Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
Late yesterday BNZ largely followed ANZ with their own increases to some fixed mortgage rates - and a decrease. And the Cooperative Bank raised their fixed rates by about +10 bps.
TERM DEPOSIT RATE CHANGES
None here today.
GOVT DEFICITS LINGER
The Crown accounts are out for the six months to December 2022 and they show an -$8 bln deficit for the period, down from the forecast -$10.9 bln on an OBEGAL basis. The full accounting deficit for the period is -$13.3 bln vs the expected -$15.9 bln in the HYEFU. Net debt as a percent of GDP is stable at 36.8%.
TAX TAKE UP SHARPLY
Deep within those Crown accounts is data that shows the fast rise in the tax take from individuals is continuing (Note 2 in the Accounts). For the year to December it is up more than +15% compared to the same year to December 2020. In fact the pace is quickening. December 2021 alone was up more than +18% over December 2020 to hit a new all-time monthly record of +$4.8 bln. Normally the top month in the year is a March, but not in 2021. And the tax take from companies has recovered sharply as well. Despite the fast rise in the tax take, there is no surplus, because Government spending continues at a fast pace too.
UNSUSTAINABLE DEMOGRAPHIC TWIST
The population grew by just +4600 in the period from September to December to reach 5,127,200. That is the slowest quarterly growth since September 2012. Worse, we are ageing fast. The median age rose to its highest ever at 37.9 years. Our over 65 population rising faster (+24,500 in a year) and our working age population is actually shrinking now (-2,100 in a year). Closed borders are twisting our demography in a costly and ultimately unsustainable direction.
MORE BABIES REQUIRED TO FUND THE AGED
Of course, deaths are rising as the population ages, 34,932 in 2021 and the highest ever, but births remain low as the birth rate stays low. See charts here.
RISING YIELDS, WELL SUPPORTED
The latest Treasury bond tender was successful with $200 mln offered and $709 mln bid. The April 2027 $100 mln attracted 24 bids but only 2 were accepted at 2.63% pa yield, and up from 2.34% two weeks ago. The $100 mln May 2051 bond attracted 29 bids and 14 won something. The yield was 3.16% pa, up from 2.87% two weeks ago.
GDT TO SUPPORT AN EXTENDED DERIVATIVE SET
Fonterra has said it has a deal to sell one third of its share in the Global Dairy Trade platform to NZX, and another third to EEX (European Energy Exchange). The goal seems to be two-fold - bring more suppliers on to the platform, because they are reluctant when it is wholly Fonterra owned, and b) increase the ability to develop risk management options - code for adding many more derivative products to the underlying trades. This will financialise the the indexes that record the actual transactions - and that may be where the real money is made (?). The NZX also said it is raising more capital, of which $12.5 mln is for the GDT stake. That could mean Fonterra is selling down and getting $25 mln for the GDT stake.
MORE JOBS, LESS HOURS
Australia added +13,000 new jobs in January when none were expected, but it actually isn't great news. That is because is lost -17,000 full time jobs and gained +30,000 part-time jobs. Their jobless rate stayed at 4.2%. The switch to part-time jobs helps explain that hours worked fell by almost -9% between December 2021 and January 2022. Rising sick leave is also being cited. But looking past the detail, it is clear that Omicron did not really affect their labour market that much in January, overall.
RESURGENT
Japan has reported some very encouraging machinery orders in December, up +5.1% year-on-year and +3.6% of that in December alone. This data confirms the strong machine tool order data we had earlier. They need their capital goods sector to fire because imports are rising sharply (especially oil).
LOCAL PANDEMIC UPDATE
In NSW, there has been 9,995 new community cases reported yesterday, now with 109,989 (revised) active locally-acquired cases, and another 14 daily deaths. There are now 1,447 in hospital there, now well off their high. In Victoria they reported 8,501 more new infections yesterday, a little higher. There are now 50,042 active cases in that state - but there were 9 deaths there. Queensland is reporting 5,665 new cases and 39 deaths. In South Australia, new cases have risen to 1624 yesterday and 2 more deaths. The ACT has 537 new cases and one death, and Tasmania 680 new cases and no deaths. Overall in Australia, more than 27,000 new cases have been reported so far although not all counts are in yet. In New Zealand, there were 15 cases stopped at the border, plus 1573 new cases reported in the community, another new record.
GOLD BACK UP
In early Asian trading, gold is now at US$1870 and up +US$18 from this time yesterday.
EQUITIES MIXED
The S&P ended the day virtually unchanged on Wall Street after being lower for most of today's session. Tokyo has opened today down -0.4% after yesterday's big rise. Hong Kong is unchanged at its open; Shanghai is down -0.3%. The ASX200 is up +0.6% in early afternoon trade. And the NZX50 is also up +0.6% in late afternoon trade
SWAPS RETREAT
We don't have today's closing swap rates yet. They are likely to have fallen back today. The two year is back to June 2016 levels now. The 90 day bank bill rate is unchanged at 1.23%. The Australian Govt ten year benchmark bond rate is unchanged from yesterday to 2.24%. The China Govt 10yr is also unchanged at 2.81%. The New Zealand Govt 10 year bond rate is now at 2.80% (down -6 bps from this time yesterday) and now below the earlier RBNZ fix for that 10yr rate at 2.84% (down -4 bps). The US Govt ten year is now at 2.03%, and unchanged from this time yesterday.
NZ DOLLAR FIRMS
The Kiwi dollar is +½c firmer today at 66.9 USc. Against the Aussie we are uncahnged at 92.9 AUc. Against the euro we are +¼c higher at 58.5 euro cents. That means the TWI-5 is up +40 bps at 71.3.
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BITCOIN FIRMS MARGINALLY
Bitcoin is a little firmer today at US$44,053 but essentially unchanged from where we were this time yesterday. Volatility over the past 24 hours has remained modest at just on +/- 1.2%.
CONGRATS MATT HENRY
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110 Comments
As a father of adult girls with partners doing middle class jobs it is clear that for an average Kiwi having a child means a plunge into poverty. A generous universal child benefit is needed - our govt's attempt to means benefits (WFF, Accommodation supplement) makes child-bearing feasible for the really poor, the really wealthy and for those with generous elderly parents.
If school and tertiary education are a universal benefits why not pre-schoolers?
This comment keeps being made on this website despite making absolutely no sense. Like a broken, non-sensical record.
How does throwing away your own money make any difference to the many and varied problems caused by high house prices? It's nothing more than pissing into a gale force wind.
What makes you think anyone would expect otherwise? Of course if house prices fall my house value will fall too. This is absolutely fine with me, and the vast majority in the country will benefit in the long run. You built this straw man yourself.
One house sale doesn't change a market - I want change rather than martyrs.
It's mainly speculators who worry about falling house prices. Most owner occupiers need not worry, apart perhaps some who bought in the last year or so.
I couldn't really care less if my property's value fell 25-30% along with the rest of the market. It's not like I've dined out irresponsibly on the value uplift of my property over the past 2.5 years.
It would be a good thing, it would give some FHBs a bit of a chance.
They need to move to a smaller town.
Pros: cheaper housing, shorter or no commutes, nicer scenery, better place to raise kids (although less opportunity when they are older), often better money than in the cities for blue collar jobs.
Cons: lacks economies of scale of cities, less choice, less white collar jobs.
You can earn 80 grand a year driving a tractor at the moment. Put on some headphones, play podcasts, boom.
Everywhere, truck and machinery drivers are in such high demand. $35-40/hr+ extras is pretty normal now.
I drive trucks and tractors for a living and $80k is my base salary now (guaranteed minimum hours year round), plus a company fuel card for my car, and they pay for my phone.
Add overtime into the mix (any week I do over 40 hours) and it is a 6 figure job easy enough.
They have partners with Auckland jobs and one has a teenager settled at school - why does she have to move because she had a second child? The other is seriously considering moving to Christchurch where they have no family of friends and being brown skinned are looked at as aliens.
Less white collar jobs but due to the major shortage of white collar workers everywhere, they are still basically guaranteed a job wherever they want to go from what I've been seeing and hearing.
I'm in a regional city / town and on as much perhaps more than if I was working in Auckland. Property is at less than half the price than if we was living in Auckland.
A week and a half until the 1 million offshore kiwis can return home to NZ without an impossible lottery and can just home isolate instead of MIQ.
Impact on the economy & housing?
And be careful fixing your mortgage for too long - don’t want to pay break fees in 12-18 months to enjoy 3% fixed.
Might not want to come home to NZ. Everybody may be self isolating during the lockdown that isn’t a lockdown. NZ closed down. Schools are already rapidly closing. Parents not at work therefore. Inexcusable shortage of RATs for vital areas, creating shutdowns, staff absences, nationwide soon. Just waiting for the MoH to come out and blame private industry for not having the foresight to order sufficient RAT stocks for them to steal.
ps. STUFF now reporting DHB lab staff announcing strike action in March. Beyond not reaching any agreement in over 12 months negotiations on pay levels, laboratories are understaffed, hours are overlong & exhausting, the work highly specialised with no margin for error with or without covid. Sounds like many others this sector has had more than enough. Do believe that is going to put a RAT amongst the chickens.
ps again. Minister Little on One News, refutes credibility of these staff. Points out the government has poured $ millions into health. Yes maybe, , but as Dr Reti pointed out, carefully & accurately in parliament, that money has been poured into the restructure, the monumental new health authority, in Wellington. Not frontline vital staff and functions such as this. All in the midst of a pandemic. Go figure.
Might not want to come home to NZ
Too true. How the PM handles the protesters will also be a factor, I believe, especially IF it does not end well. Arden's failure to address the protesters so far (even using a proxy such as a minister or a Labour party leader, or even an opposition party person) would bring this situation to a quicker end) paints her in a bad light.
Allowing it to drag on like this makes her look weak, indecisive, while dismissing it as imported makes her look out of touch, as it is clearly an organic grassroots home-grown hodge-podge of all walks of Kiwi life.
Plus it breeds more division among Kiwis with her unwillingness to address the issue giving license on one side to demonise and shut down, while galvanising the other side into a populist movement.
It started off with the whacky protesters but attention will shift to the PM instead the longer she lets it fester. In the end, it will be her actions (or inaction) that people will remember, not the occupation of the parliament lawn by a motley crew.
I think it'll simply come down to people wanting to see their families again at long last. I know I can't wait to see family again after more than 2 years. The rest of it (Jacinda, covid, protests, etc) is just background noise.
Whether they stay or not will simply come down to jobs, housing and lifestyle once the honeymoon period is over.
I think the real question is how many will leave.
The lockdown we are having when there’s no official lockdown!
https://i.stuff.co.nz/business/industries/127802157/big-companies-gover…
Universities now online, schools closing down, companies offices closed as WFH imposed on staff, anti-mandate protestors growing in Wellington & popping up in every city: chch, Picton, Dunedin etc , and people turning off their Bluetooth & COVID scanner to avoid 7 day isolations.
And no or little support for small businesses getting damaged from all this.
Hardly, as far as the government is concerned it seems. Therefore say a Business loses a third of its staff to a covid case & close contacts etc. Can’t carry on as such. But has to pay those staff full wages even after sick leave runs out. The cases become a revolving door. End of business. Gone bust.
And for two years the public service has carried on regardless of whether actually working or not on full pay. And from that lofty and comfortable position they can dictate to the lesser beings in private industry & business how they can conduct business and pay the taxes and costs to keep such fat cats content and safe in their jobs.
I turned off my Bluetooth last night and I no longer scan. Considering you are not required to do it, why would you when it means more chance of a 7 day isolation. Maybe if they hadn’t kept Auckland locked down for quite as long I would be more kind in my scanning, but we have only had one month in the last 8 or so that have not been red or worse. Also we don’t want our kids to miss more school, although it’s hard to understand why it’s fine for them to go this year with thousands of cases but not last year with 100 or so, what has changed?
This will never happen in NZ:
“With falling hospitalisations, a strong vaccination rate and more than 50% of the eligible over-16 population boosted in NSW, we're now in a position to safely ease restrictions and help families and businesses keep moving forward.”
Dom Perrottet.
I won't go to the extent of labelling her. I'm more interested in her actually doing something positive with this situation, rather than waffling and letting this drag on.
Clearly it is growing rather than fizzling out (which shows how out of touch the leadership, media and a portion of the population are), so she needs to take action (not condemnation which would lead to escalation) which will produce a positive outcome. And there are ways to achieve that, it's just that she hasn't either considered them or is unwilling to entertain them.
I'd say to her:
DO engage the protestors, if not directly then indirectly but show you are willing to have dialogue. Use one of your people or else even make use of those outside your party as a neutral party.
DON'T dismiss or condemn. Minority or not, this is still a sizable portion of the population and these ARE Kiwis. They do represent something in all of us who have been through the past two years together, no matter how we may view the protesters.
They represent a wildly varied range of issues which have been ignored for such a long time, which have come boiling to the fore concentrated in one setting - unemployment/job loss, housing affordability, cost of living, government inefficiency, poverty, class struggle, stagnant healthcare, education, social inequality, decreasing economic opportunities, and more.
Not surprising to see more DHB staff going on strike. My group has been negotiating since August last year, and have had precisely 1 offer from the DHBs which was a 0% this year and 1% next year deal. Since then we've had noise around a 1% lump sum 'sweetener' but no more formal offers.
The pay freeze simply has to go - no-one is going to settle for real term 7%+ pay cuts. It feels like the negotiating teams are just stalling until their mandate changes to something realistic. The Government are the only ones who can stop the Aussie recruiters phones from ringing...
Mortgage belt. I really like the optimism. You may or may not be for high property prices… my feeling is that you are pro. It’s seems that there will be a lot of people leaving NZ too, I’m hoping it’s not a case of swapping the young and the brilliant for the young and the not so brilliant. What will be the impact on the economy and the housing market?? Maybe not the lifeline you are hoping for. I think the ponzi is on thin ice and I can hear cracks.
It sounds like the status quo.
I'm more with conservative economist Milton Friedman, to be fair. All taxes are bad but land value tax is the least bad. Best thing we could do for NZ (for multiple generations rather than just the older and propertied ones) is raise LVT and precipitously reduce company income tax (75% of which is borne by employees in the form of lower wages). Addresses avoidance and evasion and rewards productive work.
Interesting how we always ask how things are going to affect housing or the economy, but never how things are going to affect our society, communities and way of life. The reality is they are all crumbling while people are either chasing riches or simply trying to survive. Rampant serious crime, working poor and gated housing developments for the wealthy is around the corner.
Mortgagebelt how many kiwis do you know coming back to live some will come back for visit but I think more 20 too 40 year olds will be leaving as cannot afford to buy house and have a family. A number of retired people I know have sold house and are going to Australia to be with family and see grandkid more often. And you are completely of the mark with interest rates in 12-18 months time 3% is a joke more like 7%
DT - well there’s been a lot of online commentary and self-stories of kiwis wanting to return but couldn’t due to the lottery system etc. You may be right - some may just return for an extended holiday or a year or so.
And yes I also know a few boomers heading for Aus to live to be closer to kids & grandkids - although NZ Super or Aus Pension with means testing is problematic for kiwis retiring there.
I don't buy in to this angle. They have already had ~2 years to come home and get in via lottery. Most that have wanted to, already have. And the ones on the fence have now seen enough to know NZ is a basket case, therefore reducing returnee numbers even more. It is a non event.
Lol - Just a commenter (new?). - think you have the wrong end of the stick.
I represent middle/struggle street not REAs
“The Mortgage belt is a term used in Australian (or NZ) politics to signify residential suburbs which have a high concentration of families mortgaging their homes.
Often the belt covers areas where homes could be considered more affordable yet the cost of servicing the mortgage loan represents a high proportion of the families' available income. Changes to cost of servicing a mortgage, seen through interest rate fluctuations, can trigger widespread satisfaction or dissatisfaction towards the government of the day”
Gotta disagree with Mr Chaston.
Stable population is a great thing. The population explosion of the last ten years has been the disaster.
The older demographic is no great problem either.
Anybody noticed how Auckland is harder to get around than it used to be. And how they have no hope of paying for any of the solutions, poor as those are.
Stable population is a great thing. The population explosion of the last ten years has been the disaster.
In the case of NZ, immigration has been driving GDP, even if GDP per capita is not increasing at a great rate (if at all).
Now look at Japan. Population been in serious decline, but GDP per capita has been growing steadily.
Who's in the better position: NZ or Japan?
It astounds me that how inefficient and poorly-run infrastructure projects are in NZ. Having spent some time in Singapore, I can tell you that heads would have rolled if some of the budget blow-outs and delays that NZ projects have suffered would have occurred in that country.
It's as if NZ is having first world dreams and third world project planning...
https://www.nzherald.co.nz/nz/northern-corridor-motorway-upgrades-appro…
This, the Northern Corridor motorway upgrade, or perhaps more easily understood as the Constellation Drive Interchange – was given the green light late 2017 and is still work in progress.
I imagine it will be completed one day – I fear however that with the passage of time I may not be around to see it.
"Grumble grumble we paid taxes all our lives therefore we're entitled to non-means tested welfare, we can double dip by working past 65 yet still claim welfare".
A cruel irony given the super is funded by today's younger taxpayers who I imagine would like to advance their careers if only people would actually retire.
Thanks to Labour and National, buying a simple house and starting a family are no longer personal choices, but luxuries reserved for the wealthy.
I feel bad for those who recently moved from other parts of the world with the false dream of high living standards in a social market utopia.
There's a lot of poor leadership on display currently. At parliament, on the inside especially. Stories of people needing testing & being abused. Our health system is at breaking point. Big project management falling behind with huge cost blowouts. The one's in Tauranga have tripled in cost & still we wait - usually in queues on the roads. The state is now costing us more than a dollar to run for every two we earn. Soon it will be 50/50. Why have we become so dumb?
With over 90% of people double jabbed time to stop mandates and vax passports waste of time omicron will not be stopped it’s here. This government needs people to get back to work in hospitals, nurses,doctors,medics testing is a joke this virus is going to be everywhere soon people will be in hospitals which from what I understand are run down not enough beds but rather than giving money to this area they gave money to business supporting there friends and pushing up house prices. Hopefully this government and parliament will find themselves in court the people will get to see any misdeeds of government or abuse of power
Labour have had 2 years to strengthen the hospitals but they have done SFA. Plan A was to keep Covid out forever and they had no Plan B and now we are screwed. Labour is facing the perfect storm heading into the next election, just watch support for them drop to 20% and JA will quit.
Only one data suggesting that house price growth has stalled and government goes into panic mode and are ready to tweak to support the ponzi.
https://www.nzherald.co.nz/business/david-clark-govt-will-move-fast-on-…
When week by week, month by month....year by year data was suggesting that housing ponzi is touching new height with every data...government and RBNZ approach was wait and watch unlike today.
Need say more !
The "we must have population growth" is getting really old and boring as a meme. Unless we keep increasing the population beyond standing room only, we have to deal with this "problem" at some point, by ceasing to grow the population? Why not do it before quality of life is destroyed, along with our biosphere? In case anyone hasn't noticed, energy available to global citizens is now in decline. Growing population with declining energy resources, is beyond stupid!
Our over 65 population rising faster (+24,500 in a year) and our working age population is actually shrinking now (-2,100 in a year). Closed borders are twisting our demography in a costly and ultimately unsustainable direction.
Almost every country in the OECD has the same issue. More widely if you think about the places New Zealand imports workers from Chinas population is aging and declining, Indias is only just above replacement rate but falling rapidly and the UK isn't doing any better than New Zealand. What's apparent to me is that the over-reliance on imported labour isn't sustainable either, it's a quick fix for a long term issue.
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