Breakfast briefing; Benchmark interest rates rise worldwide

Business / news

US data mixed but Beige Book confirms expansion; CPI data from Canada, EU and UK all high; lithium price in new surge; UST 10yr 4.11%; gold down and oil up; NZ$1 = 56.6 USc; TWI-5 = 67.5

20th Oct 22, 7:19am by David Chaston

Here's our summary of key economic events overnight affecting New Zealand, with news the global bond rout is gathering pace.

The US 10-year Treasury yield, the benchmark for borrowing costs worldwide, has risen to 4.11%, the highest since October 2008, with investors fretting about the prospects of a recession from aggressive central bank actions to tame inflation. Minneapolis Fed President Neel Kashkari was the latest policymaker to warn that the American central bank might need to lift its policy rate above 4.75% if underlying inflation continues to accelerate.

In the US, the widely-watched Beige Book review of the US economy by the Federal Reserve regional members paints a picture of a "modestly expanding" economy, with some wide regional variations. Retail activity is flat they noted, but factory activity is expanding. Employment continued to rise at a modest to moderate pace they noted, and although price growth remained elevated, some easing is showing up in a number of regions.

American new housing starts came in lower in September than for August, but remained at around the 1.5 mln annual rate level they have been since April. Residential building consents rose slightly, and completions remained stable as they have for the past five years.

US mortgage applications however dipped yet again last week, extending the long string of declines that basically stretch back to the start of 2021 with only occasional gains. But what is rising relentlessly are their mortgage interest rates, now up to 6.94% plus points. American residential housing has lost its 'investment' status. It is back to fulfilling its primary function of just being 'shelter'.

Long term capital flows into the US are strong, according to the authoritative UST TIC data. These flows in hit their second highest net inflow levels in the history of this data, almost +US$200 bln in the single month, and only beaten by the March 2021 data.

Today's UST 20yr bond tender was a well-supported event for the US$12 bln on offer despite no Fed involvement. The median yield was 4.32% today, up a sharp +57 bps from the 3.75% at the prior equivalent event a month ago.

Canada's September CPI inflation rate came in at 6.9%, and sticking close to the 7% level recorded for August. But it is down from the recent peak of 8.1% recorded in June. Their producer prices are rising faster at +9.0% in the year to September although this is lower than the August +10.2% rise. Raw material prices are falling quite quickly there now and that will increasingly flow through to future PPI results.

China data and economic news is still locked-up so as not to distract from the Party's big meetings. Investors in Hong Kong and Shanghai don't seem impressed however - not that Beijing really cares.

The overall EU inflation rate for September was released overnight coming in at +10.9% with the frontline states facing Russia being hit the hardest, and France, Spain and Italy keeping the overall rate restrained.

The UK also reported its September inflation rates and it was sticky at +10.1%.

Adding to global inflation pressure, we should note that the price of lithium is rising again, even if other non-precious metals slip away.

The UST 10yr yield starts today sharply higher at 4.11%, up +9 bps from this time yesterday. The UST 2-10 rate curve is little-changed at -42 bps. And their 1-5 curve is also little-changed at -24 bps. But their 30 day-10yr curve is steeper at +94 bps. The Australian ten year bond is up +2 bps at 3.99%. The China Govt ten year bond is unchanged at 2.72%. However, the New Zealand Govt ten year will start today at 4.71% and up +15 bps in a strong echo from the CPI data.

Wall Street is heading lower today with the S&P500 down -0.8%. Overnight, European markets fell about -0.3% on average. Yesterday, Tokyo ended up another +0.4%, but the two big PRC markets sagged badly. Hong Kong was down -2.4%, and Shanghai dropped -1.2%. The ASX200 ended its Wednesday session up +0.3% and the NZX50 was up another +0.6%.

The price of gold will open today at US$1630/oz. This is down -US$20 from this time yesterday.

And oil prices start today up +US$1.50 from this time yesterday at just over US$83.50/bbl in the US while the international Brent price is just on US$90.50/bbl.

The Kiwi dollar will open today at 56.6 USc and -20 bps softer than this time yesterday. Against the Australian dollar we are up at 90.4 AUc and another small rise. Against the euro we are also firm at 57.9 euro cents. That all means our TWI-5 starts today at 67.5, and marginally up from yesterday.

The bitcoin price is now at US$19,179 and down -1.3% from this time yesterday. Volatility over the past 24 hours has however been low at just +/- 0.9%.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

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126 Comments

by Carinaz | 20th Oct 22, 7:22am 1666203727

Trying to blackmail by playing sympathy card. Why were they not concerned when house prices was rising $24000 per week.

Was it not throwing a stress on FHB ????

Economy Fundamentals have taken over politicians and central banks manipulation and economy cycle will run its own course

https://www.rnz.co.nz/news/national/476991/nervous-homeowners-expect-to…

by Foxglove. | 20th Oct 22, 7:48am 1666205331

The panicky reaction to covid by crashing down the OCR is now home to roost. By that time an already historically low OCR was a spent force as a stimulus anyway. Instead of the supposed purpose of protecting the housing market it propelled investors come speculators into the market en masse with the resultant massive escalation in prices. Encouraging the folk of the nation to borrow to spend to save the economy was just pure nuts in my book and a government hell bent onprinting money on top of that was more than inflationary, it was incendiary. And here we all are now.This government has created the perfect trap out of a perfect storm that is near to rival mother nature herself.

by Fossil Lover | 20th Oct 22, 7:46am 1666205192

The USA can get away with these Keynesian policies because they have the worlds reserve currency and thus can export their inflation. NZ does not have that luxury. We fell into the central banking debt trap. Perhaps a WEF policy to control the masses through austerity? It worked with the Covid scam, now let's bring on 'Global Warming'.

by sit23 | 20th Oct 22, 10:31am 1666215094

You are living in the past. Global warming became a bit embarrassing for those who follow that particular reliigion, as they could not claim ownership of all the bits of weather that did not actually involve temperatures going up. Then it became Climate Change. That didn't work, so Climate Emergency was tried. Still no effect. Now Climate Crisis. Latest polls show that this is way down on everyone's list of problems affecting our lives, so a new word will have to be used at some stage. Maybe a change of definition will do. As was done during that Covid moneymaking scheme, I mean pandemic. The minority will have to try to take control of the majority. It was tried in the last couple of years, but failed miserably. The powers that want to be will not give up though. Great fun.

by RickStrauss | 20th Oct 22, 10:47am 1666216042

Wow, one of these out in the wild.

by murray86 | 20th Oct 22, 7:49am 1666205354

I am coming to the opinion that any move that encourages ordinary Kiwis to take on debt to spend in an unregulated market is a fundamentally flawed policy which profits only the banks.

I feel that decades of poor economic management are coming home to roost. The societal pressures are ramping increasingly rapidly and neither of the major political parties seem to understand this or have a vision on a way to move forward. Of the minor parties the Greens are too wrapped in their own ideological blinkers and don't realise their view will just make it worse, Act aligns with the National Party and it is too soon to tell about NZF but i doubt Winnie is any better. Not exactly a view to brighten our day I'm sorry.

by RickStrauss | 20th Oct 22, 10:47am 1666216078

Basically only TOP seems useful.

by Fossil Lover | 20th Oct 22, 7:39am 1666204767

Inflate or bust. I still think central bankers will inflate or perhaps a debt jubilee to stop the high-rise window jumpers.

by Hamish | 20th Oct 22, 7:49am 1666205367

Debt jubilee?

You can't think of any long term consequences of such a thing?

by bw | 20th Oct 22, 7:58am 1666205886

There won't be a long term. The Short Term consequences of a Jubilee would destroy the society we see about us today. As we all know, someone owns the debt. It doesn't just evaporate no matter whose balance sheet it is Jubileed to

The answer appears to be that the existing debt owners are going to have to take it on the chin as their collateral assets depreciate against that fixed debt. It is they who will individually have to 'work it off' over time.

What's another term for that; that we have been educated to believe is the ultimate evil? Deflation.

by Foxglove. | 20th Oct 22, 8:13am 1666206829

Some time ago a wise old Swiss business man told me that if you first climb up the wrong mountain, you must then come down off that mountain before yo can climb the right mountain. Seems to be dawning then, that there is to be a lot of large numbers coming down the mountain with much wailing and gnashing of teeth.

by powerdownkiwi | 20th Oct 22, 8:20am 1666207244

FL has some things very right, and some things very wrong - it happens when you realise the mainstream narrative is rubbish, but don't stand back enough to get perspective yourself.

Steve Keen proposed a Jubilee, a long time ago. It works like this: Everyone gets 'given' 500k. Those in debt, are 500k less in debt, or out of it. Those in the black, are still relatively ahead. And money is worth diddly-squat - but that is going to happen anyway. It's one way to land the current overshot ponzi.

But there isn't the energy going into the system now, for either a re-boot, or even probably an equitable share-around. Finite planet, too depleted already. So war(s) over 'what's left' is my pick from here on - and that's EXACTLY what Nuland was stirring up in Ukraine. Less surplus energy equals less political mandate (via less delivery of promises) hence Trump being elected, hence Truss etc; intellectually-questionable chanters of mantra being put up as leaders by a system which is playing in injury time.

by murray86 | 20th Oct 22, 8:36am 1666208166

There are some flaws in your theory PDK. For all you credit Nuland with I just don't think she was that clever. Just ideologically driven and on a power trip. Nor was Putin clever either. But here's the thing, I would suggest that Putin did realise Europe was vulnerable to Russia, due to their dependence on gas, and that he believed the world could not afford to lose the supply of Russian oil from the world markets. Because of those he felt that he could move on Ukraine as a part of his revival of Imperial Russia and Europe and NATO would do nothing. He was almost right. China's lust for Taiwan is not about energy. Indeed there is no energy gain to be had from an invasion. Just like Putin it is about power and control. Nothing more. Just base human lust.

Iran are currently undergoing a peoples revolution, so Russia's supply of weapons from there might not be a secure or reliable as he would hope. Ukraine should also be looking at how they can interdict the supply flights out of Iran too now.

by Noncents | 20th Oct 22, 8:49am 1666208961

"Ukraine should also be looking at how they can interdict the supply flights out of Iran too now. "

The US is already onto that, weapons exports is a breach of the trade restrictions imposed on Iran. It will be interesting to see how they react to it.

by Fossil Lover | 20th Oct 22, 10:25am 1666214752

Putin way smarter than western world central bankers.

by RickStrauss | 20th Oct 22, 11:01am 1666216866

Really impressive how he's gotten the usual suspects in Western social media admiring him.

by Rex Pat | 20th Oct 22, 12:07pm 1666220825

JA has the same. Mmm.

by murray86 | 20th Oct 22, 12:23pm 1666221794

I don't think so. At the core they have a different focus. But central bankers are trying to preserve a status quo that serves the rich and powerful at the expense of the people. Putin is lusting for immortality. He's gained that, but not in the way he intended. Putin has been exposed to what he really is, the Central Bankers are in the process of watching their nicely ordered world collapse and that exposure coming to them too. They should be afraid.

by Audaxes | 20th Oct 22, 8:39am 1666208396

Why do you think America is invading Haiti?????? Link

by murray86 | 20th Oct 22, 10:18am 1666214326

Isn't that because Haiti's (corrupt?) Government is at war with the gangs, one big one in particular, and doesn't have the man or firepower and has requested US Government help? It's not an invasion, superficially at least.

by The Person | 20th Oct 22, 1:31pm 1666225872

Yeah like the invasion of Afganistan was all about oil in the caspian sea.

by HeavyG | 20th Oct 22, 8:38am 1666208312

Inflation is the debt jubilee. We're just wiping debt off now over 14 years (7% CPI) rather than 50 (2% CPI).

by Fitzgerald | 20th Oct 22, 9:34am 1666211690

14 years of 7% cpi would devastate the economy.

by Hamish | 20th Oct 22, 10:26am 1666214780

Humans reckon they've figured out how to beat the natural order of things that is evolution?

by Chaosinflesh | 20th Oct 22, 7:40am 1666204842

"we're just not seeing enough 90% lending - banks are doing mostly 20% only"

It's been pretty obvious for the last year anyone with a 10% deposit is going to end up losing it, pushing the banks past 100% mortgage/security, so that's not really a surprise. Can't take on too many lemons whilst the security ratio is falling for their existing debt-slaves as well.

And as prices drop, those currently sitting on deposits are seeing their deposit increase as a percentage, so it's a problem that will eventually self-correct. But oh boy are the ticket-clippers going to squeal while it happens!

by RickStrauss | 20th Oct 22, 10:22am 1666214541

"My take on the CCCFA [Credit Contracts and Consumer Finance Act] is crippling. It is really bad for first home buyers."

Really surprising that a measure of personal responsibility applied to directors of finance companies is having such a cooling effect. Surely they were only lending responsibly in the first place and the effect should not be so pronounced.

by Albert2020 | 20th Oct 22, 7:51am 1666205462

That’s some really sad reading. First the owner who says an extra $100/week is going to be tight?! Either the bank didn’t do their due diligence or the owner has been keeping up with the Jones’s since getting the mortgage. As for the broker who wants 90% lending?! Wtf?! Talk about looking out for his own self interest. Yeah let’s go back to 90% lending in a market that is tanking and where interest rates are skyrocketing. What could possibly go wrong?

by vman | 20th Oct 22, 7:54am 1666205671

I feel for owner occupiers with big mortgages,investors not so much.If there is one positive,having full employment,if folk need more income,there are plenty of jobs available for extra part time work,so might be tough,but you can get through,imagine if we had not supported business through this period and they took the easy way out and laid people off through the last few years.When you see US mortgages at nearly 7%,UK inflation @ 10%,you have to accept this is a global issue,we as with most western countries have governments that gave added fuel to the fire,but 20/20 hindsight,most govt's were dealing with what was in front of them ie global pandemic that was an unknown quantity.No matter what folk say in here and other forums,no one knew the outcome.We have had left leaning governments and right leaning governments in power through this around the world,with similar outcomes every where.We have had so many years of the 'good life' that citizens are struggling to deal with hardships that many previous generations have dealt with.As is the way with human nature,we are looking to blame someone,so we turf out who ever was in power through this and we feel like we have achieved something.It is noticeable even in this site,folk are getting tetchy,looking to point score or argue who was right or wrong.I don't know that anyone has a real solution.See below this exceprt from Cameron Bagrie yesterday in BusinessDesk regards working together both sides;

"..Not everyone agrees massive rate hikes are necessarily the best way forward.

The notion “we need to bludgeon the economy into submission” is only partially true, said economist Cameron Bagrie.

“We need to have a national debate on stimulating supply; we literally need a call to arms,” he said, adding both sides of the political fence need to agree.

“If we don’t get that call to arms, this is not going to be a soft landing; it’s going to be a deep, prolonged recession.”

by profile | 20th Oct 22, 8:25am 1666207522

"there are plenty of jobs available for extra part time work". Yeah, nah. Helen and Michael stitched that up to trap people on benefits with effective marginal tax rates up to 70%. You have to admire their left wing genius.

"High Effective Marginal Tax Rates, as the Family Tax Credit and In-Work Tax Credit abate, provide disincentives to work."

...A family with two kids, either with a single-earner making $60,000, or two earners making $65,000 between them, pay no net tax. The amount they get through Working for Families matches the amount they pay in income tax on their earnings. So they’re on a 0 percent net tax rate.

...But the family is not facing a low tax rate on the next dollar earned. Far from it. If it’s a single-earner family, the next dollar earned draws $0.30 in income tax and a $0.27 reduction in the Family Tax Credit.

So while the family pays no net tax, they face a 57 percent tax rate on the next dollar earned: their Effective Marginal Tax Rate. And we’ll leave to the side additional messes that come with the Accommodation Supplement."

https://www.newsroom.co.nz/working-for-families-is-a-mess-that-cant-be-…

by rastus1 | 20th Oct 22, 8:40am 1666208443

Which is why we have a labour shortage. Benefit system competing with low value jobs.

Mt Luxon where are you?

by vman | 20th Oct 22, 9:05am 1666209944

I would have thought after the covid crisis we would have changed the language around what is a "low value job"...low paid perhaps.

We found that marketing managers and HR consultants weren't on the essential worker lists...

by rastus1 | 20th Oct 22, 10:17am 1666214230

All jobs are essential - maybe not to Govt busy bodies, but essential to the person who is earning and sustaining self and family.

by vman | 20th Oct 22, 11:19am 1666217948

My issue was more around the term "low value"...using your analogy,I would say,all jobs have value,just some are poorly paid and my point around the 'essential' workers was that some of these low paid jobs will grind society to a halt quicker than others if not carried out.

by RickStrauss | 20th Oct 22, 10:24am 1666214692

We have a lot of older folks sitting on a universal benefit who could do some of the many available jobs too. Back in my day supermarkets used to be staffed mostly by pensioners and teenagers, not exploitable migrants.

by vman | 20th Oct 22, 8:56am 1666209389

Thanks for the link Profile,I have to admit I know nothing of the vagueries of the various benefits and subsidies and the abatements.

I might be old fashioned in my thinking,but if it comes down to feeding my family and keeping my house I would still go and do 8hrs @ $23 p/hr @ Bunnings even if half goes in tax,but that's just me and I do totally understand your point.

From your link "...Getting to keep less than fifty cents on some of those dollars is pretty discouraging. And it can encourage under-the-table work, for those who have that option..."

by vman | 20th Oct 22, 9:02am 1666209757

This was a bit technical for me,has this been put in place?

https://taxpolicy.ird.govt.nz/publications/2021/2021-ria-thresholds-mft…

Ecerpt:

Summary of Preferred Option or Conclusion (if no preferred option)

How will the agency’s preferred approach work to bring about the desired change? Why is this the preferred option? Why is it feasible? Is the preferred approach likely to be reflected in the Cabinet paper?

Abatement threshold increases will improve financial work incentives

Increasing benefit abatement thresholds to $160 and $250 per week increases the number of hours a beneficiary can work before their benefit begins to reduce. This will improve the financial incentives to enter the labour market and work part-time for people receiving benefits. Part-time work can provide a pathway to full-time work by providing opportunities to connect with the labour market, get work experience and become familiar with the demands that can come with employment.

There are different agency views on making adjustments to the Minimum Family Tax Credit

Under current policy, changes to benefit settings would lead to an adjustment of the MFTC threshold to ensure the financial work incentives provided by the MFTC are maintained. However, given the extent of the recent and proposed benefit changes, full adjustment of the MFTC incurs significant fiscal costs. Additionally, a significant increase to the MFTC threshold may increase the cost of options [withheld under section s 9(2)(f)(iv) of the Official Information Act 1982] as part of the upcoming review of Working for Families (WFF).

by rastus1 | 20th Oct 22, 9:37am 1666211834

TOP's UBI solves it...in a much simpler and efficient way too.

by Albert2020 | 20th Oct 22, 9:49am 1666212541

Do they still have that policy? I thought they had shelves it in favor of tax rate reform and land tax?

by rastus1 | 20th Oct 22, 10:19am 1666214362

Introduce a $16,500 annual tax-free income to all citizens and residents aged between 18 and 65 years (no changes to superannuation).
Establish a $2,340 annual tax-free child basic income (paid to parents up to the age of 18).
Remove tax loopholes and simplify the tax system with a single income tax rate of 35%, which will include company and trust income.
Increase the annual land value tax on residential land (established in Phase 1) to 1.25%.

The introduction of a Universal Basic Income is likely to grow New Zealand's economy, and it is estimated to be fiscally neutral (within 1% of GDP)

Universal Basic Income - TOP

by GV 27 | 20th Oct 22, 10:39am 1666215564

Ah yes, the old 'here' the tax now but the UBI bit comes later' deal.

You'll get the tax, 100%. The UBI won't happen. Look at the Auckland regional fuel tax. It's a con. It gets collected but barely half of it gets spent. Meanwhile the Council ends up slashing or deferring a bunch of projects post-Covid due to insufficient funds. It's a joke.

by murray86 | 20th Oct 22, 10:44am 1666215852

Disagree completely.

Why exclude over 65's from the tax free threshold?

Payiing people to have children - that's served us well in the past /sarc!

Too high a tax threshold, but do remove the loopholes

Land value tax? BS fiddling on the edges. Does nothing. Proper regulation of housing is required. Tax will achieve nothing.

As to a UBI. I feel that while a safety net is necessary for people who genuinely need it, a universal benefit will undermine society more. What the Government needs to do is put its money where its mouth is and support a program to create real jobs everywhere for every one (as GR stated in one of his early speeches) and separate the income levels from benefits, that make it worthwhile for actually working and earning.

by RickStrauss | 20th Oct 22, 11:22am 1666218126

LVT and liberalising zoning would go a long way, together. Absolutely. LVT also isn't passed on to renters.

And LVT has a track record of being used successfully in NZ in the past to break up land banks and get land into the hands of average Kiwis.

by stefanblaise | 20th Oct 22, 9:07am 1666210045

I admire your idea of work ethic, but there is a limit in people's time on 2nd and 3rd jobs, especially for families. Children will be the ones to suffer as mum and dad do more and more hours. May I introduce them to being business owners-its harder work, but you can keep increasing your income well past the hours for wages equation with no upper limit, and you can adjust your own prices for inflation.

by Brock Landers | 20th Oct 22, 8:11am 1666206702

Ticket clippers and other assorted parasites shedding crocodile tears.

by JustAnOpinion | 20th Oct 22, 8:26am 1666207589

It's almost as if people have their own self interests at heart... I'll file this next to "sun comes up in the morning".

by J.C. | 20th Oct 22, 11:41am 1666219272

Amy Stevens is the founder of Slice, a shared home ownership platform which helps facilitate first home buyers' entry to the market.

This is part of the problem. Not the solution.

by JimmyJames | 20th Oct 22, 7:31am 1666204306

Tough times ahead for New Zealand. Even our Swanndri's are soaked in debt.

by Audaxes | 20th Oct 22, 8:08am 1666206519

Benchmark interest rates rise worldwide - an end of an era is upon us.

by bw | 20th Oct 22, 8:01am 1666206076

A truly disturbing graphic - watching NZ march to the top of the table.

Thx.

by JustAnOpinion | 20th Oct 22, 8:27am 1666207628

lol that is comedy gold thanks Audaxes. What a shambles!

by KH | 20th Oct 22, 7:57am 1666205836

The $100 million saved by the closure of Creative New Zealand should go to Pharmac.

by powerdownkiwi | 20th Oct 22, 8:24am 1666207449

Yes, they should act now

by JustAnOpinion | 20th Oct 22, 8:28am 1666207703

We could throw on another $50mil by reducing the propaganda spend as well.

by Gummy Bear Hero | 20th Oct 22, 9:25am 1666211143

Creative NZ were unfairly beaten up by the NZ media ... the facts of the story paint an entirely different story ...

by KH | 20th Oct 22, 9:41am 1666212073

Which facts Gummy ?? Do tell.

Cteative New Zealand shown to be a deliberately racist organisation. Well demonstrated. And thus must close

by Zachary Smith | 20th Oct 22, 9:50am 1666212646

Indeed Creative NZ declared that they were openly hostile to the culture of a large part of the population. There's no getting away from it.

by Gummy Bear Hero | 20th Oct 22, 10:25am 1666214756

... no , they didn't do that at all ...

by Gummy Bear Hero | 20th Oct 22, 10:16am 1666214183

.. sure thing : Creative NZ has limited funding , but a multitude of arts to support ... currently they're assisting around 56 different projects ...

The people running the Shakespeare plays have 90 % of their funding in place ... the CNZ money was just 10 % of their budget ... the bard was never in peril ... the plays were going ahead regardless of CNZ's decision ...

... just the facts , Dano !

by KH | 20th Oct 22, 11:42am 1666219372

All the facts Gummy please. There was the "imperialist" commentary et al. That you don't mention.

Comments entirely consistent with all of the objectives on their website. Their own words note.

Openly declared cultural warfare. They gotta go.

by Gummy Bear Hero | 20th Oct 22, 12:28pm 1666222109

... their anti-colonic rhetoric was stupid ... I'm sure they see that now ...

They're fine , a little woke ... but it is the arts , after all ...

by redheadonist | 20th Oct 22, 11:41am 1666219291

https://www.rnz.co.nz/national/programmes/mediawatch/audio/2018863382/m…

https://thespinoff.co.nz/pop-culture/19-10-2022/how-one-online-rant-abo…

by Tee | 20th Oct 22, 10:16am 1666214185

Creative New Zealand, re-name "Creative Polynesian Aotearoa" or the like.

by Gummy Bear Hero | 20th Oct 22, 10:24am 1666214675

... only if you've fallen for the media hype ... if you trust the lazy sloppy mainstream journalism in this great country , girt by sea ...

by vman | 20th Oct 22, 11:26am 1666218395

Don't be so harsh on Mr Hosking,he is our highest rating mainstream media 'journalist', 'commentator' or 'Fox shock jock'

by Gummy Bear Hero | 20th Oct 22, 12:00pm 1666220419

... nah , I'm calling out the journos at Stuff ...

Hosk does the Hard Talk interviews , hence Ardern ran like hell , & hasn't been near him for years , the Hosk has her number ... Jacinda is hopeless if it's not prearranged questions & answers... of Jacindamaniacs , like Tova & Jessica ...

... Luxon is not up to much , I'm not a fan , but he fronts up ...

by vman | 20th Oct 22, 12:22pm 1666221726

Hard talk interviews lol...only if you are on the left...if you are with the Nats or anything with property...softly,softly...

by Gummy Bear Hero | 20th Oct 22, 12:31pm 1666222298

... either you're so biased you're totally anti-Hosk , or you're not listening hard enough ...

I've heard him being firm ( but fair ) with pollies of all stripes ... and with Adrian Orr ...

by Audaxes | 20th Oct 22, 8:23am 1666207416

Up to $11.1b US$ auction bids in Switzerland this week from $6.3b last week and $3.1b week before. Link

What's happening in Swiss US$s is the difference btw inflation and "inflation." It's not semantics. Inflation = too much $s. "Inflation" supply imbalance ends up being, gasp, transitory. $ shortage means "inflation" not inflation. Ask the Japanese. Link

by Tee | 20th Oct 22, 8:42am 1666208522

And Nicola wants to set up a fund to address ram-raids...

Really, is a fund a solution to social issues.

by lastlegs | 20th Oct 22, 9:06am 1666209986

and yet we increase tax on alcohol to reduce harm,now we are using tax dollars to protect the liquor stores.

by JustAnOpinion | 20th Oct 22, 9:10am 1666210252

These are necessary contortions to avoid discussing root cause problems as signalled in data, a speciality of the age.

by vman | 20th Oct 22, 9:11am 1666210303

Crikey,I hope National cuts my tax right down so I can choose when & if I contribute to society;

National's finance spokeswoman Nicola Willis today unveiled the party's policy to "bring social investment to life" if elected next year through setting up the fund that would invest in programmes to help the most "disadvantaged citizens".

"Willis said the fund would start with government money but she hoped its success would see wealthy New Zealanders choose to invest in it."

by Gummy Bear Hero | 20th Oct 22, 9:22am 1666210960

It's a resurrection of a plan Bill English formulated ... by all accounts , a reasonable & cost effective policy ... accountability is locked in ...

by RickStrauss | 20th Oct 22, 10:26am 1666214778

It's more an ideal than a policy. "We'll use data to figure out what social services to fund for people."

As if nothing of the sort is done in usual times.

by Rex Pat | 20th Oct 22, 10:59am 1666216795

Rubbish. It was a wrap around policy. The left hate it because it’s efficient. They want a pool of money to waste as they see fit.

by RickStrauss | 20th Oct 22, 11:11am 1666217466

Hah. It was an aspiration. An idea that using additional modeling and data analysis they could find better ways to provide targeted services. That's all. It's not a bad idea to seek to better understand causes and effects, but the sell sizzle relies on the idea that folk aren't trying to understand causes and effects to date.

If you believe it was a complete policy feel free to post detail of wrap-around policy.

It's appealing because it feels like it might make a difference allow us to fund less and give me tax cuts instead, while also...hey, fund private businesses with taxpayer money. Business owners want a pool of taxpayer money eh.

by redcows1 | 20th Oct 22, 9:48am 1666212506

Isn't this voluntary tax called lotto?

by Gummy Bear Hero | 20th Oct 22, 10:09am 1666213753

... that's a tax on people who're not able to understand the math ...

by GV 27 | 20th Oct 22, 10:40am 1666215614

I understand the math. I just have a fetish for absurdity, which is what those odds are.

by Nifty1 | 20th Oct 22, 8:59am 1666209556

Summers come early, never seen so many "flip flops'...

by Audaxes | 20th Oct 22, 8:59am 1666209560

Wall Street is heading lower today with the S&P500 down -0.8%.

Same looking forward?

Tesla’s market cap > top 20 European banks… …combined! Sounds reasonable :) Link

by HouseMouse | 20th Oct 22, 9:04am 1666209871

Suckers rally done

by profile | 20th Oct 22, 9:15am 1666210521

EV's are one slick marketing job. Help North Sea oil - buy an EV.

"And the UK happens to have one of the world's biggest producers of the stuff. Why aren't we shouting about this even more?

Perhaps, bluntly, it's because of the way this refinery looks from the outside: an impenetrable fossil fuel fortress. Perhaps it's because no one much likes to discuss the fact that you need crude oil to make batteries, or that you need a dirty, energy-intensive set of processes to process it into the coke and then the graphite that make the world's batteries work.

Are the "optics" simply a bit too challenging?"

https://news.sky.com/story/inside-the-arms-race-to-build-the-batteries-…

https://twitter.com/EdConwaySky/status/1492219509792550914/photo/1

by northman46 | 20th Oct 22, 10:23am 1666214633

You love fossil fuels and don’t believe in climate change. So what’s your problem?

by agnostium | 20th Oct 22, 10:26am 1666214805

Yes, cars for the masses is dead or will be soon enough. To be clear, EV cars and ICE cars both.

by whakahokia mai | 20th Oct 22, 9:11am 1666210274

I wonder how popular a Robin Hood party would be in our next election. Certainly many wealthy people I know see paying tax as theft and therefore take steps to prevent it.

by JustAnOpinion | 20th Oct 22, 9:28am 1666211304

Wealthy people pay ALL the tax. Feel free to educate yourself here - https://www.stuff.co.nz/business/opinion-analysis/114628351/an-inconven…

by redcows1 | 20th Oct 22, 9:54am 1666212883

Rediculous comment, particularly when you attach stuffs analysis.

They pay the largest proportion of PERSONAL TAX. Which is only a portion of total tax.

by JustAnOpinion | 20th Oct 22, 10:56am 1666216617

Yes it is, are you trying to make a point? Do you have any actual information to share? Assuming you don't like Stuff's analysis what are your counterpoints?

by RickStrauss | 20th Oct 22, 10:28am 1666214881

Highly-paid people pay most of the tax. Big difference from wealthy.

Much money has been made in NZ in recent decades by buying and selling for capital gains while pretending not to have for tax purposes.

Working Kiwis are a bit tired of carrying property speculators for all these years.

by JustAnOpinion | 20th Oct 22, 10:48am 1666216104

Working Kiwis are the only ones who can afford property, the cognitive dissonance on display here! No one was pretending not to make capital gains, who are you referring to? The law was and still is that capital gains are not taxed, what are you so tired of?

by sparrow | 20th Oct 22, 11:09am 1666217345

I've got a couple of old folk in the family living the good life off the hundreds of thousands of tax free capital gains their properties have accrued... and there's still national super for pocket money.

by murray86 | 20th Oct 22, 11:28am 1666218525

So they borrowed against the changed value of their houses? Or did they sell them and not pay tax? Or are they raking it in from exorbitant rents (not capital gains)? Likely as not they just gloated over a portfolio value that is now shrinking unless the sell quickly, not providing an income at all. So what do you mean by "living the good life"?

by RickStrauss | 20th Oct 22, 11:16am 1666217784

No one was pretending not to make capital gains, who are you referring to?

Haha, good one! The idea that folk haven't bought and sold for capital gains while pretending to have bought for other reasons for tax purposes :D Given buying and selling for capital gains is taxable under our income tax act.

I even recall one investor in Interest comments admonishing another to be careful what they say on a public forum as stating openly that you traded for capital gains makes you liable. Our dirty little ethical issue of the past decades.

Working Kiwis are tired of carrying such speculators who've been not paying their fair share. Time we rebalanced taxation to incentivise hard, productive work rather than speculation, and get folk contributing their fair share. Enough bludging.

by JustAnOpinion | 20th Oct 22, 4:28pm 1666236500

Umm I am claiming that there is nothing illegal about capital gains in the past, currently we have revised bright-line taxation that is essentially capital gains tax on property and then we have also removed claiming interest as a cost against offering rentals. Not sure that was a good idea but at least it made a point. We won't know how good these policies are until interest comes back down as interest rates will do the heavy lifting of bringing our property prices back down to where they should be.

by RickStrauss | 20th Oct 22, 4:46pm 1666237567

There's nothing illegal about buying and selling a property for capital gains in the past, no. The illegal part is evading tax that is applicable when buying and selling for capital gains, under NZ's income tax laws.

The fact it's been openly done with wink-nudge tolerance for the last twenty years really just speaks to character and entitlement.

by Kiwi Tim | 20th Oct 22, 10:00am 1666213236

I don’t see it as theft. I just think it would be nice to have something left over as compensation for the sacrifice of earning said wealth. Remember, poor are jealous about money and high income earners are jealous about time with kids, sleeping at night, less stress. Everyones just trying to find the balance but never can.

by redheadonist | 20th Oct 22, 12:49pm 1666223399

" I just think it would be nice to have something left over as compensation for the sacrifice of earning said wealth."

Over and above the wealth they have extracted from the society they live in, that this tax would contribute to?

by JustAnOpinion | 20th Oct 22, 4:17pm 1666235840

Comrade, this extraction was not done a gun point, people paid from their wealth to others for a service or product. Please remember that high earners pay all our tax.

by Squishy | 20th Oct 22, 9:14am 1666210491

Just watching the British government collapse. What a mess.

by Gummy Bear Hero | 20th Oct 22, 9:19am 1666210745

... it's amazing isn't it ... we have the worst PM & government in living memory ... then you look over to the UK , at the complete cluster F that is occurring there ..

Whew ! ... we're not so bad ...

by Brock Landers | 20th Oct 22, 9:26am 1666211168

Don't count your chickens before they hatch.

A Maori party, greens, labour coalition would give them a run for their money.

by JustAnOpinion | 20th Oct 22, 9:30am 1666211453

To be fair the clown show that is the UK Tory party is more comically bad than the wearing, constant more affecting social engineering and economic mismanagement that the NZ collation of the dim would be.

by Gummy Bear Hero | 20th Oct 22, 9:39am 1666211965

... we have a choice , don't vote for either Labour nor the Gnats ... they're nearly as useless as each other . ..

Vote minor party ! ... any minor party ... well , not the Greens of course ... we're trying to make the situation better , not 10 times worse ...

by vman | 20th Oct 22, 9:51am 1666212689

Gaurav Sharma for PM...

by Gummy Bear Hero | 20th Oct 22, 10:07am 1666213637

... couldn't be any more incompetent than the current one ...

by agnostium | 20th Oct 22, 10:29am 1666214972

What makes you say that?

Luxon is looking completely underwhelming ...

by RickStrauss | 20th Oct 22, 10:31am 1666215088

He's a businessman who has aspired to be PM, not someone who's thought much about policy.

by Gummy Bear Hero | 20th Oct 22, 10:37am 1666215453

Luxon only looks underwhelming ... Ardern has proven that she is ...

by vman | 20th Oct 22, 11:33am 1666218814

Well,if Luxon gets in with over 50% of the vote,without the requirement for a coalition partner,I will tip my hat to him and he can take over the mantle of having the best political win of the MMP era,in the mean time,the gold medal still sits with the current leader.

by Gummy Bear Hero | 20th Oct 22, 12:36pm 1666222603

The point of MMP was to avoid a >50% situation ... and look how that's backfired on the nation , Ardern & Robbo unfettered have behaved very badly ...

... the Gnats will win in 2023 , with ACT ...

by The Person | 20th Oct 22, 1:38pm 1666226303

No the point of MMP was to avoid a party getting 26% of the vote and only 2 seats.

by vman | 20th Oct 22, 4:59pm 1666238352

With the way the world is going post global pandemic,there probably will be a change of government,humans like to blame some one but unfortunately where one could say Winston was a hand brake,ACT will be more of an accelerant...

by agnostium | 20th Oct 22, 10:28am 1666214895

Well based on the policies proposed National and Act would be a closer comparison.

by lastlegs | 20th Oct 22, 9:31am 1666211501

we dont know how lucky we are.Fred Dagg done the video and labour should use it for an election theme song.

by dumbthoughts | 20th Oct 22, 9:30am 1666211410

What blows my mind watching the UK carnage unfold is seemingly just how dependent everybody there is on the government to provide for them. Pensions, public sector wages, energy subsidies ... is there anybody left in the British Isles who puts in more to the system than they take out?

I know that NZ's situation with respect to "net" taxpayers is not great, but the UK really does seem to have snookered itself in this respect. How do you ever set about fixing this situation?

by Brock Landers | 20th Oct 22, 9:52am 1666212737

Superannuation, Accommodation Supplement, Working For Families, Fuel Tax Subsidies, Cost of Living Payments.

It's no different here.

by Gummy Bear Hero | 20th Oct 22, 10:05am 1666213556

... yes ... " ambulance at the bottom of the cliff " stuff ... putting bandaids on compound fractures ...

by RickStrauss | 20th Oct 22, 10:30am 1666215027

At the end of the day, with those benefits we're really subsidising business and property.

by JustAnOpinion | 20th Oct 22, 10:54am 1666216444

Rick, what is your alternative? Stop paying all the subsidies and benefits? There are already 4000 households in motels, we would need to move those subsidies into building new motels, is that the answer? Certainly the $Billion the Labour government has spent on this area could be better spent.

by GV 27 | 20th Oct 22, 11:00am 1666216825

This the problem. These things have become 'off limits' because apparently the only options are the status quo (which is getting worse) and apparently throwing everyone out on the street. There is no sensible timelines or middle ground, these are the only two options that exist.

by RickStrauss | 20th Oct 22, 11:19am 1666217982

Liberalise zoning, ramp up LVT on the unimproved value of land while ramping down income tax accordingly, and tax equity release for deposits as income. For a start. Then ramp down your subsidies for property and wages.

Other additions can also be considered, e.g. reducing tax on building of new housing.

It makes no sense for wage earners to be funding all society via taxes while policy subsidises property speculation, like we've been doing for the past decades. It's has brought us to the crisis, so won't fix it.

by JustAnOpinion | 20th Oct 22, 4:23pm 1666236187

Some good ideas there, liberalise zoning is a must however the new planning orders will address some of that. Taxing unimproved land is a also a good idea but very complicated to implement and may penalise Maori in an unreasonable way.

Not sure what Tax equity is, can you explain?

The main issue however is how to ramp down these subsidies and not make people homeless, that problem remains.

by RickStrauss | 20th Oct 22, 4:49pm 1666237756

Yeah, liberalising and LVT up / income tax down would definitely do much of the trick. (Ramping down subsidies would need to be done gradually along with these, likely.)

Taxing equity released for a deposit I think is probably unnecessary if the two above are done, but it was a good idea another commenter on her put forward. Taxing equity released from capital gains essentially realises that gain for the purpose of buying the next property. Taxing it as income would put FHB and investors' deposits on an equal footing, thus helping address the problem of FHB not being able to compete with speculators.

by GV 27 | 20th Oct 22, 10:42am 1666215735

Yes, we're almost as good at talking about the rich paying a 'fair share' as we are at intentionally misrepresenting what that means in plain and ordinary language.

The Greens are particularly good at it.

by CeeJ | 20th Oct 22, 2:18pm 1666228737

Serious question from a beginner : do these 10yr interest rates tell me that people have more faith in the PRC than in the USA?