Here's our summary of key economic events overnight that affect New Zealand, with news we start the week after the long holiday weekend with all eyes still on inflation's challenge.
In the coming week, the spotlight will be taken by the US inflation rate, and their retail sales, followed by the FOMC Minutes. The Americans will also release updates on industrial production, producer prices, and Michigan consumer sentiment. Elsewhere, China will be releasing its March inflation rate (today) and trade data on Thursday. The Bank of Canada and the Bank of Korea will be deciding on the course of monetary policy. Also, India, Brazil, and Russia are each set to publish CPI numbers.
Overnight the Americans released consumer inflation expectations survey results and they rose in March. Expected inflation for the year ahead in this NY Fed survey was up to 4.7%, rising from an almost 2-year low of 4.2% from the same survey in February. It was the first increase in five months. The Fed has more work to do.
American wholesale inventories were virtually unchanged in February from the same month a year ago in nominal terms. That is taking the top off its inventory:sales ratio quite quickly as sales values rise with inflationary pressure.
On Wall Street, we are going into an intense period of earnings releases and it is becoming clear that they may be as weak as -7%. Inflation is squeezing margins everywhere. Share prices may be being revalued as interest rates rise, but they may also get a compounding hit if earnings fall at the same time.
Japanese consumer confidence recovered in February and by much more than expected, although to be fair it is only a recovery from its 2022 lows and nowhere near back to pre-pandemic levels.
The UST 10yr yield starts today at 3.42%, and little-changed. The UST 2-10 rate curve is still at -59 bps. Their 1-5 curve inversion is now at -116 bps. And their 30 day-10yr curve is a little less at -105 bps. The Australian ten year bond is not trading at 3.18%. The China Govt ten year bond is still at 2.87%. And the New Zealand Govt ten year is in abeyance at 3.97%.
On Wall Street, the S&P500 opened lower but is clawing its way back to even near the end of its Monday trading session. European markets were all closed for Easter. Tokyo traded and ended its Monday up +0.4%. Hong Kong was closed for the holiday. But Shanghai was open and fell -0.4% yesterday. Of course both the ASX200 and NZX50 didn't trade yesterday.
The price of gold is at US$1988/oz and down -US$20 from this time yesterday.
And oil prices are down -50 USc at just over US$80/bbl in the US. The international Brent price is little-changed at just under US$84.50/bbl.
The Kiwi dollar is almost -½c lower against the USD and now at 62.1 USc. Against the Aussie we are have dipped to 93.6 AUc. Against the euro we have dipped slightly too, now at 57.2 euro cents. That means the TWI-5 is at 70.3 and down only -10 bps from this time yesterday.
The bitcoin price is sharply higher today, now at US$29,170 and up +4.4% from yesterday. But volatility over the past 24 hours has only been moderate at +/- 2.2%.
There was a lot of economic news released over the holiday weekend. If you missed that you can catch up here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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135 Comments
the FED has some tough calls to make within the next few months
Yeah interest rates have only one way to go. The damage to NZ is going to be massive.
An OCR peak of 6% in NZ is becoming now a likely scenario.
A peak above that is more likely
You don't think inflation is peaking? Completely anecdotal (because our stats are too infrequent and are already out of date when we do get them), but it finally feels like some heat has come out of the labour market (in Auckland at least). I am not seeing so many help wanted signs and understaffed businesses. Anyone else agree?
The problem isnt whether it has peaked peaked - the problem is when it will be back sub 3%.
The problem is we have imported and local inflation and both seem to be persistently high. so we will need to match the Fed who will do what it takes to bring theirs down and possibly more if our local inflation becomes habitual. Expect quite a few more raises
"the problem is when it will be back sub 3%"
The problem is hyperinflation, and if inflation has peaked then that isn't a problem. Engineering a recession to get inflation to 3% one year quicker does not make sense, most people would be better off with higher inflation than a recession.
The bigger issue is that aggregate inflation doesn't measure how people are affected. We might see deflation in building costs, for example, whilst experiencing severe inflation in food costs. Not everyone builds, but everyone eats.
As long as there is runaway inflation in food costs, we have a problem. And these are linked fairly closely to energy costs (wages and fuel) and the exchange rate.
And a significant portion of the population has to cut their food expenditure as it's the only part of their budget that is readily negotiable as prices rise across the board. And prices across the board are rising faster than budget cuts can adjust for.
Just wait till you have high inflation AND a recession - they're not mutually exclusive.
Tough times make people reassess how they do things. There is a Freud quote but I can't find it
Would you rather have 6% inflation and a job or 3% inflation and be unemployed?
False dichotomy. Our unemployment rate is currently 3.4%, RBNZ is looking for unemployment to get to around 5.7%, for a frame of reference between 2010 and 2020 our unemployment rate averaged 5.2% and peaked at 6.7% and I don't remember the wheels falling off. Your question should really be: "would you rather 6% inflation and a job or 3% inflation and a <1% chance you are unemployed".
The 6% inflation would probably include decent pay rises, the 3% may not as the labour market wouldn't be tight. So I would choose the 6%.
Same with the 1980s. Life went on with ridiculous interest rates, and high unemployment, but inflation came down. The big problem now is that people who have an interest in gaining money by not having high interest rates seem to be listened to. In spite of them being wrong 68 times in a row. Just check our financial history. And don't tell the obvious lie that it is different this time. It is identical to all the other times.
Those who study history are condemned to watch while others repeat it. Not Freud. Probably a Greek.
I don’t agree with your last comment - I was out quite a lot in the weekend and saw lots of ‘staff wanted’ signs in cafes snd shops.
I do agree that the heat is coming out of some parts of the labour market though, especially property and development-related.
The cafes are busy, can't get staff
Who wants a minimum wage split shift casual job?
The next US Cpi is out this week. It hinges on the OER or owners equivalent rent component, which I would say would rise.
Came across an interesting article this morning. Once an active blogger endorsing the FIRE movement (financial independence, retire early), this man is now finding early retirement a financial struggle and getting back into the workforce. Link
Such articles might soon begin featuring on Herald as sob stories of Kiwis with poor yields on their passive rental income portfolios.
7% in the bank is better than a low yield (increased costs) rent and a house value that is dropping fast and might not recover in the time you need to sell.
Might pay to sell at a loss now rather than a bigger loss later!
Sorry to be the bearer of bad news that rents are rising fast. You will be paying a LOT more each week, and month next year than you are now.
Stats to back this up? I'm not following rents though last I saw on interest was real rents falling nationally and nominal rents falling in Wellington and Auckland.
Stats for this are reported everywhere. Search Martin North for a permabears concerns and analysis. As for auckland its early days after 2 or 3 years with almost no movement
Link?
real rents falling nationally
Just because rents are rising slower than inflation doesn't make HW2's statement untrue. If you want some stats, refer to the rental price index published by StatsNZ. Auckland rents are up 4% annually on a flow basis, Wellington is basically flat. Nationally rents are up 2.1% on a flow basis and 3.9% on a stock basis.
https://www.stats.govt.nz/information-releases/rental-price-indexes-feb…
Thanks - a reference I was looking for. Though rent is captured in CPI, it's interesting the increase is lower than the generalized figure - which was more what I mean as lower in real terms.
Calculating real rent movement would be much more complex I imagine, I'm not aware of a figure or calculation. We're in a bizzare period where rent as a basic purchase yield calculation will be slowly trending up due to falling house prices, however down against increased servicing costs.
Something something, rents are up on debt free rentals, down against the debt burden for now.
Its interesting the UK govt wages war against landlords and rent goes up strongly.
I think rents are trying to rise fast with those landlords that are coming under financial pressure due to their debt levels/leverage situation.
Ive always made it a point to not rent from johnny come latelys. Just anecdotal, but my current rent situation, no increase in rent for 3 years, and this property just rented again for the same price I was paying.
I used to be on the FIRE Bandwagon, and there are definitely components/habits that I have adopted and retained, but as a whole it is fundamentally flawed. It requires life to remain absolutely consistent.
Relationship changes, dependent changes, health changes, large scale purchases (house maintenance/repairs), cost changes (i.e. inflation), or market changes (i.e. loss of capital), and it is rendered obsolete pretty quickly.
I agree. There are personal circumstances at play as well. What most early retired folks struggle with is staying connected with friends and family, most of whom work fulltime and are unable to relate to your lifestyle.
I for one don't even have enough interests outside of work to keep me constructively engaged for an entire month.
I feel sorry for you. How sad.
I have more personal projects than I have expectable life remaining.
Likewise. If I could retire in my 30s I would, happily - and I'd be busy with creative projects for the rest of my life. But we're all built different : )
Same.
I work solely to put bread on the table and a roof over my head - I'd ditch it in a nanosecond if I could, and still have more to do than there are hours in the day.
Totally Fire is the best thing ever just takes lots of commitment and self control. Got out 10 years earlier been better if it had been 20 years ! I feel sorry for people that don't want to stop but thankful for their contributions to the economy and taxes !
I have more personal projects than I have expectable life remaining
You'd quickly run out of the supplies and services to complete your personal projects if everyone thought like you. Let's all just sit back and consume while complaining those damned capitalists are offshoring our jobs that we don't anyways like showing up to.
PDK could get a job in oil exploration, no doubt he'd be happy to find a bit extra fossil fuel to keep the world going...
Where has that left you
Someone said to aim high, for the stars. If you dont quite get there, it's better than having no ambition.
Go classical, Tennyson something like - it’s better to have loved and lost, than to never have loved at all. However today’s world is obviously rather different in those areas of activity.
Work to live rather than living to work.
Indeed. The living to work bit is the root cause of reducing our biosphere to a burnt husk.
Yes - most people are just sheep and work harder and harder to buy more stuff and then get anxious when that is threatened.
Hilarious
I do look forward to the overall reset of peoples priorities form the coming recession. Watch how those who flaunted their wealth get ever more quiet and unhappy whereas those who were always modest will be unchanged. More will be having people over for gatherings, picnics will be abundant, and maybe for once everyone will stop talking about work so much. Better living everybody
FIRE is not about never working again and doing nothing, it's about having the choice to do stuff on your own terms, be it work, travel, volunteering, socialising or whatever you choose.
he says there’s no getting around the insanely high costs of higher education in the United States. He estimates it could cost as much as $1.5 million to send both of his children—currently aged 6 and 3—to college.
The Rentier Economy is a Free Lunch
You’ve had, for the last – really since the 1980s, but even since World War 1 – this movement to prevent industrial economies from being low cost. But the objective of finance capitalism, contrary to what’s taught in the textbooks, is to make economies high cost, to raise the cost every year.
That actually is the explicit policy of the Federal Reserve in the United States. Turn over the central planning to the banking system to essentially inflate the price of housing, with government guaranteed mortgages, up to the point where buying a home is federally guaranteed up to absorbing 43% of the borrower’s income.
Well, you take that 43%, you take the wage withholding for social security and healthcare, you take the taxes; the domestic market shrinks and shrinks. And the finance capital strategy is exactly what it is in the United States today, in Europe. Shift all of the money away from the profits of industrial capital that are reinvested in making new means of production. To expand capital into a shrinking economy where the financial sector intrudes more and more into the economy of production and consumption and shrinks the economy.
So this is a rich lister moaning about his childrens education costs?
Not really. Someone who worked hard to create a lifestyle for himself and who wants to maximise his kids chances in life whilst enjoying his own.
Worked hard for less than 15 years and then expected to live of other people's work for the rest of his life.
Working smarter not harder.
Blame the student loans systems for that - removed the need for efficiencies in tertiary education. Same as here.
There are lots of FIRE option out there.
https://www.speakerbookingagency.com/booking-request/jacinda-ardern
https://www.theguardian.com/commentisfree/2021/aug/17/why-would-anyone-…
Two different businesses at play here.
Nothing wrong with the income from house rentals. -. if your business owns the house that is.
But if you were in the 'borrow and hope" business then trouble. Ya shudda got rid of the mortgage when you could.
Its interesting that his main excuse is the fear of education cost in the US. I guess we assume that US College costs will never get as high as he is is claiming.
The other elements to that article and the blog post that the talented fortune journalists decided to make clickbait out of are pretty basic - your investments go up and down over time, full-retirement without real hobbies/volunteering/a sense-of-purpose is boring, sometimes unexpected things happen and your safety margin should try to account for that, and you can always return to part time work if you choose.
He's considering taking on a $40,000 year job as a video coordinator for a basketball team, to help keep finances up in this period of volatility. I think most FIRE bloggers and fanatics would fully endorse that eh.
I worked and slaved because I had to. There came a time when I did not have to, as was the plan, and my own activity just squeezed out the work time thing. Work time had to go.
Its subscriber access
can you post the gyst?
https://12ft.io/ worked to avoid paywall
If work is fun, why retire early?
Stay tuned to NZs inflation. It will make The US look insignificant.
The Hipkins led cluster continues its spending spree to buy votes while Rome burns.
No cut backs, no trimming the sails to meet the gale, no plan to reduce waste / spending...
Orr needs to go hard with another 0.5 to .75 OCR rise to give Hipkins and Robertson a reality check.
I’ve noticed big increases in some items in the last fortnight. Dog food 10%, decent bread now over $5 but it doesn’t stop there. Top that with rates increases, doctors fees…it’s a real issue now
I've noticed big increases in political huckstering
:)
Then there is the fuel subsidy that is due for removal?
Orr has to teach HIPKINS a lesson.
Surely it will be kept just a few months out from election?
Agreed, no chance The Cost Of Living Crusader doesn't extend the cut (I note that in my neck of the woods prices for 98 are getting back towards $3 per litre).
Supie's recent note on the tactics the big two supermarket companies are using to prevent others from pricing lower was interesting.
Greedflation looks to have a role here. Perhaps it's time to start giving some limelight to the exec teams of the big supermarket and ask them about their role and place in society vs. the doctrine of shareholder primacy.
The "best interests of the shareholders" includes maintaining/improving their corporate reputation.
If reputation matters in the industry you are doing business in, yeah sure. If the product you are selling is a necessity of life, and your customers only choice is between you and the other guy and you're both taking the piss, then not so much.
What rubbish. I buy shares to make a buck. No other reason.
You may have a shareholders short term focus however however I am referring to the Directors responsibilities to run the business on your behalf tpensure that the business is sustainable in the long run.
BTW, I am a Chartered Director with over a decades experience.
Anecdotally a german friend of mine travelling the country, confirmed that the PaknSave in Blenheim was vastly more expensive than in Kaikoura by a solid margin. Makes no sense other than the owners marking up for what they perceive the market can afford
Well if you have to cut something out the dog food is probably ok without bread
Or you could just cut out 33 cents a day on not supporting Interest.co.nz right House Mouse?
Yep, so many of the increases I have noticed recently have far exceeded the official inflation rate. House and contents insurance up 26%. Various canned vegetables up 20%. Favourite olive oil up 10% in price and down 25% in size! Cat litter up 20%. I could go on....
There's plenty of cutting back, the problem is the stonking amount of money we've 'spent' with nothing to show for it.
Start thinking about the cost of dental for every adult, cycline rebuilds, Pharmac budgets... hell even the monstrously overblown Auckland Light Rail project starts to sound like a great deal considering what's been added to our Crown debt in the last three years with no actual asset or very little to show for it.
Where’s our new hospitals or at least improved and extended ones?
Are we preparing for the next pandemic with investment?
How about our hospitals in Wellington? Is the city ready for ‘The Big One’?
Have we learnt anything from the Christchurch earthquakes, the pandemic and the floods?
Huge rate increases and no movement on tax brackets.. thus as inflation increases councils and govt are actually getting richer but at everyone else expense.
Tax brackets now need to come down, rates need capping govt needs to stop spending asap and start cutting projects consultants and staff .. so everyone else can keep and spend a share of the money they worked hard to earn.
I was a fan of chippy but unless we see a sudden change in direction labour will now be obliterated in the polls. Unfortunately people may get quite right wing.
Shane Reti has continually pointed out in parliament that the huge $’s put into health has predominantly been spent on the restructure, centralisation to the MoH in Wellington. Difficult enough ordinarily but in the midst of a pandemic when the frontline was being pummelled, utterly irresponsible. The MoH as it is now, is well explained again by Dr Reti as “same team, different jerseys.” Not much has improved either, it might now dawn on the government that a lot of the problems that the DHBs were struggling with actually emanated from the MoH in the first place. Heck they certainly demonstrated plenty of arrogance and accompanying ignorance of frontline functions & necessities often enough during the pandemic lockdown etc.
MoH will white ant the new Health New Zealand organisation just as they did the new health authorities back in the 1990s.
The MoH has no real role now, but has hundreds of people manipulating to maintain their jobs. Merciless and not pretty. It should be simply disbanded.
Are labour to gutless to make the necessary redundancies that rationalisation so many independant boards should deliver?
Yes
Labour haven't decreased public servants since Roger Douglas. Increasing their dependent constituencies is their modus operandi.
Yeah - firing their voters isnt good at election time.
lol. politics is pretty simple - give cash to your voters (for labour its bobs for some and benefits for others) and make them feel good at election time.
Labour has given out so many lollies in the last 6 years there aren't any more left in the basket to give. There goes the strategy out the window, I guess some children don't know the concept of saving
I'm becoming increasingly convinced that public services are 'beyond redemption' and the amount spent seems totally disconnected from any measurable benefit/impact. Even if taxes were 100% (please don't get any ideas Robbo) I honestly don't think you'd see any improvement to healthcare, education, policing or roading. To borrow from Fight Club, we are 'polishing the brass on the Titanic' at this point.
I wouldn't mind the increased tax take from no movement in brackets etc if the outcome was an actual improvement to public services, but all that seems to happen is the ever-expanding legion of nebulous management and consultants grows ever-richer while the frontline suffers.
Maybe this is why the government wants to 'de-colonise' maths or whatever the new insane mathematics curriculum is setting out to achieve. If you can convince people that 2+2=5 then it's easier to pull the wool over their eyes.
The reason you're not seeing improvement in public services is because:
1 - the money currently being spent is to patch up/paper over the investment that should have happened over the last 40 years which is increasingly expensive as assets built with no long-term maintenance planning start failing.
2 - we are in demographic doom spiral where less productive taxpayers have to fund all the old people that accumulated personal assets instead of investing in public assets over the last 40 years
3 - we are facing global energy and material scarcity. Instead of preparing ourselves for a lower fossil fuel future over the last 40 years a we used the almost free energy and ample materials to lock ourselves into a high consumption economy. The energy and materials are now running out. Hence less bang for buck.
The last forty years? Somewhat inaccurate I would suggest. In my experience the only government that was prepared to address and seek to reinforce NZ’s basic infrastructure future needs was that of Norman Kirk’s Labour government 1972 - 75. Unfortunately he passed and without him that government could not withstand Muldoon’s vitriolic personal politicking. Muldoon ignored and dismantled all those ventures and replaced them with vainglorious projects under the mantle of “Think Big.” Damn bloody great big pity!
In my experience, lessons from Chch have long been forgotten by important parts of Auckland Council. Specifically, with aesthetics trumping life safety. I expect (without clear direction from the engineer currently at the top) that the same will occur with our recent flooding events.
We could start by closing that massive loophole where people with millions in the bank or a shedload of income producing assets (shares or property) can claim a benefit purely because they reached the age of 65.
Completely unrelated to GVs comment Dan. The problem is that the Government, national and local, are spending large amounts of money on things that do not deliver any economic benefit. People getting super or income from shares are generally spending that money which is an economic benefit.
Gareth Morgan got a payrise on 1 April (Super)..totally deserving.
GV's comment was about wasteful spending with nothing to show for it. I reckon if we applied Australia's income test to our superannuants, we'd find many times more savings than what the Government is wasting on consultants and "business cases".
If spending money on people's super is an economic benefit (I don't dispute it), then spending money on consultants (while also wasteful) is also an economic benefit. Consultants are people, who generally live in New Zealand, and spend money. Same with dole bludgers.
Depends on how you define economic benefit. We as a national economy already consume a lot more than we produce, as can be seen in our widening trade and current account balances.
Every fiscal dollar that does not boost supply or exports in our economy goes straight to propping up aggregate demand further.
Dan, you're assuming, not applying facts to support your argument. You are starting to sound very petty. Yes i would agree there are a few wealthy receiving super that they don't need. But you arguments are just too broad to be able to be applied rationally. I'm receiving super, but can't afford to retire. I'm saving as much as i can but because the banks won't give anything on deposits unless you lock them away on their terms, most of my savings are in shares, but that doesn't make me rich. But i am not going to retire into a sedentary lifestyle where i wait for God to tap me on the shoulder. I don't want to have to work, but don't have a choice, yet. provide some facts, not opinion to support your view please.
Can you provide facts on how much Government spending is wasteful? I've tried to look, and seen figures of $300m wasted on consultants etc over the 12m. If it's $300m, that's 2% of the annual super spend. I'm sure more than 2% of super is given to wealthy retirees.
Thanks for sharing your anecdote. I'm sure in an income test situation you'd have nothing to worry about. Let's keep super at $17 billion p.a., apply an income test, and then raise rates for all the remaining recipients? Why should you get less so that Gareth Morgan can also receive one?
$249,997 Massey University: I am the whale, and the whale is me – A call for Mātauranga Māori to improve whale stranding response in Aotearoa.
https://pointofordernz.wordpress.com/2023/04/10/applying-maori-knowledg…
That's a shocker Profile. Millions stolen on that list
But may as well join on the gravy train. (aka thievery)
As an indigenous person, (family came here in 1861) I am also applying for one of those quarter million buck grants.
It will be educating people that the New Zealand Matuaranga is to plant your veges on Labour weekend, and to share the best day to put in your Jersey Bennie to have those new spuds ready for Christmas dins. It's indigenous knowledge.
You need to check your view of your self
(of people) inhabiting or existing in a land from the earliest times or from before the arrival of colonists
DP
Established in 2010, the Vision Mātauranga Capability Fund invests around $4 million each investment round into projects across two schemes: the Connect Scheme, which builds new connections between Māori organisations and the science and innovation system; and the Placement Scheme, which enhances the development of an individual(s) through placement in a Partner organisation.
Who established this fund and why?
We have whale strandings on the South Island as well as Aotearoa
Look at major Government projects and costs and what the economic return is. How much is being spent on the AK light rail and what is it's economic benefit to the rest of the country? (And explain why Auckland itself couldn't have planned and paid for it itself over time). $300 mil on consultants is being identified as wasteful spending and Brian Easton's article points to the causes of that. But you're still just guessing and postulating on what you believe is being paid to wealthy. What do you define as "wealthy" anyway? I note Michael Cullen referring to "rich pricks" when frankly in my opinion due to the benefits of his income streams he has received and the benefits he gets, he would be one of the rich pricks for most Kiwis. I suggest in the scheme of things the left wing pique you're experiencing and expressing is just petty.
Because there isn't the population base in provincial backwaters to fund roads or services out there and a big chunk of Auckland's non-motorway money was flowing out of the region until about the mid 2000s, from memory. Auckland getting a proportional share of their roading spend is an extremely recent development, after decades of stagnation. If you want to know why Auckland has had neglected infrastructure, I would suggest it's a 'out of sight, out of mind' problem for the Wellington ministries who control the motorways and rail networks that you'd need to make it happen on a region-wide basis - meanwhile other departments are quite happy to dump hundreds of thousands of new people into Auckland a decade while they send business case studies on long-overdue infrastructure to each other and never manage to build something.
And don't let the 'government paying for Auckland's infrastructure' trap catch you either - 30% of the 50% of the government's CRL contribution is coming from Auckland anyway. I note Wellington is getting 60% of the costs of LGWM funded from central government, despite contributing a whole lot less to the national coffers.
Auckland was just an example GV. I used it because I do know some of the history. I liver there in the 1980s and knew that Sir Dove-Meyer Robinson fought and argued that Auckland needed to provide for it's own roading network, and ultimately lost his mayoral seat because of it, as the JAFA's were rabidly against rates rises, despite Auckland being one of the cheapest places in the country (rates wise). He argued for roads and rail networks. Ultimately the problem got so bad the Auckland could never afford it. The problem was for Auckland it was never an 'out of sight out of mind' issue, it was a 'how to lose an election' issue.
As to 'dumping hundreds of thousands of people into Auckland', that was an Auckland marketing drive, where the Government swallowed the BS that Auckland was vital to NZ's health, over and above everyone else. It had been painfully obvious that Auckland had outgrown the land and the infrastructure for a long time, but Aucklanders paying for it was always and election losing platform. But yes will regions do get ignored, (the east coast proving that at the moment) the Government does throw a lot of money at the major centres and on politician's pet projects.
Well, if it's as simple as Aucklanders 'needing to pay for it' then all we need to do is simply ringfence the amount of revenue collected from Aucklanders in various forms (INC, GST, Fuel taxes, etc) and allow it to function as a city state, with the rest of the country covering their own costs.
One of two things will happen: 1) Auckland will collapse, or 2) the rest of the country might find that they don't have the same ability to syphon off the biggest population centre as a result of it having critical infrastructure endlessly deferred.
My money is on 2).
Doesn't matter, the answer will never be settled.
But if Auckland ceases to be a part of NZ, it may well be somewhat less attractive to a lot of people?
That is true. And there's still no reason why the huge bloat we see in Auckland projects couldn't be trimmed back to make them actually viable. Light Rail doesn't need uber expensive tunnels through basalt fields in the central part of the city. We could just have another bridge across the Harbour for a fraction of the cost of more tunnels there, too. There's no need for these already big projects to become as big as the government gravy train makes them. For the price of walking those two back to something sensible alone, you could have region-wide public transit for all parts of Auckland. Now there's a way to improve productivity. Once you've built it, turn on congestion charging and then watch Auckland change overnight. It'd be a win-win for everyone. But you'd actually have to build something.
How do you know the $300M is wasted on consultants?
I don't actually know that it is wasted. The figure was actually $300m extra spent on consultants, above previous years.
I think he is on the money, super should be income tested. The threshold should be reasonable but there are many people earning great money and receiving super.
It would be interesting to compare an individual who had worked an average lifetime and then retired at say 65 to another who at that same age had lived significantly by means of government assistance, social welfare. As a blunt calculation take the overall cost of super deduct the tax that the recipients have paid and compare that to the overall cost of social welfare.
What does your calculation set out to achieve? Should we cut off a life time beneficiary's income when they hit 65? I have a better calculation:
- Median salary $62k. PAYE $12k.
- Single super $26k. Average life expectancy 82 (17 years on super).
- $26k * 17 = $442k.
- $442k / $12k = 37 years of PAYE to "sponsor" one pensioner today. Reduces to 23 years if you include GST against entire take home pay.
There are 840k people over 65. 188k people on jobseeker benefit.
how do you test income?... trusts, ... all the hidden funds...
i can be a broke 65 yo billlionaire
target Govt waste on health, crime, education, subsidies, donations to other countries, housing waste, benefits for intergenrational losers, ...
How is income tested today? How many "broke" millionaire/billionaires are simultaneously claiming an unemployment benefit because all their income is funneled through trusts?
Easy enough with the new tax reporting for trusts to catch out any attempt to hide assets and income. Although I bet most politicians still have trusts so they will stay off limits
GV the stonking amount of money spent with nothing to show for it is only half of the problem.
In addition that process has fostered cost increases for ordinary people eg rent rises, as well as for businesses and as a result we are less egalitarian but also way less competitive as a country. Its true we should be pushing our exports further up the value chain but that should be to improve our standard of living not just to stand still
Shaft - Orr wants Chippy reelected so he wont do much until after the election
That's a very interesting perspective.
Why would Orr want Chippy re-elected?
All of us keep on making the same mistake and expecting a different result. Since I have really begun to understand that most politicians start off believing that they and only they can change thins, then they get into power, one lot spends money on nothing, the other lot saves money to get us out of the shit the other one has done. We then swap horses for the previous lot so that they can then spend up again.
Perhaps we should all vote for a party that is socially liberal (good health and education outcomes with a workable welfare structure), fiscally conservative (to keep us out of the money go round), and environmentally aware.
Yes, join TOP and get rid of some of the rubbish (impossible to get rid of it all)
Smashed earnings is one of the key reasons Jeremy Grantham is so bearish on shares. We will see
Hahaha
You don't know whether to laugh or cry when you read headlines like this:
Andrew Bailey, Governor of the Bank of England said ".. but I'm a bit more optimistic now ” despite inflation sitting at more than five times the 2pc target.(Telegraph)
The Fed has more work to do. Yeah, right!!!!
Three major central banks (RBI, RBA, BoC) have already hit pause on rate hikes even though they claim (in public) they're still more worried about prices going up. The stage for rapid decline in rates is near completely set. https://youtu.be/AG0vfRBGTXo Link
I suspect we are only weeks away from a couple more Scarbro type collapses.... RBNZ may slow down at that point
The bloke at BNZ understands.
11th Apr 23, 7:56am
'prices-in' seems to be an interesting term for 'gambling with the economic future of New Zealand'. Too many at the top playing chance with the lives of the majority
Interesting read over weekend was the Roger Douglas piece, I had no idea he wanted to reform even more across health and welfare. Wonder where we would be now if he had been able to do this.
Compared to the energy, dynamics and personalities around in parliament then, the lot of them we have there today, with only a few exceptions, are pretty pallid and inarticulate to say the least.
The other really smart initiative that Lange stopped was Douglas's proposal for proportional income tax aka "flat tax" (IIRC 20%).
There’s nothing intrinsically fair about progressive income tax regimes that ultimately derive from basic socialist envy.
A proportional tax regime is demonstrably fair (all income levels pay the same%), perhaps with a low income tax free threshold to acknowledge the net taxpayers charity
The Fed is going to have to hike really high to persuade people to adjust their inflation expectations. Once expectations go down, prices will follow..
What's wrong with this sentence? It is classic reckonomics. It sounds plausible, but there is zero evidence that this is what happens in the real world. In fact. every empirical study concludes that peoples' inflation expectations are equal to their estimate of current inflation. Our data in little ol' NZ shows exactly the same thing.
It is quite incredible that we remain in thrall to economic theories and models based on fairy dust and voodoo.
Well I do see some improving prices for some building materials, but for food items I doubt these prices will ever come down, maybe just the rate of inflation may fall back towards 2-3%. As long as the current gouvernement keeps giving beneficiease 7% increases inflation will not fall in NZ as actual workers will demand better see teachers and others ...... we are in a wage price spiral caused by Labour....
Made worse by immigration processing time of months, by which time the immigrant is working and living in aussie.
Chippie is only just reviewing the 7 day covid isolation rule. Most other countries dropped theirs 6months ago
He justifies it by saying that when school kids catch it, then the teacher does and they're off school. Yeah a gift 7 days paid and away from the toe-rags
its a very bloody circular argument.
Chippy needs to get up with the play "“exposure to young children was strongly associated with less severe COVID-19 illness.”
The (anecdotal) POV I know is that "paid 7 days off" is actually just working from home putting together lesson plans and online learning courses, reliever comms and assisting students virtually with I.T support. Teachers aren't allowed to get sick anymore, I think that's the direction we're heading. Nurses too for that matter.
So... pretty much the same as any industry with deadline and staffing pressure?
https://www.interest.co.nz/currencies/120708/us-treasury-yields-higher-…
The 2-year rate is now only 3bps higher than the pre-MPR level, with longer term rates lower. The market reaction suggests the RBNZ’s shock move has back-fired.
Hardly getting "bang for your buck" rising the OCR by 50bps and the 2 year rate rising by 3bps
The currency cross rates are saying the same thing too
Re-reading Roger Kerr's weekend report its clear the market is selling off the Kiwi and currently sees New Zilund going under. Collapse.
They'll hand the mess to un-Lucky Luxon
maybe a warning for the leveraged?
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