun, s#*t in July when it has been raining for a couple of months and the vege garden is flooded or in permafrost. Get your winter crops in now….. (stevek; you have no soul, and wot’s a MILF or shouldn’t I ask)?
February 4th, 2010 at 3:25 pm
stevek Says:
“But do you have hot MILF’s all over your garden Steptoe? Problem with veggies too is they’re always in season at the same time they’re dirt cheap at the supermarket, not to mention sterile city soil.”
Or put another way..people cant plan ahead anymore, have forgotten how to the basics…and even at “dirt cheap supermarket Pisces” $80/hr tax free, nett after expenses is still good money….and yeah Im in the middle of Auckland..not rural.
And I did mention the frezzer…
ruru Says:
“Steps: Unemployment is very pleasant in the February sun, s#*t in July when it has been raining for a couple of months and the vege garden is flooded or in permafrost. Get your winter crops in now”
Next lot of Cabbage , cali, Broccoli will follow the current beans etc end Feb.
Flooding…thats an issue idiots or ppl who havnt a clue what they are doing m8.
And the weather? bit of rain, bit cold? work harder and dry out….or put another way, a pack of worses to damn scarred to get their hands dirty
Max Mitaphor Says:
“@steptoe
I sold my veggie patch….. got a unit on it now.
Good luck mate”
We where going to build but saw the writing on the wall back in 2006
And no such thing as luck…Think was Mark Twain who said “Luck is directly proportional to the effort put in”
Veggie garden…OH yeah thats right, its only those Bloody self centred greedy BBs who know how to grow them now, because thats how THEY managed back when their families where young and struggled to save for a house. and pay the mortgage when the gong got tough.
And for those who think one needs a big area to supply a family of 4…
2.8 mx 10m well managed will more than do it if carrots potatoes and kumura are brought…
Which means things like “I live in a small unit,” ” the ground is no good” are just excuses.
Yeah what is MILF ?
February 4th, 2010 at 3:25 pm
Unemplyment is rising along net migration, guess most new immigrants go straight for the benefit.
February 4th, 2010 at 4:35 pm
MILF = Female Parent with whom the user of the term would like to engage in carnal relations.
I guess cold showers aren’t a feature of stevek’s gym. (Free in the veg garden though…)
February 4th, 2010 at 4:43 pm
Burrowing down into the figures.
For the record. I said above:
Now I’ve just heard some of the breakdowns on the radio.
28,000 jobs lost to manufacturing.
25,000 jobs lost to tourism, catering, etc …
… and, drum roll, what was the one sector that gained?
No prizes. The public sector.
Now how could the tax working group, concentrating on how to tax even more the 1.7 million poor sods paying for this Nanny State, miss completely this only salient fact: the size of the State and State spending, and the fact that in these dire times, the damned thing is still growing. The Big State, here and throughout the West, is responsible for the mess we are in, and there is more likelihood this financial crisis leads to totalitarianism (again) than to anything good, certainly, per Hayek, to further serfdom.
February 4th, 2010 at 5:12 pm
Just heard of two big employers in our area under bank management, everything for sale. The banks have their own man inside and all decisions have to be OKed by him. Hundreds of Jobs at risk. Its now getting very ugly in the rural sector. Just the beginning.
February 4th, 2010 at 5:13 pm
Addendum: hardest hit age group – youth.
Why?
Mandatory minimum wage rates. (Big State again).
February 4th, 2010 at 6:06 pm
M.I.L.F. = Moro Islamic Liberation Front . A group who want autonomy on the Muslim dominated island of Mindanao , in southern Philippines .
February 4th, 2010 at 6:20 pm
Mark Hubbard: Don’t suppose you take labour weekend as a holiday then? Anyone who has a business and can’t afford to pay the minimum wage is in the wrong business. Simple.
Thank you for the enightenment about MILF: I shouldn’t have asked. Wiki’d it just after I asked the question and found the answer. Thinking about changing my username to Bored Housewife — would lend some now sorely-needed cred to my reputation.
February 4th, 2010 at 6:51 pm
Dear Mr Hubbard,
One can, of course, take the position that we don’t care about the problems people face today, and want to think about a possible tomorrow.
OK, but then don’t pretend to have any interest in human beings and their fate, and stay in the seminar room and intellectual coffee house with other privileged people.
Or one can take a much more humane position: I want to work, today, to build a better society for tomorrow…
This (it) leads directly to support for the people facing problems today: for enforcement of health and safety regulation, provision of national health insurance, support systems for people who need them, etc.
That is not a sufficient condition for organizing for a different and better future, but it is a necessary condition.
Anything else will receive the well-merited contempt of people who do not have the luxury to disregard the circumstances in which they live, and try to survive.
@bored Hosewife – good idea… I think we should try it
February 4th, 2010 at 8:12 pm
Unemployment has increased because Joe Worker senses the imminent recovery as the green shoots up his ass and decides hey let’s go jobbing. Nothing to do with running out of savings and needing the dosh to eat, drink and service debt.
February 5th, 2010 at 12:08 am
I think we are only beginning to see the effects of worldwide deleveraging and contraction.
In my industry, whereas the big boys in int’l communications and related manufacturing and networks infrastructure industries were still talking up forward business intentions a year ago at the height of the credit crisis… now they are not – now they are mothballing those earlier R&D plans left right and centre. Now they are planning the ‘hunker down’ for the next decade.
Unless Key’s government has a plan for managing unemployment and other benefit administation in a totally different manner (i.e. much less labour intensive) the public sevice roll will just get bigger and bigger and bigger and bigger – and become more and more inefficient.
Time to be bold – time for a GMI – time for major tax/welfare reform – becuase any package of reform has to address both sides of this ledger.
February 5th, 2010 at 1:38 am
Time for KATE to be P.M. ‘cos we ain’t gonna get bold from John Key . I agree that he’ll let the N.Z.Debtanic hit the icey rocks , ‘cos he agreed to the pre-planned course , rather than steer her to safety . Nice to have such a principled and honest guy as captain . ……….Poop pooooooooooop !
February 5th, 2010 at 8:49 am
moNA wrote in an arrogant fashion, and simplistic in that he/she equates laissez-faire with cruelty, and thinks, no doubt, he/she will find compassion from the State (which he/she would soon be disabused of, if the chips are ever down):
OK, but then don’t pretend to have any interest in human beings and their fate, and stay in the seminar room and intellectual coffee house with other privileged people.
Or one can take a much more humane position: I want to work, today, to build a better society for tomorrow…
Mmm. Strange then you don’t want to create the conditions whereby youth can get into work?
Mandatory minimum wages rates are keeping youth unemployed, it’s clear in the statistics from New Zealand, and most certainly the USA (I’ve not seen graphs of unemployment breakdowns from other western countries, but I guarantee it’s replicated.)
Did you get my point about the Big State and how it kills freedom and devolves into violence ultimately? How do you think a society can operate when one person is working, having to support one who is not? Western societies are breaking down, and quickly, because Big States took over and turned societies parasitic, feeding off their most productive – by chaining them down with taxation and regulation – until there is and will be nothing left to support them (certainly not free, capitalist economies). Though the Corrections services are and will do better and better – because jail cells are the true homes that welfarism builds. Watch the news.
There was a fascinating piece on Greece on the BBC last night: how in that country the IRD officers are being given sweeping police state powers, and the populace fear them (and I mean scared crazy): that country is very soon under the tyranny of complete totalitarianism (again). I don’t want to live like that: why would you?
February 5th, 2010 at 9:04 am
Recall the days when television detector vans scoured the neighbourhoods . Trying to locate signals from houses where no TV licence had been paid . That was not so long ago , just 3 decades ……………. And it was right here in egaltarian Godzone , in Kiwi-land .
Not a gigantic leap to step back into the totalitarian days of Muldoon . Kaiser Clark had us well onto that path . Another 3 years of her ………… Scarey thought !
February 5th, 2010 at 9:07 am
@RT – thanks for that, reminded me of the Fred Dagg adverts of the time.
February 5th, 2010 at 10:20 am
Sorry Mark,
The quote was uncredited at the time.
It was Noam not moNa
It summed my viewpoint better than I could manage:
“Or one can take a much more humane position: I want to work, today, to build a better society for tomorrow…
This (it) leads directly to support for the people facing problems today: for enforcement of health and safety regulation, provision of national health insurance, support systems for people who need them, etc.
That is not a sufficient condition for organizing for a different and better future, but it is a necessary condition.”
http://www.chomsky.info/
So many of us seem to overlook NOW in their personal quest for Nirvana.
e.g. Iain P – brilliant history – and correct earnest analysis, but no steps in between.
I feel the same with your analysis, you may have a clear vision(maybe), but “no steps in between”. I was trying to hint…
For myself, I read this site to see what NZ has become during the many years I have been away. I play.
Truth is…. I don’t really like what I see here.
“I want to work, today, to build a better society for tomorrow…” it ain’t happenin’
Walter tries….
I spit the dummy.
February 5th, 2010 at 10:41 am
No issues moNa – I know it’s easy to get threads and posts mixed.
“I want to work, today, to build a better society for tomorrow…”
So do I, but what I have learned is that the more compassionate a State/Government sets out to be in a tyranny of the many, then the more ruthless it has to be at containing and living off its productive members, who soon understand their freedom lies in being free from the Big State. The classical liberal ’s’tate which should be the protector of individual freedoms is morphing quickly into a totalitarian State that has become the biggest destroyer of those freedoms – and that’s happening all over the West: this financial crisis is hastening the lurch to totalitarianism, especially in the US and UK where through the shameful bailouts, so much private enterprise has now been nationalised. (Just as Hayek said it would).
Indeed, the amount of State compassion (an oxymoron) is inversely proportional to the force and repression with which that State must keep under thumb and shackle the individuals who earn the wealth that is taxed and taken from them.
February 5th, 2010 at 12:12 pm
Noam Chomsky (according to Wiki) describes himself as a libertarian socialist – a bit of both Mark and moNa.
I think his perspective is that libertarian ideals can incorporate humanitarianism.
February 5th, 2010 at 12:15 pm
@Mark
I accept your (Hayek’s) analysis, and many other analyses.
As a younger person I read lots of analyses (forgotten most of it).
One word always stood out:
PRAXIS (many variations)
wiki
“Praxis is the process by which a theory, lesson, or skill is enacted or practiced. It is a practical and applied knowledge to one’s actions”
It is this word that eludes and continues to elude.
The next two paragraphs of the Chomsky quote are ‘practical’. Not ideal maybe, but practical.
I do not subscribe to ’socialism’, ‘laissez-faire liberalism’ or any other ism (though I guess blogging is a form of onanism). These are analyses for the most part. Rarely systems. I am especially wary of messianism.
We are a tiny country… tons of resources, ridiculously isolated. We need a unified, simply understood, well communicated, practical recognition of our own problems. And or own agreed practical solution and timetable, without ideology, and maybe (truly dodgy) we need consensus.
Whilst hideously aware of the risks, I think we actually want and need ‘leadership’. Partnership seems to elude us.
Walter Kunz says what we need much better, poetically, than me, but he hails from a ‘civilised’ past, and wants partnership.
Lets hope the current politicians haven’t had their hands too tightly tied by history, and their current paymasters, and see what happens. It does have to start happening…..
I’ve acknowledged before how trite this all sounds, but at least it is away from the ongoing property/affordability cock-fight – a brilliant example of the narrow minded mess that we are in.
Was that ok RT?
February 5th, 2010 at 12:17 pm
Libertarian socialist is a complete oxymoron. Chomsky is just a socialist.
Libertarianism is interchangeable with classical liberal, in my mind, one of the bases of which is humanism. All of this foundered on one person: the individual and his/her freedoms.
That’s all the opposite of that collectivism called socialism.
February 5th, 2010 at 12:56 pm
Just a quote, Mark, just a quote, not a belief system.
Look again and see that most of that was me dribbling – I did not quote Chomsky in the last post.
February 5th, 2010 at 1:13 pm
“Recall the days when television detector vans scoured the neighbourhoods . Trying to locate signals from houses where no TV licence had been paid . That was not so long ago , just 3 decades ……………. And it was right here in egaltarian Godzone , in Kiwi-land .
Not a gigantic leap to step back into the totalitarian days of Muldoon . Kaiser Clark had us well onto that path . Another 3 years of her ………… Scarey thought !”
I remember when the prepaid pension ideas of Norm Kirk were portrayed by National’s dancing cossacks as communist. Imagine that, how communist to prepay your pension, why not just steal it off the current taxpaying generation.
February 5th, 2010 at 1:35 pm
@Andy M
Many pension schemes do not have ‘funds’ (UK national insurance). They are funded by current taxpayers. Might work if a country is growing….. not when it is nibbling itself to death from the inside.
This is like cluedo by email address
February 5th, 2010 at 1:39 pm
Awful lot of hope and fear building now…lead up to the Jonkey’s blather next week. Whatever we get in the way of spin and BS from the ‘throne’ will have been put through the voter guage to check it doesn’t crimp the election prospects. Sadly, he should have made the effort 12 months ago. I suspect English has had one of those religious ‘epiphany’ moments brought on by a clout round the lughole from a farmer in Dipton in an effort to knock some bloody sense into him.
Are we to witness a pantomine where Key resigns because he promised to if the pension rules were messed with…only to be nominated as the pm by the National Caucus and elected back into the office within the hour!.
February 5th, 2010 at 1:47 pm
AWWW, Wally not you as well…
Maybe it should be tied to CPI instead of wages…….
Whaddya think Wally
Please help me Walter
February 5th, 2010 at 1:59 pm
What should be tied to the cpi…you lost me KWJ…!!!
February 5th, 2010 at 2:02 pm
sorry, the pension.
February 5th, 2010 at 2:18 pm
Ohhhh that…I was just having a good rant at the idiots. The pension is something I am looking forward to…but also I expect Key to eat his hat and bow to the bigger Elephant…there is no friggin way it can stay…the pension not the Elephant…Yessir the Man himself has boxed his way into a corner inside a box that’s sealed in a drum. He is way stuffed.
67 will be the new start age and those born after Jan1 1955 will just have to wait.
Other than that..I expect the way they fiddle the value of the payout will go on being fiddled with in much the same way by the same army of beaurocrats needed to do the fiddling.
February 5th, 2010 at 2:20 pm
Sorry KW John : Was what right ? A tadge pre-occupied just now , watching me Gummy Bear straddle options on a 2011 short call contract evaporate . Shoulda stuck with the CDO’s . Can’t bear to lose munny .
February 5th, 2010 at 3:02 pm
CNBC – Jobless Claims Still Gaining; Productivity Up 6.2 Percent
The one suggestion Don Brash left out of his raising productivity report was getting rid of staff. Unlike him to not state the obvious. Same output + fewer staff = greater productivity and profit. Machines can run 24 hours, often without human oversight, don’t have sick days or holidays or spend hours on You Tube or Trade Me. If we export more people to Australia but keep our GDP the same or rising, shouldn’t we streak ahead of those damned Aussies. Bring on higher unemployment – got to improve those statistics.
February 5th, 2010 at 3:16 pm
television license fees. Ah yes, with one pen stroke they abolished the licensing fee, and at the very same time whacked up vehicle registration by a fair amount if I remember rightly. So much easier to collect vehicle registration, or just put a $200 fine on the car parked in the street which is out of date rather than try and enforce a tv license fee.
I wait with keen anticipation to see what similar give and take we will get with JK’s chat next week.
February 5th, 2010 at 3:33 pm
Anyone have the inside running on what our great leader is going to tell us next week. I mean…has it been leaked yet…surely yes.?
February 5th, 2010 at 4:00 pm
Jonkey / Ruddy Kev / Ombana / Gordo / – : ” Fellow citizens yap yap yadda yadda I too am suffering rhubarb rhubard and feel your pain yap yap yap as we raise taxes to put off rhubarb rhubarb and at this time these austerity measures are yadda yadda yap yap so from my chalet in the Swiss Alps yap yap gargle gargle we too have economised gurgle gurgle yap yap and only Dom Perignon from non-vintage years is served to us gurgle gurgle yadda yadda . …………….”
February 5th, 2010 at 7:01 pm
Shame about them dropping the vans and licence fees thu
I always told the children I pad the fees therefore I choose what to watch….
Then they said something in the classroom at high school about it…
Oh well worked for quite a few yrs lol.
“Anyone have the inside running on what our great leader is going to tell us next week. I mean…has it been leaked yet…surely yes.?”
Well I recon there will be quite a shake up from the silient assassin