Just when we thought the 'shock' had gone out of Orr...

Bonds / opinion

The Reserve Bank has double-pumped the Official Cash Rate with its surprise 50 basis point hike in an effort to blindside the markets. But is it now going to run out of ammo?

5th Apr 23, 2:55pm by David Hargreaves

Source: 123rf.com. Copyright: cooldesign

Okay, and here we all were thinking this one was going to be dull.

Dullness it seems is something that the Reserve Bank doesn't do under Adrian 'shock and' Orr.

What does it all mean?

Well, just about everybody expected a 25 basis point rise in the Official Cash Rate. A 50-pointer was seen as a possibility, but only a vague one.

So, the RBNZ has decided to surprise everyone. Not for the first time.

It is very clear the central bank is concerned that unless it absolutely keeps the pressure on, the financial markets would continue to engineer their own 'easing' of rates - which has been occurring over the past few weeks. And it absolutely doesn't want that.

There are some tentative signs that some of the heat is coming out of the economy and particularly the labour market. But inflationary pressures are too high.

We've now had an annual inflation rate of in and around 7% for over a year. Long time.

And such a high rate of inflation is feeding the dreaded 'inflationary expectations', these nasty things that make people increase prices (and, shock, seek higher wages) because they expect everything to go up. So inflation becomes self perpetuating.

The RBNZ is doing its darndest to kill these inflationary expectations stone dead now. I still have my doubts it will succeed, but my goodness it is trying.

So, anyway, to go back to the possibility that wholesale interest rates may continue to ease (and OF COURSE they shot up again on Wednesday after the OCR shock - but how long will the rises last for?), the concern for the RBNZ is that mortgage interest rates may start to ease. The RBNZ absolutely does not want that.

So, it has given the markets a proverbial kick in the whatsits and wants to keep the pressure on.

Again there has been a plea from the RBNZ for the banks to come to the party with higher deposit rates.

The central bank tried that strenuously after the February OCR review without any real joy at all and, personally I'm not sure how much joy it is going to get this time either.

I can see the logic though. If it can somehow squeeze the banks into higher deposit rates that will have an impact on the banks' funding costs - and therefore not leave them as much leeway for potential mortgage rate reductions. A cunning plan.

But will the banks fall into line? Look I doubt it. We may see some upward tweaks in shorter deposit rates but I would be surprised if we were to see three-year and beyond rates exceeding say 6%. Nice for the savers if it happens though.

The OCR is now at 5.25%. That's the level that the majority of economists reckoned before Wednesday's announcement would be the peak. The RBNZ's standing forecast (from February) is for a peak of 5.5%.

Interestingly, while it has doubled up with the increase to the OCR at this review, the RBNZ has definitely backed off on the language in terms of future movements. Previous statements during this 'hiking cycle' have given clear signals of further rises ahead - this one does not. The language is very open-ended.

So, in other words the RBNZ has given us the 50 points of OCR hikes that the market expected to get between Wednesday's review and the following review in May NOW instead.

Wednesday's OCR hike could therefore yet be the last, although I imagine the economists will mostly now bet on there being another 25 point rise in May, which would give the RBNZ its forecast 5.5% peak.

Much will now depend on what the lasting reaction is to the latest hike.

I think the emerging situation, however, is that the RBNZ could soon run out of road in terms of how high realistically it might want to raise the OCR. I’ve always felt that prevailing mortgage rates across the board the ‘wrong’ side of 7% for any length of time could spell trouble. And I sense the RBNZ sees it that way too.

As I’ve said before the challenge facing the RBNZ in the near future is how effective it may be in conveying the impression that interest rates, okay, are probably not going to rise much more – but they won’t be coming down either.

The financial markets will jump on it the minute they feel the RBNZ is ‘done’ with hikes and will start to price in falls to the OCR, yes, probably in the second half of this year. That means the ‘wholesale’ interest rates charged between the banks will start to fall, lowering their costs of funds and enabling them to reduce mortgage rates.

This would all be too soon for the RBNZ - and that is the battle it is going to have to fight, because while, no, it doesn’t want mortgage rates to go too high, it doesn’t want them to start falling from current levels any time soon either.

And bear in mind that the banks, who have been gorging themselves on new mortgage business till not so long ago are facing relative starvation in that area of business at the moment. The $6.6 billion worth of new mortgages advanced in this country in the first two months of the year is less than half the nearly $14 billion worth advanced in the same two months in 2021 when the housing market was ablaze.

Getting new business in the door must be a challenge for banks accustomed to customers just flocking in and for sure as the OCR settles at a plateau the banks will be sniping around with all sorts of tricks to get the punters. Which means the potential for mortgage wars and unwanted (by the RBNZ) mortgage interest rate reductions.

So, the ‘easy’ part for the RBNZ in terms of rapid OCR rises is nearly finished. It now has to convince everybody it is serious about keeping those rates high enough for long enough to choke inflation.

It could be tough. The path for the RBNZ will be a much less rugged one if inflation does start to materially abate. The April 20 release of the March quarter Consumers Price Index inflation figures looms large as a very important one.

The RBNZ is grimly determined it will get inflation and its ugly sibling inflationary expectations under control.

But, let’s face it, there’s plenty that could still go wrong.

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115 Comments

by Harvey W | 5th Apr 23, 3:06pm 1680664017

They're idiots. Can't they see they've already pulled the plug on the economy?

by powerdownkiwi | 5th Apr 23, 3:26pm 1680665172

Wrong assumption; therefore flawed comment.

The physical planet has pulled the plug on economic growth. Arguably, it started to do so about 1970. Increasingly, they had to commandeer the Commons; increasingly they had to displace 'others'. Those 'others' now include what - since WW2 - we called the Middle Class. No longer.

Continuing that, Reagan had to unwind regulations, Clinton had to unwind Glass-Steagall, the finance 'industry' (now THERE'S misnomer) had to resort to chicanery. The so-called toolbox is empty, and they're pushing on a piece of limp spaghetti; don't blame them. They - and anyone who though unfettered growth went forever - are now looking historical. Dinosaurs.

Let me put that plainly; there was no economy to wreck, it was already eating away its own support host and was near-term doomed anyway. .

by rastus1 | 5th Apr 23, 3:46pm 1680666418

You have a way of explaining things that (unfortunately) I find irrefutable.

by powerdownkiwi | 5th Apr 23, 3:50pm 1680666607

by sit23 | 5th Apr 23, 5:00pm 1680670819

High interest rates worked last time we had ridiculous inflation. Someone explain why they won't work this time. Don't tell me about how they inconvenience people and send people broke. Tell me how they don't fix inflation.

by powerdownkiwi | 5th Apr 23, 5:13pm 1680671620

I just did.

You weren't listening...

by Mr Pink | 5th Apr 23, 7:29pm 1680679782

It wont work this time is because the government has too much debt its at 150 Billion back in the late 70s early 80 the high interest rates were on a lower debt level

by powerdownkiwi | 5th Apr 23, 8:52pm 1680684767

Back the in 70s, there was still enough unburned fossil energy, and enough good quality NNRs, and there were 4 billion of us, consuming less per head.

by ChrisOfNoFame | 6th Apr 23, 10:41am 1680734491

The high concentration of wealth in the hands of a few means they'll be largely unaffected by the OCR. Further, the high concentration of wealth in illiquid assets like houses - in the hands of the older and wealthier - means they just hold on. NZ businesses operate as a collection of oligopolies and they'll just continue to increase prices whenever they need too.

The OCR is not the effective tool it used to be.

by Yvil | 5th Apr 23, 3:19pm 1680664760

Shock and Orr..right!

by Gummy Bear Hero | 6th Apr 23, 12:24am 1680697470

Shock & Orr that the dozy incompetent plonker has been granted a 5 year extension on his $ 890 000 p.a. sinecure ...

by philthy | 12th Apr 23, 11:05am 1681254320

Dozy alright, he's only about 2 years too late, reappointed by an even more dozy government.

by K.W. | 5th Apr 23, 3:20pm 1680664846

Well, the Bank is pushing s**t uphill with the Govt handing out a 7% increase to minimum wage earners and everyone on a benefit this week, and a 10% increase to the Living Wage. Shop tills will be ringing loud!

by Mikey | 5th Apr 23, 3:35pm 1680665706

The government needs to means test super. Boomers spending benefit money on bike trips, coffees and booze not good enough when poor people are getting smashed by rent and food price increases.

by Palmtree08 | 5th Apr 23, 4:44pm 1680669898

Anyone would think that a good portion of that""boomer spending" wasn't immediately recycled through the tax system to the government and the rest supporting wages and businesses?

by pacifica | 7th Apr 23, 2:50am 1680792656

Sadly most of it is boosting offshore investment portfolios

by AndrewRiddell5886 | 5th Apr 23, 9:30pm 1680687036

Means testing is a very inefficient bureaucratic exercise. Compared to a special income tax rate for anyone receiving super, with higher rates for earning above the super level.

by Peter hardwick | 11th Apr 23, 6:59am 1681153171

The government needs an a massive change to the super, they give it away, all you need to do to receive a full pension is live here for ten years 5 years before your 55 and 5 years after your 55 my god that’s madness, you don’t even have to work here and pay taxes for that ten years, so you can claim the pension without putting a cent into the system, that’s madness , some poor old kiwi who’s worked and payed taxes all his life won’t be entitled to a cent in pension because he worked hard , saved and went without, means testing pensions would be a disgrace to those who have contributed to the welfare system and not to those who haven’t contributed anything, so many come here and claim this benefit ( because that’s what it is to those who haven’t paid in)

by HouseMouse | 5th Apr 23, 3:38pm 1680665922

I made a very rare visit to KFC for takeaways last night, the queue of cars was the longest I had ever seen, maybe 30 cars deep (and down the road)

by Hamish | 5th Apr 23, 4:00pm 1680667228

What did you treat yourself to?

by Pragmatist | 5th Apr 23, 4:57pm 1680670626

If it was anything like the last time I had KFC, a big greasy box of regret.

by sheriff_of_nothing | 5th Apr 23, 5:05pm 1680671104

It's usually terrible, but every so often, just when you're about to swear off it for life, it absolutely hits the spot.

The cycle then resets, and we chase that dragon once again.

by Korki | 5th Apr 23, 6:01pm 1680674484

Interesting that you put it down to the KFC (which it probably is).

I always assume it's me, depending on appetite, mood, what I've been eating in the days before.

I usually love it if I'm really hungry and been eating clean for the week before.

by Korki | 5th Apr 23, 6:07pm 1680674849

Discussing the really important stuff now.

by Prickle | 5th Apr 23, 9:05pm 1680685531

Not since they’ve changed the coleslaw.

by M0ralHazard | 6th Apr 23, 9:49am 1680731350

Who goes to KFC for the coleslaw?!

by HouseMouse | 5th Apr 23, 9:21pm 1680686488

Yeah exactly the first piece tasted great but by the fourth it was like…. Yuck

by Justa comment | 5th Apr 23, 7:39pm 1680680358

A recession in NZ means a 30 car queue at KFC instead of a 50 car queue..........one day we might have a real recession and have a 30 car queue for a bag of potatoes.........

by HouseMouse | 5th Apr 23, 9:23pm 1680686624

Nah I think the cheap eats will do well, even better than ever.

Part of the reason I went there was financial. $35 to feed the 3 of us rather than $50 at Hell Pizza

by mja | 6th Apr 23, 2:38am 1680705499

I remember taking the kids to the Rugby League World cup final In Brisbane late 2008. We went to all the theme parks. We only saw about 8 other families at Dreamworld. The rides were 2 hours on 2 hours off, as only half the operators were on. The kids and myself would be the only ones on a ride, then would walk around and on again. Great times, courtesy of the GFC

by JimboJones | 5th Apr 23, 9:50pm 1680688236

Dole day?

by HouseMouse | 5th Apr 23, 10:04pm 1680689092

Yeah Tuesday! And a boosted pay!

In fact there was a big family inside having like a KFC party, and no bull one of them said out loud ‘thanks government’. They were acting like idiots and cussing in front of their little kids

by fortunr | 6th Apr 23, 2:09pm 1680746958

Typical fast food outlet customers, probably spending their dole.

by hootenany | 12th Apr 23, 10:02am 1681250526

This is the reason why giving the more money in benefits will not help the poor, since it will simply go directly to the rich. I own shares in restaurant brands so 'thanks government'.

by Dale Smith | 5th Apr 23, 10:57pm 1680692257

'A very rare visit,' that's what all the people in the queue said.

by liltyke | 5th Apr 23, 5:37pm 1680673049

Low income people (including pensioners) need these increases more than anyone. If you want to feel safe in your home, dont begrudge a bit of you tax gong to the most vulnerable in society

by Mikey | 5th Apr 23, 7:19pm 1680679165

Fine if the oldies actually need it. Benefits shouldn't be given to those who don't. We shouldn't have a universal prize for reaching an arbitrary age. Especially when the RB is whinging about wasteful spending.

by Justa comment | 5th Apr 23, 7:42pm 1680680561

Yes super for nett worth over 3 million and still working in 6 figure jobs is ridiculous. This must change in the next 20 years.

by IT GUY | 5th Apr 23, 8:07pm 1680682056

I would be more interested in making a comment if I could see some data around this issue

by Juzz | 6th Apr 23, 8:25am 1680726338

I don't have data but... If you left NZ once finishing high school, getting a trade or university, and working overseas until you're 60. Then return to NZ, you'll need to work or support yourself somehow for 5 years and then you're entitled to super, regardless of how much income and assets you have. Sure if you're making money from interest, dividends, drawings, and rental returns... then sure you'll lose a bit to tax, nonetheless free money off the backs of NZers who have contributed a lot more to the economy.

by EarlyRiser | 6th Apr 23, 9:16am 1680729369

That's not correct. To qualify for NZ super you need to have spent at least 10 years in NZ after age 20, and at least 5 years in NZ after age 50. In your example, if you headed overseas in your late teens and returned to NZ aged 60, you would not get super until you turned 70 (having met the 10 years in country rule to qualify).

by Juzz | 6th Apr 23, 9:51am 1680731475

Yep my mistake, still how much contribution does the average 20-25-year-old make?

by hagris | 7th Apr 23, 2:47am 1680792443

I mean someone in that position is likely eligible for whatever pension scheme is available in the Country in which they have spent the majority of their working career in - and they would be pretty stupid not to keep themselves eligible for such schemes even if living in NZ . Double dipping - pulling down on the local NZ Pension scheme while also accepting payments from their main scheme - would likely be penalized in some fashion at tax time .

by hootenany | 12th Apr 23, 10:19am 1681251548

What if you have worked all your life in NZ paid taxes, contributed to the older generations retirement the why shouldn't you get the pension? Why should a person who lived in NZ and not worked a day in their life get one, or spent all their money on booze, holidays and hookers. Why if you choose to work and contribute to society should you be punished for it.

The issue here is not means tested pension, but the fact people who didn't contribute get money, why should NZ support someone who came here and has no money? What obligation should we have to them.

I get it, we have to support people who are poor even if it through their own stupidity (I am not saying that is everyone, or it is common I don't know) or we shouldn't be responsible for. But you shouldn't be punished for putting something aside for your retirement. As for the super wealthy perhaps we should start with a fair tax system when they are earning the money.

by JimboJones | 5th Apr 23, 9:52pm 1680688323

Yeah I loved hearing my rich aunties talking about what they should spend their winter energy handouts on.

by fortunr | 6th Apr 23, 2:06pm 1680746780

The RBNZ must keep increasing the OCR until inflation is tamed. And if the Government works against it, well this simply means that the OCR will have to go even higher.

by nktokyo | 5th Apr 23, 3:25pm 1680665147

Nobody will build a house for 3 years.

by GV 27 | 5th Apr 23, 3:28pm 1680665297

And then when you need builders, they'll have all upped sticks and moved overseas. So then we'll have expensive labour and expensive supplies.

by Shaft | 5th Apr 23, 3:36pm 1680665767

Nopel the reverse as per post GFC.? They wiĺl drop their gruts to get some work.

by lostinawoods | 5th Apr 23, 3:49pm 1680666560

They'll move where? To Oz, that won't be building houses either?

by K.W. | 5th Apr 23, 6:22pm 1680675735

Got all the Brisbane Oympic venues and athletes housing to build in the next 8 years.

by HouseMouse | 5th Apr 23, 9:27pm 1680686820

Work in the mines?

by Juzz | 6th Apr 23, 8:27am 1680726442

Undergound houses?

by nigelh | 5th Apr 23, 4:57pm 1680670637

A commentator mentioned the other day that those builders and other trades in large cities will all be off to the NZ cyclone damaged areas, as new construction in the large cities is grinding to a halt. Of course those married and settled in the large cities will up and off for a few weeks at a time, find accommodation and send home their earnings. A bit like internal migrant labour. It's possible but I doubt it.

by HGWR | 5th Apr 23, 5:19pm 1680671962

We have a pretty large infrastructure deficit that could provide an obvious place to reroute that labour to. But only if councils and government have the initiative to recognise the opportunity...

by HouseMouse | 5th Apr 23, 9:26pm 1680686769

Residential construction is goneburger.

Could be plenty of recent work visas who have arrived in the last 1-2 years returning home….

by rastus1 | 5th Apr 23, 3:27pm 1680665268

Meanwhile......look at the Gold price.

Maybe it might save one of my gold mining dogs.

by nigelh | 5th Apr 23, 4:59pm 1680670794

Don't the Greens want to close down Waihi gold mine?

by Pragmatist | 5th Apr 23, 7:58pm 1680681535

Uses big dirty equipment and employs men that use robust language, and that I'm guessing aren't worried about your pro-nouns..

Can't imagine the greens wanting to shut that down 😂

by Pragmatist | 5th Apr 23, 8:55pm 1680684915

by bw | 5th Apr 23, 3:35pm 1680665738

Higher deposit rates also suck liquidity from the Private Balance Sheet.

Anyone whose had to endure ~1% deposit rates for years now will likely leap at, say, 7% for a year. And that stops them spending that amount of cash for that time = less upward pressure on retail prices.

by GV 27 | 5th Apr 23, 3:41pm 1680666099

I don't think the people who could cause that kind of measurable swing were probably out there spending fast and loose anyway.

Conversely the people who spend the most are the ones who generally shouldn't or can't afford to. That works as long as they have jobs. And then when they don't, they stop, and the places that need them spending money start cutting jobs too. Death spiral.

I think we're about to find out just how reliant our economy is on people spending more than they earn. It's not going to be pretty.

by Beanie | 5th Apr 23, 5:39pm 1680673194

NZ Inc spends $1.33 overseas for every $1 it earns. You are right, it ain't gonna be pretty.

by Palmtree08 | 5th Apr 23, 8:46pm 1680684388

interesting stat to quote back to vegans wanting to shut down animal ag.

by E46 | 5th Apr 23, 9:38pm 1680687499

🫠

by fortunr | 6th Apr 23, 2:26pm 1680747983

Not pretty indeed, but necessary if we want to have a sustainable economy. Some level of debt is healthy, but excessive levels of debt built on unrealistic asset prices is s recipe for disaster.

by hootenany | 12th Apr 23, 10:36am 1681252604

Agreed not pretty, but has to happen and the sooner the better. The reason its not pretty is it has gone on for so long.

by FCM | 5th Apr 23, 3:35pm 1680665737

Orr is doing Nationals job for them. Just sit tight and watch the people suffer (well those with big mortgages), but also those retailers, SME's etc that rely on cash flowing through the economy, and Labour will pay the price come October. As I predicted full financial pain by October and the sheeples will be out for blood. Of course Grant won't like that he gave Orr a new five year contract.

by bw | 5th Apr 23, 3:37pm 1680665878

If National gets back in, what do you think they will be able to do (Yes. Adrian has a good time left to go)? Any reverse of current setting will inflame the RBNZ and if we think 5.25% is high now, we ain't seen nothin' yet.

by powerdownkiwi | 5th Apr 23, 3:49pm 1680666540

You can't eliminate scarcity-driven inflation, using interest-rates. You might damp out the discretionary activity, but necessities? No.

There were also heroic assumptions made about a future capable of supporting growing retirement-expectations, made by all Parties, reflecting all of us.

Better we discuss what token-trading system we replace fiat-issued debt with - before events overtake us. I suggest a joule-related token, and a no-compound-interest regime - as other cultures have stipulated, particularly those living in resource-scarce places.

by Kate | 5th Apr 23, 8:00pm 1680681635

A CBDJT.

Bit of a tongue twister but we'd get used to it :-).

by Contrarian | 5th Apr 23, 3:58pm 1680667132

By continuing to Engineer Recession, Orr/RBNZ are giving many a huge dose of Depression.

by HW2 | 5th Apr 23, 4:02pm 1680667378

Keep it going Mr Orr.

You are well loved for it in the halls of parliament, the blue halls. You're determining the election outcome

by Yvil | 5th Apr 23, 4:09pm 1680667742

by Squishy | 5th Apr 23, 4:20pm 1680668427

I've tended to side with the idea of more rate rises and faster but, as long as CPI shows a YoY decline, I would be amenable to seeing an RBNZ pause on rates. Key to this scenario however is that commodity prices remain at current levels and the Kiwi not devaluing because if we start to import inflation again we will need to react.

Basically I think it's reasonable to expect inflation to abate within two years with rates as-is and all other factors remaining stable.

by HW2 | 5th Apr 23, 4:32pm 1680669175

This reaction by Orr is like the Chinese response to Covid, aiming for zero covid and going nuts and overboard to achieve something impossible

Those years of 0-2 are gone imo for normal BAU. Now chasing a dream

All CBs will be destroying their economies until they develop a new strategy

by Squishy | 5th Apr 23, 5:29pm 1680672540

When inflation was naturally declining we didn't care about creating an asset bubble, now inflation is naturally rising we aren't likely to care about deflating assets. We can't have it both ways.

by Averageman | 5th Apr 23, 7:35pm 1680680148

Not at all. By the noise from the speculative I'd say it's rounds on target. Fire for effect.....

by fortunr | 6th Apr 23, 2:23pm 1680747835

The dream being chased was that of endlessly rising house prices to ridiculous heights regardless of economic reality, and of parasitic passive income deriving not from useful activities in the real economy, but from speculative acivity in a gigantic property Ponzi . a dream that economic reality is finally bringing to an end.

by Chris-M | 6th Apr 23, 8:36am 1680726985

The popular psychology (particularly on this page) seems to be that these high rates will soon be reversed and we can go back to our low interest rate backed economic splurge and endless house price rises.

1 I think that that is the mind set that needs to be beaten out of us and if he has any sense (which he is finally showing) he will keep it up until there is no hope that this will reoccur. If he eases up now everything will quickly unwind and nothing will have been achieved.

2 OCR rates well north of 5% used to be normal prior to 2009 (incoming National Govt and GFC) Isn't all this very cheep liquidity one of the factors that got us into our current mess. On an historical basis, significantly higher interest rates would not be abnormal and required to drive a stake through the heart of inflation and capital et speculation.

by ChrisOfNoFame | 6th Apr 23, 10:50am 1680735036

Meanwhile ... for the last 50+ years the global trend has been for continuously falling interest rates. My expectation is that as boomers sell up and die off this trend will continue for quite some time.

by powerdownkiwi | 6th Apr 23, 11:37am 1680737831

Not because of that, though.

Because there's ever-less energy efficiencies being implemented (productivity has stagnated, and energy efficiencies are what productivity is) and ever-less real new stuff to trade (less real growth - which in turn is what supported interest-charging.

Some sand-rich but resource-restricted cultures stipulate no usury, for that very reason.

by kiwi_overseas | 5th Apr 23, 4:42pm 1680669754

ABSURD.

RBNZ let interest rates go too low and provided excess liquidity and now they are cranking interest rates too high as they stuffed up.

Also by removing all house prices, (we only have rent and new build costs now) from the CPI, interest rates swung too low and will now swing too high. housing is the biggest consumer good.

And they loosened the LVR restrictions.

People will lose their jobs and mortgages won’t get paid due to the RBNZ incompetence.

They need to be sacked.

by powerdownkiwi | 5th Apr 23, 5:03pm 1680670985

They were doing what they were asked, by those we asked to ask them.

The problem is that the whole system needed 'growth' and couldn't have it any longer, physically.

So it (we) upped the 'value' of existing items - in the case of housing, often non-productive ones (just people's homes). That kept us able to buy cheap shyte from poorer folk overseas - but it was just a bubble; you can't live off bubbles indefinitely. Blame society. Blame all those who reveled in their higher 'valuations'.

But it is going to bite a lot of bums.

by RickStrauss | 6th Apr 23, 7:30am 1680723033

Yup, at the end of the day this was caused by entitled folk living beyond their means by foisting ever larger debt on following generations, rather than adding value.

by Sam Hill | 5th Apr 23, 5:01pm 1680670872

We would've seen an OCR peaking at around 4% if Orr had just lifted interest rates at the first sign of borders closing and lockdowns.

If he had any honour he would resign. National and ACT should announce they will sack him if they win the election.

by Cur8or | 5th Apr 23, 6:33pm 1680676438

The RBNZ is independent and thus he can't be fired.

by GV 27 | 6th Apr 23, 7:33am 1680723220

He serves at the pleasure of the Finance Minister. Once can only assume that the Finance Minister was happy with this performance as he approved his reappointment at vastly increased pay.

by ChrisOfNoFame | 6th Apr 23, 10:55am 1680735328

Grant Robertson: "Look Adrian, we need rates coming down by September. Can you do that?"

Adrian Orr: "Um.... Well ... Er ... "

Grant Robertson: "Good. Make it so."

September ....

Grant Robertson: "I have asked for Adrian Orr's resignation and he has supplied it."

by Solid_Granite | 6th Apr 23, 6:52am 1680720754

Lol if they lifted interest rates when covid hit everyone would be out for blood, just as you are now.

by nigelh | 5th Apr 23, 5:09pm 1680671393

A commentator said recently he was aware of a cafe and two clothing shops that closed recently. To me this is a non issue. There are sufficient hospitality businesses to take up the slack. Those laid off including the owners can seek employment in the remaining hospitality industry who within the last year were screaming about lack of staff. As for small clothing shops, the number in malls far exceed what is required. These, mostly specialty clothing shops are fine in the good times but are not really needed, and definitely not when times turn tough.

by K.W. | 5th Apr 23, 6:29pm 1680676192

Notice on the window of a local chicken takeaway shop - reduced hours due to lack of staff. Meanwhile, hundreds of thousands of people sit collecting benefits. Cant be that hard to flip chicken burgers.

by powerdownkiwi | 5th Apr 23, 6:34pm 1680676451

You just wing it

by Frank Sobotka | 5th Apr 23, 8:24pm 1680683073

Who’s gonna look after their kids when they are out working? They can’t afford childcare and when you’re living in a car/emergency hotel you’re unlikely to be able to hold down a job

by RickStrauss | 6th Apr 23, 7:31am 1680723102

Work has been so well devalued and wealth transferred to assets, it's no surprise we're suffering shortages of folk willing to work unattractive jobs for peanuts.

by HouseMouse | 5th Apr 23, 9:31pm 1680687084

It was a little anecdote from one person. It’s probably being multiplied as we speak.

There’s plenty of SMEs out there that are really starting to hurt.

by kiwikidsnz | 5th Apr 23, 10:07pm 1680689264

Another anecdote for considering. I went out into Wellington CBD for dinner this evening (mid week Wednesday) with 3 old friends who were in town. Chow is basic Asian menu & has been around for quite a while & I think seats nearly 200. We arrived early bird at 530 with a handful of people present, by 7.30 when we left the whole place was packed tight with almost all a much younger age +/- 20s group, overweighted to female groups, many of whom were taken full advantage of the 2 for 1 cocktail menu.

Our own table bill was $50 ea. Including 1 beer ea.

I can remember when noone in Wgtn even bothered to open for dining on a mid week night.

by HouseMouse | 5th Apr 23, 10:45pm 1680691503

Well still stackloads of overpaid bureaucrats in the capital. For now.

Also, how busy is it on the nights they don’t have the 2 for 1 cocktail deal?

by phalanax | 5th Apr 23, 5:46pm 1680673589

Pass the salt mate...lol I dont see the labour pool increase , I dont see the increase in productivity. I see higher costs being offset yet again and the min wage hike gone with a tank full of petrol. Im not buying the soft sell ' all is on the up' reports... a trip to the supermarket further reminds me all is not as it should be. I will be doing more overtime to keep the V8 running . If it all comes crashing down it wont be my fault....lol

by ChrisOfNoFame | 6th Apr 23, 10:58am 1680735526

I dont see the labour pool increase

So you don't know any builders or tradies then?

by rolande | 5th Apr 23, 7:24pm 1680679475

It is about inflation.

But also, the Reserve Bank has about ONE somewhat effective tool at dealing with recessions and that's the OCR.

I think they are desperately trying to reload this one tool so they then have something to use when the next big recession hits.

Yes, it's perverse, because in reloading the tool they are causing a locally induced recession, but that's small beer compared to a possible worldwide depression that we all side stepped in 2008.

by Palmtree08 | 5th Apr 23, 8:54pm 1680684894

Spot on. Definitely one motivating factor.

by Contrarian | 5th Apr 23, 9:08pm 1680685696

National winning the Election, for sure. Orr is helping it heaps. Push the Economy into recession, change of government is inevitable. On top of that, this too.

https://www.oneroof.co.nz/news/43353

by OldSkoolEconomics | 5th Apr 23, 10:28pm 1680690500

National has nothing in its tank but a bunch of crap populist policies that belong in the 1980s.

Sadly they are about to lose an unloseBle election.

It not enough to hope the labour loses. They have to try to win.

by hootenany | 12th Apr 23, 10:57am 1681253837

So what, I personally have never voted for a party because they have some great ideas, its just that they are not quite as bad as the other major party.

by WGTNobserver | 5th Apr 23, 11:07pm 1680692829

People will have to starve to death before Orr's policy has any real effect.. the guy needs to go.

by waymad | 6th Apr 23, 7:22am 1680722545

But some say there are too many of us.......

by Juzz | 6th Apr 23, 9:57am 1680731841

Can you describe a scenario where anyone in NZ would starve without choosing to?

by pacifica | 7th Apr 23, 3:32am 1680795175

Most people who stave do so without choosing to. Especially those who are medically staved (lack of basic medical treatment leads to no ability to ingest and retain enough nutrients, e.g. many with treatable disease and illnesses are known to die in their 20s due to lack of treatments with limited surgical numbers, the same happens for many other conditions where lack of medical treatment leads to no ability to ingest and process nutrients even with botched in feeding tubes),

those who are staved by lack of care and neglect (see those who are vulnerable mostly young disabled people and a few elderly who are denied food prep and food by NZ "health" care agencies so many have died),

those who suffer severe malnutrition from poverty leading to organ failure and other medical issues that then go on to be not provided basic medical treatment by our health system etc etc etc.

Essentially we have many sectors of society who are the most vulnerable starving and yet we give the most benefits to those already rich and receiving the highest rate of income in NZ. Go figure. For every person starved to death there is multiple generations of family who are devastated and crushed so NZ experiences a further loss in productivity.

Fun fact if you are disabled your death is most of the time put down to being "natural" with no known cause due to a lack of interest in providing a coroners report for disabled people. Even if severe medical malpractice and neglect is involved it takes the family fighting the medical system and HDC, sometimes even through court to actually have it recognized as even worthy of an apology akin to 'oops your family member died, sorry'. Even in cases where the family member was denied access to food 24/7 for weeks on end.

by pacifica | 7th Apr 23, 3:34am 1680795291

Example: 23-year-old Whangarei woman left to starve to death without any pain relief

https://www.nzherald.co.nz/nz/23-year-old-whangarei-woman-ruby-hill-lef…

https://www.newshub.co.nz/home/new-zealand/2019/01/whangarei-woman-with…

Note this condition is entirely treatable for a low cost, (sometimes a single medication can help), to the health service in comparison to not treating it and letting the person become even more irreparably disabled until they die. Many with the condition have medications they could be taking or surgery (but most are unfunded by NZ and most NZ doctors and hospitals are not equipped to treat people with more chronic illnesses, we cannot even do cancer surgeries at highest priority in time for survival these days) or many other means of support available in Aus, US, UK, Asia, Europe, Mexico etc.

This person had their family leave work commitments to become carers and they themselves could not work nor study. NZ lost many people due to starvation instead of treating an entirely treatable diseases or basic medical care of food support to those disabled and in poverty.

The deaths by starvation due to poverty are equally tragic and preventable.

Fun fact if you are disabled your death is most of the time put down to being "natural" with no known cause due to a lack of interest in providing a coroners report for disabled people.

Even if severe medical malpractice and neglect is involved it takes the family fighting the medical system and HDC, sometimes even through court to actually have it recognized as even worthy of an apology akin to 'oops your family member died, sorry'. Even in cases where the family member was denied access to food 24/7 for weeks on end.

by ChrisOfNoFame | 6th Apr 23, 10:37am 1680734220

The social cost will be far too high going any much further than 5.5%.

We need more good quality houses. But at and OCR of 5.5% building houses is a mugs game unless you have the money to finance all the build yourself ... and you can wear the risk of selling it a price even below today's. The construction industry employs a huge number of people, both directly and indirectly.

by K.W. | 6th Apr 23, 10:51am 1680735067

Saw a post on FB that someone had gotten a quote for building a basic house - $7000 per sqm. For a 130 sqm build that was $910k not including the land.

by Pragmatist | 6th Apr 23, 1:07pm 1680743245

That was on here a few days ago.

by Sam B | 6th Apr 23, 2:49pm 1680749393

That’s why land prices have to come down.

by powerdownkiwi | 6th Apr 23, 5:42pm 1680759745

You can reduce land prices by reducing population.

If there were 2 million Kiwis, we'd be able to triage the flood-plains, triage the erodable, triage the soon-to-be-underwater, triage the old/decrepit - and still have choice....