Breakfast briefing: The French gamble

Economy / news

US inflation expectations stay up; Wall Street quiet ahead of CPI & Fed; Canada sentiment rises; why Macron is going to the polls; Aussie egg crunch; UST 10yr 4.47%; gold and oil rise; NZ$1 = 61.2 USc; TWI-5 = 70.8

11th Jun 24, 7:19am by David Chaston

Here's our summary of key economic events overnight with news the EU parliamentary election jolt has everyone's attention.

But first in the US, in the four months December to March, consumer inflation expectations held steady at 3%. Then in April they rose 3.3%, and this latest NY Fed survey shows them easing somewhat to 3.2%. They were unchanged at the three-year horizon at 2.8%, and increased at the five-year horizon to 3.0% from 2.8%. So its a mixed picture where these expectations are holding higher than where they need to be.

In a well supported 3 year US Treasury bond auction (US$140 bln was bid for the US$58 bln available), the median yield achieved was 4.59%, and that was marginally higher than the 4.55% at the prior equivalent event a month ago.

Wall Street is in a bit of a lull at present as they await the combination of the May CPI result and the US Fed monetary policy meeting outcomes.

In Canada, consumer sentiment is beginning to improve, especially after their central bank made a cut to its official interest rate last week.

In Europe, like many others, markets are recoiling at the EU parliamentary election results. And even more so, 'surprised' by the French reaction of calling a snap national election. But to understand both, you need to know that the EU parliamentary election featured low turnouts, some very low. That allowed motivated extreme parties to make some spectacular headline gains. But it wasn't all one-way traffic. Macron is gambling that a normal turnout in national elections will overwhelm the right-wing votes with more normal voting patterns as voters who sat out the EU version are 'shocked' into returning. We'll see.

In Australia, major supermarket Coles has imposed limits of how many eggs customers can buy after hundreds of thousands of chickens have been destroyed after bird flu was found at five large poultry farms. Prices are likely reflect these shortages, although the normal 'don't panic' notices have been issued.

The UST 10yr yield is now at 4.47% and and up +4 bps from yesterday. The key 2-10 yield curve inversion is a little less at -41 bps. Their 1-5 curve is also less inverted at -70 bps. And their 3 mth-10yr curve inversion is less at -89 bps. The Australian 10 year bond yield is still up +6 bps at 4.39%. The China 10 year bond rate is unchanged as usual at 2.32%. The NZ Government 10 year bond rate is now at 4.80% and up +11 bps from this time yesterday.

Wall Street has started its week with a modest +0.2% rise. Overnight European markets were about -0.3% lower, except Paris which dropped -1.4% on Macron's gamble. Yesterday Tokyo ended up +0.9%. Hong Kong and Shanghai were closed for a holiday. Singapore ended down -0.3%. The ASX was on holiday too. But the NZX50 ended its day down -0.6%.

The price of gold will start today back up +US$20 from yesterday at US$2313/oz.

Oil prices have risen +US$2.50 from yesterday and are now at just on US$77.50/bbl in the US while the international Brent price is just over US$81.50/bbl. So they are back to week-ago levels.

The Kiwi dollar starts today at just on 61.2 USc and up less than +¼c since this time yesterday. Against the Aussie we are little-changed at 92.7 AUc. Against the euro we are +¼c firmer at 56.9 euro cents. That all means our TWI-5 starts today at 70.8, and up +20 bps from yesterday.

The bitcoin price starts today at US$70,043 and up +0.6% from this time yesterday. Volatility over the past 24 hours has still been low at just on +/- 0.7%.

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127 Comments

by Sam Bridgman-Smith | 11th Jun 24, 7:39am 1718048376

I really enjoy the French, their culture, language and traditions. You can’t help but admire them. But you never know what they’re going to do next. They are passionate and unpredictable.

Did you know that in an effort to demonstrate the cleanliness of the Seine, the mayor of Paris and the President planned on swimming in it on the 23rd June? So protesters have organised a mass defecation event in the river on the same day.

#JeChieDansLaSeineLe23Juin

https://www.ndtv.com/world-news/paris-olympics-s-flashmob-french-protes…

Macron’s snap elections could backfire terribly for him because the French are unpredictable and love sabotaging their politicians.

by murray86 | 11th Jun 24, 7:48am 1718048882

Except that in a recent news article very high faecal content was found in water samples from the Seine. So best they swim in HazMat suits. should help with buoyancy.

I should add that when I was there a few years back I thought at the time that the water didn't appear to be all that clean. Not really a surprise considering where the river's track.

by Sam Bridgman-Smith | 11th Jun 24, 8:03am 1718049802

Yeah I don’t know how effective recent cleanup efforts have been.

I wouldn’t want to swim in there either. The same could be argued of some of our own rivers here unfortunately

by Flying high | 11th Jun 24, 8:49am 1718052597

Like which ones

by Pa1nter | 11th Jun 24, 9:06am 1718053593

Most regional councils have active maps highlighting river water quality.

by Sam Bridgman-Smith | 11th Jun 24, 9:12am 1718053955

Approximately one in three nationwide.

by Foxglove. | 11th Jun 24, 9:04am 1718053492

The point about a low vote turnout resonates with what happens in NZ local elections. Well motivated and organised minority groups can achieve far more of a percentage in the result than their actual percentage in the electorate.

by Zwifter | 11th Jun 24, 9:53am 1718056393

Never really forgiven them for blowing up the Rainbow Warrior myself, that and they cannot build cars to save themselves.

by Foxglove. | 11th Jun 24, 10:00am 1718056859

Recall Paul Keating sticking it to them in a speech over there, counting the dead Australian youth in their fields that fought WW1 for French freedom and in return, their gratitude equalled nowt. Quite a savage oration that one. One thing about Keating if you wanted something said so as to leave no doubt, then he was your man.

by interesting1234 | 11th Jun 24, 10:43am 1718059386

But come on....the wines and cheeses are to die for.

by HughJorgan | 11th Jun 24, 7:54am 1718049294

Very interesting to watch the news coverage last night and the anti immigration action around the world - Canada and France. Doubt we will get much here because people don’t appear to connect the dots. We keep getting told its growth.

by dumbthoughts | 11th Jun 24, 8:04am 1718049842

Don't forget the UK, where it seems that part of the repudiation of the useless Conservative party is owing to their utter failure to do anything to control immigration, hence the Reform party taking a lot of Tory votes if polling is anything to go by.

It seems that the Western world is waking up to the idea that mass immigration of dubious quality provides no appreciable benefit - and only downsides - to the average person. More competition for housing and scarce public services, depressed wages, and a wholesale change of the culture/society you had grown up in ... it's only rich business owners and asset holders who benefit, along with those lefty academic types who like the idea of dismantling any vestige of nasty Western culture to atone for the sins of naughty European people of the past.

The funny thing here being that the historically anti-immigration party (NZ First) seems to have all but abandoned that in favour of worrying about making Shane Jones' friends richer, and where you go number twos.

by powerdownkiwi | 11th Jun 24, 8:26am 1718051203

Great post. The masses are p---ed. Brexit and Trump are symptoms, as is any vote for fences. This happened in post-Weimar Germany, too.

In parallel, population is taking an interesting turn; the young appear to be voting with their (a)genders:

https://dothemath.ucsd.edu/2024/06/whiff-after-whiff/

Thought-provoking....

by Pa1nter | 11th Jun 24, 8:39am 1718051940

This happened in post-Weimar Germany, too.

Godwin's law, engaged.

by Foxglove. | 11th Jun 24, 9:36am 1718055361

If the trade unionists, the Social Democrats and the Catholics, the Centre Party had cooperated rather than simply concentrating on detesting one another then the need for a Godwins Law might not of eventuated? That it did is a good example provided by history of the merits of divide and rule.

by powerdownkiwi | 11th Jun 24, 9:54am 1718056447

Bollocks. You're shooting the messenger, to shoot the message.

Weimar Germany is a valid reference as to where an educated society goes when placed under stress. It has lessons to be learned - not to be avoided via (double) denigration.

by Foxglove. | 11th Jun 24, 10:08am 1718057324

wd.

by Pa1nter | 11th Jun 24, 10:30am 1718058604

Weimar Germany is an exception happening under those circumstances, not the rule.

Finding parallels with the Nazis around every turn, is peril.

Otherwise we can say the sorts of societal re-education you're promoting ultimately ends in shooting everyone with glasses, or working out a hammer to the head is the most cost efficient way to dispatch your political adversaries.

by Foxglove. | 11th Jun 24, 11:00am 1718060444

It is neither an exception nor exceptional. Have a read of Paul Johnson “Modern Times” and you will find those dynamics were present and fermenting in most of Continental Europe post WW1 and through the depression.

by powerdownkiwi | 11th Jun 24, 11:09am 1718060985

Bollocks again.

Many educated, art/culture/knowledge societies, have come and gone. We are running that experiment globally; it is reasonable therefore to look to precedents. I didn't mention the Nazis - but I do have a copy of Franz von Papen's Memoirs (the difference between us, perhaps; I research?).

That was a first-world society, well educated. It was cut off at the knees economically (by us, when you trace it) - and the repercussion are useful to note. Also note that 'allied' propaganda wroth the subsequent histories... blaming others for what Versailles sparked.

Interestingly, Macron saw it coming: https://www.lemonde.fr/en/politics/article/2022/08/24/macron-warns-fran…

"I believe that we are in the process of living through a tipping point or great upheaval. Firstly because we are living through... the end of what could seem like the end of abundance."

I know you need to obfuscate, but see if you can get past that, eh? Makes for clearer thinking.

by Pa1nter | 11th Jun 24, 12:52pm 1718067155

Many educated, art/culture/knowledge societies, have come and gone.

Ultimately, this is every society.

How many go out like Nazi Germany?

by dumbthoughts | 11th Jun 24, 8:42am 1718052174

Agreed re: Brexit and Trump. My take on Brexit (having some pro-Brexit UK family who are not particularly well off, and therefore aren't able to do the snobbish thing of waxing lyrical about the benefits of immigration and diversity while taking every step to ensure it is never experienced first-hand) is that for many it was nothing more than a de facto referendum on immigration - an opportunity to voice genuine frustration and anger on the issue.

The intricacies of customs law as it relates to the European Union and UK, or whatever actual other stumbling blocks, weren't in the frame of reference at all. To borrow from Eminem, it was "one shot, one opportunity" to voice across party lines a deep-seated, fomenting anger at wholesale changes to society and culture - as well as deleterious impacts on public services, jobs and housing costs, brought about by immigration that neither the Tories nor Labour (as far as I can tell) ever campaigned on, but simply allowed to happen presumably at the behest of vested interests.

That's why you saw the last election have the shift of traditionally Labour voters to the Conservative party, as those voters (perhaps stupidly enough) thought that the "Cons" would effectively take the will of the people vis-a-vis immigration and do something about it. Instead they've just disgraced themselves with endless scandals, and instead as far as can be discerned allowed immigration to reach its highest ever levels.

Some voters, therefore, will take the approach of "well at least with the Labour party we might get better public services" (not an unreasonable position to take I guess considering the appalling performance of the Tories) and others turn to the likes of Reform with more robust rhetoric.

My view, therefore, is that even though the UK is sort of bucking the European trend in the sense that it is all but certain a more left-wing party will be elected to government, the root cause of that is mired in the same immigration concerns as what you're seeing in France, Germany etc.

by interesting1234 | 11th Jun 24, 10:49am 1718059778

Having lived int he UK during the Brexit campaign and vote, I can attest to the campaign being so poorly carried out. The majority of it was focused around immigration, with the pro-brexit side constantly engaging with smaller towns that were small-minded and often outright racist (and I don't use that word lightly). The intellectual debate around brexit wasn't held as the expected standard of analysis either in the media or even in general conversation most people were just talking about immigration. I consider, given the outcome percentage of the votes that it was a failure, but that's not to say it won't pay off for the UK in 5-10years. It was always going to be short to medium term pain for long term gain, or at least that's what everyone was sold.

by The Person | 11th Jun 24, 3:53pm 1718078011

Having lived through brexit, the Brits who think it was a mistake are double the number who think it was a good idea

https://www.statista.com/statistics/987347/brexit-opinion-poll/

by interesting1234 | 11th Jun 24, 4:46pm 1718081180

The second those 3 pound tesco meal deals hit 3.50, the turn occurred XD

by murray86 | 11th Jun 24, 8:37am 1718051820

It's interesting that for years on this site people have discussed the relative merits (or lack of them) of immigration based economic policies based on the evidence that was openly and readily available. The biggest question always came back to why didn't the empowered x-spurts understand the same evidence and formulate policies that better served the country?

Self serving, corrupt politicians is a simple (too simple?) answer. But I think the advice and filters on the information available to them likely means they are not getting accurate information and advice.

by Pa1nter | 11th Jun 24, 8:41am 1718052076

Or, viable alternatives (especially fast acting ones) don't exist.

Robots?

Clones?

by Advisor | 11th Jun 24, 10:28am 1718058538

Politicians in the West are left with two choices to stimulate the economy:

1) raise productivity with widespread policy reforms in education, workforce training and tax plus invest billions in infrastructure

2) bring more working-age people into the country.

The latter is much easier and allows more fiscal headspace (more earners and spenders contributing taxes) to hand out election lollies to preferred voters.

#1 has been the go-to solution for decades in NZ, however this is no longer delivering GDP growth in a post-Covid world. I suspect there is no more road left to kick the can down.

by agnostium | 11th Jun 24, 10:35am 1718058917

Productivity and growth are the wrong objectives. We're seeing the consequences of limits to growth. The focus need to shift (should have actually always been) back to meeting core human needs, happiness and wellbeing, and the protection of our biosphere and natural habitat.

by Pa1nter | 11th Jun 24, 10:44am 1718059454

1) raise productivity with widespread policy reforms in education, workforce training and tax plus invest billions in infrastructure

This is obviously preferable, but way harder to accomplish. All those methods you mention have extremely diminishing returns, if they cannot generate a surplus, you have not actually advanced productivity.

There's still plenty of road. You've been somewhere like Mumbai or Colombo?

by powerdownkiwi | 11th Jun 24, 11:12am 1718061125

Plenty of road?

Productivity is energy efficiencies - the Laws of Thermodynamics say you're wrong.

There's ever-less road, ever quicker.

by Pa1nter | 11th Jun 24, 12:54pm 1718067271

Plenty of road?

You keep expecting a bang to round of a half century or so of middle income prosperity.

I think it'll be more of a long wimper.

by Advisor | 11th Jun 24, 11:55am 1718063742

Funny enough, Auckland sits higher on a global crime index ranking than both Mumbai and Colombo. Crime is generally worse in first and second-world cities that once had decent living standards and then saw a big decline leaving behind a big divide between its rich and poor people.

Case in point, a lot of cities from the American industrial heartland, South America and South Africa sit high up on that list. So Jo'burg is what Auckland could look like in a few years' time.

by Pa1nter | 11th Jun 24, 2:17pm 1718072263

You also have to consider the incredible difference in policing between the first and third world.

by interesting1234 | 11th Jun 24, 4:48pm 1718081298

I used to say that to folk back in NZ when in Central America. The shock in their voices when you explain that there are far worse crime stats in so many USA cities. Minus a couple of places in Honduras, those were pretty nuts.

by murray86 | 11th Jun 24, 12:51pm 1718067096

I don't agree that they are left with two choices. The systems we have and the politics which wraps around them are human constructs and define by human will. To argue "that is how the system works" or its converse simply demonstrates a lack of vision and will. there is a lot of data and arguement that the system needs to change, but no one has the will or vision to try.

#1 is closest to the required solution but it hasn't been done effectively or realistically before. #2 is a BS cop out for those too lazy to think and too afraid to try something different.

by Yvil | 11th Jun 24, 10:31am 1718058695

mass immigration of dubious quality (poeple) provides no appreciable benefit

I'd like to make a counterpoint. The largest "mass immigration of dubious people (many criminals and scoundrels) in history" is by far the immigration of mostly European people to the USA. That country is today, by far, the most powerful country in the World !

by agnostium | 11th Jun 24, 10:43am 1718059399

by Yvil | 11th Jun 24, 10:45am 1718059519

There is a saying in french:

"Nul n'est prophète en son pays" (people don't become prophets in their own country)

People who emmigrate to a new country have something very valuable in common; they are doers and risk takers. They do not stay in their home country, "eat popcorn" and complain. Most have a drive to make their lives better. This surpasses any qualification an immigrant might have.

by dumbthoughts | 11th Jun 24, 11:39am 1718062753

I get where you're coming from, and I'm sure that there is a strong element of many immigrants wanting to better their situation and that of their families.

However, I think there are a couple of contextual elements that are important to consider here:

Firstly, look at the 'Pilgrims' who settled the United States (assuming that's what you're talking about re: Europeans and USA) or the Australian settlers, or even consider the likes of the original Maori arrivals to NZ ... for these enterprising individuals they weren't arriving with the ability to benefit from existing infrastructure, there was no 'safety net' of welfare, or of widely-available public services to provide a backstop if things went wrong. If I recall from my studies at university, something like 50% of the original pilgrims to America didn't make it past the first winter. How many 'doers and risk takers' arriving into Auckland airport on a Boeing 787 face the same risk? If you arrive in NZ and decide after six months it's not for you, you can hop back on a plane and be anywhere in the world within 24 hours. Those pilgrim/settler/voyager risk-takers had to make it work as there was probably no way home. The context is so different I don't think it's comparable.

Secondly, as harsh as it sounds, to what extent do we "owe" those in a less fortunate position (for whom even a menial job and very modest living in NZ might be a vast improvement on their current lot) an opportunity for better, when we don't already take good enough care of those born and raised here, and particularly if the new arrivals have the impact of potentially negatively impacting those already here through competing for housing and public services, and also being willing to work for less/put up with worse conditions.

by mfd | 11th Jun 24, 10:58am 1718060311

Not to mention the crowd that went/was sent to Australia...

by Houses Overpriced | 11th Jun 24, 8:17am 1718050655

The bnz seek job ads report is painting a very bleak picture ahead..

I feel the housing market shudder, before a possible eruption...

by IT GUY | 11th Jun 24, 8:27am 1718051274

Companies are firing not hiring , it’s bleak

by Piggy | 11th Jun 24, 10:13am 1718057626

Is there a new report out? I can’t find it. Last one released was for April.

by Houses Overpriced | 11th Jun 24, 2:38pm 1718073532

It's weird why they don't link it to their dashboard straight away

by Silvi | 11th Jun 24, 8:24am 1718051077

The timing of the French elections make it all very interesting landing a few days before the beginning of the Olympics. The country will have the boost of all the sportspeople and later tourists. Always vibrant but even more so this time around maybe?

by JohnfromtheTron | 11th Jun 24, 8:36am 1718051802

Maybe the egg shortage in Australia will stop the flow of Kiwis moving over the ditch down.

by Retired-Poppy | 11th Jun 24, 9:32am 1718055159

It could also scramble peoples hopes of cheaper KFC too. Events out of left field such as this seem to be becoming the norm. Infection of the food chain with the added risk of jumping to humans. This is a serious risk not only to inflation but our health.

by IT GUY | 11th Jun 24, 9:40am 1718055628

They are culling small (very small) numbers of cows in USA infected with bird flu, most recover but a small number do not

by ChrisOfNoFame | 11th Jun 24, 9:15am 1718054131

Remember when I said the only way the NACTF's tax cuts could really be 'targeted at lower income families' - like they claimed it was - was if the upper tax brackets were raised to compensate? Yeah, well, it was crock then and has been shown to be a crock of sh-- now.

https://www.nzherald.co.nz/nz/politics/christopher-luxon-says-low-and-m…

Snippet:

Auckland University Professor Susan St John, an economist who researches child poverty, said she was concerned that the poorest households receive so little from the package.

She was particularly concerned that the Treasury analysis showed 55 per cent of the cost of the scheme flowed to the top 40 per cent of households, while considerably less than 10 per cent flowed to the bottom 20 per cent of households.

The 55 per cent figure includes all income-lifting measures directed at low and middle-income households, like expanding full eligibility to the $10-a-week Independent-Earner Tax Credit (IETC) all the way up to people earning $66,000 a year, and a $25 a week increase to the In-Work Tax Credit (IWTC), a payment made to low- and middle-income families with children who are in work, and the FamilyBoost childcare tax credit.

The Treasury figures, included in a Regulatory Impact Statement, do not include the cost of reinstating interest deductability for residential landlords.

St John said that if you included this, and assumed that the main beneficiaries of the change were the top 40 per cent of households, then about 64 per cent of the cost of the scheme flows to the top 40 per cent of households, while the bottom 20 per cent get just 5.4 per cent.

About 130,000 households receive nothing from the package and 8000 are slightly worse off.

But because the majority got something ... they look the other way and say nothing. This is why the rich get richer.

But let's be even clearer about this ... The NACTF borrowed money that everyone will need to pay back (actually pay interest on because it never seems to get paid back) to give to ... rich people!

Have we been conned? Clearly we have.

by JimboJones | 11th Jun 24, 8:51am 1718052689

It wasn't about the poor, it was about the "squeezed" middle. And fair enough too, the middle has had their tax burden increase for a long time now.

by Pa1nter | 11th Jun 24, 9:08am 1718053704

Ayup. I don't know why Chris keeps expecting tax cuts to deliver for the poor and aged. That has to come in the form of increased benefits/pensions. Which usually aren't compatible with tax cut regimes.

by ChrisOfNoFame | 11th Jun 24, 9:18am 1718054302

So you're saying it's fine to lumber more debt onto the "poor and aged" so the wealthier get tax cuts?

That what you're saying, right?

by Pa1nter | 11th Jun 24, 9:28am 1718054902

That's probably how you choose to view most of my posts, sure. If you are the saviour of the broken, the beaten and the damned, and I critique some of your views, clearly I'm a monster who hates the poor's.

Just pointing out that not every policy's aims are to directly benefit the aged and unfortunate. Tax cuts generally favour those with full time income, so you couldn't assume those with hardly any income will benefit from them in a substantive way.

by ChrisOfNoFame | 11th Jun 24, 10:24am 1718058251

"... so you couldn't assume those with hardly any income will benefit from them in a substantive way."

So you're still saying it's fine to lumber those "with hardly any income" with more public debt? ... While the bulk of what has been borrowed is routed directly to the upper middle and above?

by JustAnOpinion | 11th Jun 24, 10:16am 1718057769

Who do you think will have to pay back that debt... I'll give you a clue, it isn't the poor....

by ChrisOfNoFame | 11th Jun 24, 10:22am 1718058161

So you're saying those that just got the bulk of borrowed money will need to pay it back?

Do you think they ever will? (rhetorical question obviously based on the last 30+ years.)

by JustAnOpinion | 11th Jun 24, 10:33am 1718058788

I am not sure how my comment was confusing but yes, I am saying the taxpayers who get slightly more tax relief in these measures (mostly due to them paying more/any tax in the first place) will be the ones, the only ones capable, of paying it back.

Will they ever pay it back is another question, if anyone ever will it can only be them as, and I'll just say this one more time, the poor pay almost not tax what-so-ever so they are not part of this equation in any regard.

by ChrisOfNoFame | 11th Jun 24, 12:22pm 1718065338

"Will they ever pay it back is another question, if anyone ever will it can only be them as, and I'll just say this one more time, the poor pay almost not tax what-so-ever so they are not part of this equation in any regard."

It's worth pulling that contorted logic apart. Some facts:

1. If the last 30 years is any guide - there is no question like you pretend - it won't be paid back

2. Meanwhile, we all - yes all of us, rich and poor alike - must pay the interest on the borrowed money of which the wealthier received the lion's share.

3. Why do you believe it is only them? Is it because they'll be taxed more to pay it back? (lol) Or do you believe only they - on the backs of all workers that didn't get a tax cut funded by borrowing - can generate enough taxable revenue to see it paid back? Further, what happens if the NACTF continue their program of slashing and burning public services? Will it still be only them? Or will it be all of us?

4. It is true the very poor pay very little income tax. But they pay GST, and proportionately more than everyone else. The remainder of the working poor have their incomes topped up by tax credits but their then inflated incomes pay income tax at the same rates as everyone else. And they, like the very poor, pay GST, and proportionately more than everyone else. Did these working poor - lets say the bottom 60% - get the same tax cuts as the top 40%? Why, no they didn't.

" ... so they [the people who got tiny tax cuts - about 60% of us] are not part of this equation in any regard."

Really? So you're saying the government should only represent the top 40%?

by JustAnOpinion | 11th Jun 24, 2:43pm 1718073820

Almost none of what you have written is true.

1. Most debt has a repayment life-cycle otherwise it would be a gift and it is not. Therefore we are constantly paying back debt.

2. I give up. It appears that you will not understand that the poor pay almost no tax. They therefore cannot pay back debt.

3. See above.

4. The very poor may pay GST but this will be more than off-set by lack of any other tax and probably benefits given to them

The government represents us all, but if we were all equal we would all pay the same amount of tax. News flash - we do not. The poor are very, very, very well looked after here comparative with most of the world. That is not an issue, it's just the constant whining of bewildered social justice warriors gets a little tiring.

by ChrisOfNoFame | 11th Jun 24, 4:10pm 1718079015

Right back at you JaO - Almost none of what you have written is true.

1. For the last 30+ years government debt has only increased, i.e. old debt is rolled over with new debt. The interest expense remains continuous.

2. The poor can help to pay back debt when their benefits are either reduced, frozen or elidgibility is removed. I.e. less is paid to them and the monies used to pay down debt. At least that's the story those on the Right tell ... Funny though - that never actually seems to happen even though the NACTF and their ilk campaign on that very lie.

3. Answered above.

4. GST is a regressive tax. PAYE is a progress tax. Regressive tax disadvantage those on low incomes irrespective of how they get the income.

"The poor are very, very, very well looked after here comparative with most of the world." ... Would you care to start the comparisons with Scandinavian countries or European ones? Or were you comparing us with countries like Bangladesh?

by interesting1234 | 11th Jun 24, 4:53pm 1718081623

I'll add that the government is supposed to represent us all, but in reality it represents the wills of the majority of those who votes those currently in power into said power. It does not represent those that didn't vote in a way, which is why it is vital that every citizen votes to ensure the most accurate representation of the public will is displayed and represented in parliament.

by Pa1nter | 11th Jun 24, 10:34am 1718058848

So you're still saying it's fine to lumber those "with hardly any income" with more public debt? ... While the bulk of what has been borrowed is routed directly to the upper middle and above?

I haven't said that, no. You have, twice now.

by huttman | 11th Jun 24, 9:49am 1718056167

I am not sure if the middle class, or upper middle class can be called wealthy.

by ChrisOfNoFame | 11th Jun 24, 9:58am 1718056705

The word I used was wealthier.

(Wealthier a comparative adjective. Meaning having more 'wealth'. It does not mean 'wealthy', an adjective meaning 'having a great deal of money, resources, or assets; rich')

by huttman | 11th Jun 24, 11:41am 1718062865

fine, then I assume it's perfectly okay to be 'Wealthier', and should not be seen as something wrong with being wealthier, nor should anyone feel entitled to share their wealth because they are 'Wealthier'.

by ChrisOfNoFame | 11th Jun 24, 12:24pm 1718065446

Nothing wrong with being wealthier.

But I note - once again - you don't seem to have any opinion about whether borrowing money to hand the bulk of the borrowed money to the top 40% of wealthier people in this country is right or wrong. Why is that?

Perhaps you're experiencing some cognitive dissonance? Tell me, how does it feel?

by Roger the dodger | 11th Jun 24, 9:20am 1718054412

I dont understand why these lefties are not furious at the previous govt. Instead they are railing against a tax bracket adjustment that helps the workers they are supposed to be standing up for. I mean the ones in NZ, not the ones in Gaza (oops I said it out loud)

Unlimited money printing, unlimited mandate, a leader who knew the path she wanted to take and yet they failed to move the needle on poverty.

They manufactured poor in their socialist engine and packed them into motels.

If their ideas were actually sound we would be on the way to being a rich country by now.

We all know they failed and therefore we know we have to try something different. Not really hard to figure out is it?

Douglas Adams had a plan for them. Golgafrinchan.

We are gonna need a bigger rocket.

by Pa1nter | 11th Jun 24, 9:29am 1718054987

I'd agree, but then I'd also question Nationals approach also. Neither have shown a sustainably good history.

by ChrisOfNoFame | 11th Jun 24, 10:15am 1718057751

Left block = borrow - because poorer people should be able to lead dignified lives

Right block = borrow to give wealthier people more money - because of ideology?

Which do you feel most comfortable with, Pa1nter?

by Pa1nter | 11th Jun 24, 10:54am 1718060091

Why not make a bit more selectively worded?The extremes of either are equally uncomfortable for me.

I don't have a problem with the state helping those in need. Then again, I don't see a more cost effective way for the state to house those in need, in the time-frames required, than having to part subsidize private landlords.

I'm all for radical reform of our housing policy. Fundamentally we just don't generate housing affordably. Resolve that, many of these other problems go away.

by ChrisOfNoFame | 11th Jun 24, 10:59am 1718060364

So you want to turn my original comment about tax policy into yet another ill informed discussion about something completely different?

Please remove your comment and make it elsewhere.

by nigelh | 11th Jun 24, 3:36pm 1718077005

Suggest the following re-phrasing. The right borrow but the left borrow much more.

by ChrisOfNoFame | 11th Jun 24, 4:12pm 1718079128

Sadly, not true. They're as bad as each other for borrowing. The last 50+ years proves it.

The key difference is who benefits from the borrowing.

by ChrisOfNoFame | 11th Jun 24, 9:31am 1718055104

Not a 'leftie', Roger. But are extremely keen on fairness.

I am indeed 'railing against a tax bracket adjustment that helps the workers (a euphemism for wealthier people as the article clearly points out) they are supposed to be standing up for." Why? Because only a fool - or people trying to justify their entitlement - believes such trite nonsense. Which are you?

Because the tax cuts were paid for by borrowing on behalf of everyone ... To hand to a few - including the upper-middle who got heaps and heaps more than the lower-middle.

Fair? Or outright theft? Isn't it called theft when you take something from someone without their express permission to give it to another (including themselves)?

by Noncents | 11th Jun 24, 9:51am 1718056270

Yet the lower got heaps more than under Labour? so are you saying we should have left it as it was?

by ChrisOfNoFame | 11th Jun 24, 10:03am 1718057025

"Yet the lower got heaps more than under Labour?"

Did they? You know that? Or is it a 'reckons'?

That aside - So what you're saying because money was allocated to poorest amongst us so they could lead dignified lives that makes it completely okay in your book to borrow on behalf of everyone to hand the bulk to the upper-middle and above?

That's what you're saying, right?

by Noncents | 11th Jun 24, 10:19am 1718057951

If borrowing gives more money to the masses (which it has) then yes, do that. Better than repeatedly fleecing the masses and wasting it on MPs wellington digs.

by ChrisOfNoFame | 11th Jun 24, 10:31am 1718058703

"If borrowing gives more money to the masses (which it has) then yes, do that. "

It has NOT. Re-read my original post.

The top 40% got the bulk of the borrowed money.

Did the lower 60% agree to borrow money to give it to the top 40%?

by Noncents | 11th Jun 24, 1:00pm 1718067636

Did the lower 60% agree to borrow money to give it to the top 40%?

Everyone had a vote.

by the Joneses | 11th Jun 24, 11:22am 1718061730

Any proof that they are spending less on themsleves?

Luxon still found money for upgrading Premier house, though he is not quite so entitled these days.

And there are still 20 MP's who rent their own properties to themselves (mostly National MPs). I wonder how they set the rent level for themselves?

So all that, and they still borrow for tax cuts.

by ChrisOfNoFame | 11th Jun 24, 9:37am 1718055427

Tell me, Roger. If a government borrows money to hand out to people ... Isn't that a form of welfarism?

By golly! It is!

Isn't that exactly what your rant is about? Golly! It is.

(I think there's a word for this ... Is that word hypocrisy? Why yes. I think it is.)

by HeavyG | 11th Jun 24, 11:39am 1718062742

How brave of you to kick a people suffering a genocide while they're down. The $17m we give to stave of a famine orchestrated by our allies isn't really the straw breaking NZ's budget woes. The $300m NZ blew in Afghanistan and $63m in Iraq killing civilians for no return would've been a better saving. If you want out you don't need a rocket, just a one way ticket to Israel.

by ChrisOfNoFame | 11th Jun 24, 9:20am 1718054413

So you're saying it's fine to lumber more debt onto the everyone so the 'squeezed middle' (who are actually doing pretty okay) get tax cuts?

That what you're saying, right?

by IT GUY | 11th Jun 24, 9:31am 1718055084

Yeah its crazy, but its what the people voted for....

Democracy - you understand the principal ?

Maybe once we are back in surplus we can discus benefit increases

by ChrisOfNoFame | 11th Jun 24, 9:45am 1718055955

People voted to give the upper-middle way bigger tax cuts ... by borrowing money to do it - than to the lower-middle? Seriously?

To even claim the bulk of the voters did is pure nonsense.

by refactornz | 11th Jun 24, 9:59am 1718056775

$20/week is not a big tax cut

by ChrisOfNoFame | 11th Jun 24, 10:09am 1718057378

You're being fooled by the use of averages. It's a classic politician's trick.

"A couple with no children at home and a combined income of $180,000 will be in line for fortnightly tax relief of $80.19 [per week] or $2085 a year."

https://www.stuff.co.nz/money/350295653/5-households-5-very-different-t…

by JimboJones | 11th Jun 24, 10:24am 1718058293

The couple on $180,000 pay at least $41k in tax a year, so of course they get more of a tax cut than someone who pays much less tax.

by ChrisOfNoFame | 11th Jun 24, 10:34am 1718058897

Let me fix that for you using some facts.

"The couple on $180,000 pay at least $41k in tax a year, so of course we borrow more so they get more of a tax cut than someone who pays much less tax but is still responsible for paying back the debt."

Damn facts, ay? They're a bitch.

by Zwifter | 11th Jun 24, 10:40am 1718059238

Fact is a couple on $180K do not need a tax cut in the first place. Tax cuts should have gone into the first $18K you earn and make that tax free and move the brackets up and tax the higher brackets more to offset it. People earning $18K are having a much harder time surviving than those on $180K.

by refactornz | 11th Jun 24, 10:58am 1718060329

People earning $18K are having a much harder time surviving than those on $180K

A good chunk of those who are earning $18K will be students living at home with mum and dad. Mum and dad's $180K won't go far after mortgage and family costs.

by ChrisOfNoFame | 11th Jun 24, 12:40pm 1718066407

"A good chunk of those who are earning $18K will be students living at home with mum and dad."

Most parents of students don't earn anything like $180k per year.

But I digress ... My example above "A couple with no children at home and a combined income of $180,000 will be in line for fortnightly tax relief of $80.19 or $2085 a year" involved a couple with no children.

But a couple with two kids earning an average income gets just $37 per week?

I guess I should thank you pointing out exactly the point I am making.

by refactornz | 11th Jun 24, 2:30pm 1718073001

I'm not sure what your point is. That couple on the average income get a higher percentage tax relief than the couple on $180k. The tax band changes are very much aimed at middle income earners.

by ChrisOfNoFame | 11th Jun 24, 4:27pm 1718080040

So how come a couple with no kids earning way above 'middle income' get a tax break - paid for by borrowed money - when the government said they were aiming the tax cuts at the middle? That's piss poor aim in my book. (Actually they didn't aim at all. They were always going to do this.)

Think about it another way - the tax cuts that this $180k childless couple got - paid for by borrowed money - could have paid for more people in 'the middle' to have gotten tax cuts, or bigger tax cuts.

The article says "About 130,000 households receive nothing from the package and 8000 are slightly worse off." That makes 138,000 households who are squeezed more than the $180k childless couple.

Or perhaps you believe those 138,000 households are undeserving? In which case - why even borrow more when the National party is claiming we must return to surplus? (And overseas credit agencies are saying we must return to surplus ASAP.)

by JimboJones | 11th Jun 24, 11:07am 1718060835

Why give tax cuts on the basis of need? A household doesn’t earn $180k PAYE without working fairly hard, and these days you don’t live a particularly amazing life on $180k with kids and a mortgage. $180k is about the income of two teachers or nurses. Should their tax burden keep growing forever until they need a tax cut because they are poor?

by JimboJones | 11th Jun 24, 10:42am 1718059369

You can use the same argument for any government spending. We borrow for NZ super, welfare, health, roads, winter energy payments, etc. I feel like I’m getting a worse deal than the poor; I pay heaps of tax and I still get the government debt and I don’t get much in return except a crap health and education system for my kids.

by Pa1nter | 11th Jun 24, 10:46am 1718059598

To even claim the bulk of the voters did is pure nonsense.

If 20% of the population are deemed poor, why would you expect democracy to deliver favourably for them?

by the Joneses | 11th Jun 24, 11:45am 1718063152

Don't you know? Democracy is a perfect system that only happens once every four years.

Everyone who voted 100% liked everything on the list of ideas their party posted in the election. Everyone is perfectly catered for, from the transgender libertarians, to the environmentalist small business owners and disabled conservatives. Everyone who votes for a party also of course loves any and all changes to the elected governments plans made after the election.

Everyone voted, and now the Government can do whatever they like and nobody can complain about it. /sarc

by JimboJones | 11th Jun 24, 9:35am 1718055302

Is it a tax cut, or is it a small adjustment to thresholds to account for years of inflation?

If they never gave such a "tax cut", we would eventually have an almost flat tax system where the rich pay the same tax rate as the poor. Minimum wage earners are already very close to paying the old middle class tax threshold.

Also keep in mind that a lot of the middle have young kids. So while they may have an OK income, there isn't actually much left after paying for childcare, school stuff, food, etc.

It is impossible to have a society where poverty doesn't exist (except maybe through very good luck like large oil reserves). If everyone could live a good life without making any effort, why would anyone make any effort? Eliminating poverty is essentially eliminating capitalism, and that will make us all worse off.

by ChrisOfNoFame | 11th Jun 24, 9:41am 1718055716

Obfuscate all you like, but tell me ... Why aren't you addressing the fact that the government borrowed - on behalf of everyone - to hand the bulk to the upper-middle and above?

That's welfarism for the wealthy. Pure and simple.

And because it wasn't justly distributed ... It becomes theft.

by JimboJones | 11th Jun 24, 10:19am 1718057996

They also borrowed for benefit increases, super increases, winter energy payments, minimum wage rises, social housing, etc. I didn't get anything, so is that also theft?

by JustAnOpinion | 11th Jun 24, 10:20am 1718058036

You seem confused about who pays the tax the government is disbursing. The bottom ~50% of income earners pay ~8% of the tax.

Is it unjustified to give back some of the tax to the people who actually pay it? Should it be given to those that pay almost no tax? Strange that you think it should.

by kiwikidsnz | 11th Jun 24, 11:12am 1718061128

CONF isn't confused, he's just driving his own blinkered agenda again. 60% of NZ households pay no net income tax after transfers.

by JimboJones | 11th Jun 24, 11:55am 1718063733

Is that a recent stat? What are these transfers? WFF can't apply to many these days...

by ChrisOfNoFame | 11th Jun 24, 1:15pm 1718068504

Kiwikidsnz loves talking about "income tax" while pretending that's the only tax in NZ.

They ignore facts like a) we all pay GST, fuel taxes, duties, etc. etc. and the lower incomes pay proportionately more of these taxes and b) that many of these 'transfers' get immediately "transferred" to landlords and other rentiers. (We used to pull them up on this b.s. but now we mostly ignore them.)

(Just quietly, the charity https://www.kiwikidscharity.org.nz/, probably wishes this poster would change their name.)

by kiwikidsnz | 11th Jun 24, 1:46pm 1718070403

The comment I responded to was about income. I dont ignore other taxes when relevant.

I note they registered their charity in 2020, whereas I've had my email since the 1990s.

by kiwikidsnz | 11th Jun 24, 1:55pm 1718070901

by the Joneses | 11th Jun 24, 12:04pm 1718064268

OK, but income tax is only about 65% of the government revenue, so that point you keep raising is not really telling the whole picture.

Also, how much of that income tax is from rent income from those 'non-income tax payers'? In whose bank account do those 'transfers' really end up?

I agree that income tax is too high for too few, but we might disagree in how to even the playing field.

by agnostium | 11th Jun 24, 10:29am 1718058582

I understand a respect your anger at the NACTNF. They are as far from a central right government as I've ever seen in New Zealand.

Luxon has thrown National principles under the bus in order to get into power. Worse National leader in living memory.

You won't get much joy from pointing out how National have betrayed the country on this forum.

Some people are so partisan to their party they are incapable of criticising their "own team" for fear that it will undermine their identity. This and the fact most of them don't actually understand how the system works So as long as they get thrown a bone they are happy for the steak to be eaten by the super rich and for those poorer than them to steal or die of starvation.

We are a super rich country (per capita) with massive opportunity that has gradually moved towards wealth being increasingly concentrated in the hands of fewer and fewer people. History tells us that this type of regime only lasts if it is accompanied by erosion of democracy and strong repression of those that lose out.

by JimboJones | 11th Jun 24, 10:38am 1718059093

I think that wealth effect will always occur under capitalism, the more money you have the more money you can make. But I can’t think of a better solution. The super rich that benefit probably don’t pay PAYE anyway.

In terms of National, I voted for Labour but I don’t really have an issue with the tax cuts. I’d prefer they used that money on infrastructure, but if they can’t do that then give it back to the people that earnt it rather than those who don’t.

by ChrisOfNoFame | 11th Jun 24, 10:46am 1718059597

"You won't get much joy from pointing out how National have betrayed the country on this forum."

True. Not directly anyway.

But I get enormous joy as selfish, illogical and/or easily fooled people expose themselves for who they really are trying to justify the unjustifiable. And these people are often the very same people lamenting the lack of social cohesion, crime, government debt, etc., etc. but experience no cognitive dissonance when they lament, even when they are directly or indirectly responsible for it.

by JimboJones | 11th Jun 24, 10:50am 1718059826

Chris do you really think the people paying PAYE are to blame? I’d say they are (in general) the ones being shafted the most.

by ChrisOfNoFame | 11th Jun 24, 1:10pm 1718068207

I am in no way blaming people who pay PAYE. Where on earth did you get that idea?

My ire is directly aimed at:-

1) a scumbag government who borrowed money that we all must pay back - to give the bulk of it to the top 40%

2) successive (gutless) governments that refuse to overhaul the tax system which results in workers continuing to pay far more PAYE tax than they should while others pay no tax on the incomes they receive from other sources.

by JimboJones | 11th Jun 24, 10:32am 1718058722

The main reason we have poverty in NZ is house prices / rent. Increasing the tax burden on the middle class forever is not the correct fix to that problem.

by delboy | 11th Jun 24, 11:16am 1718061409

House prices and rent are a major cause of poverty however I believe the other cause is a lack of education.

Unfortunately governments seem to think it’s ok to have a percentage of the population dumb.

by JimboJones | 11th Jun 24, 11:48am 1718063289

The biggest cause of low incomes is terrible parenting causing a lack of ambition. Education is mostly free to those who choose to use it. I don't know the solution to this problem.

But if you do have a low income, housing takes up a massive percentage of that income, often over 75% of it. And we have one of the highest minimum wages in the world. Wages / tax / benefits / food prices / inflation / etc are barely worth looking at compared to housing costs.

by agnostium | 11th Jun 24, 12:38pm 1718066300

"The biggest cause of low incomes is terrible parenting causing a lack of ambition."

2 points:

1 . The system we have relies on lots of people having low incomes, it is impossible under the current system for everyone to have high incomes, in fact it requires some people to be unemployed. Then we punish them for being unemployed.

2. Even if this were true, so what? Are people responsible for their parents parenting style? Should they be punished for the rest of their life for their parents approach?

by JimboJones | 11th Jun 24, 1:34pm 1718069658

"Should they be punished for the rest of their life for their parents approach?" - we are already giving them lots of our money in many forms - free health / education / power / benefits / transport / doctors / housing / etc. I wouldn't describe that as being punished.

If ambition becomes pointless because life will work out fine regardless, surely you end up with less and less ambition?

The system does not require some people to be permanently unemployed. In fact just a few years ago everyone was hiring, yet many people were still somehow jobless.

I remember seeing a photo in the Herald a number of years ago with a long queue of people going to a supermarket job interview. Almost every one of them was wearing jandles / shorts / etc. You can get decent cloths at the op shop or W&I would pay for them. They didn't really want the job, just the tick on their form that they tried. And why would you when you probably don't end up much better off working.

by rastus1 | 11th Jun 24, 11:54am 1718063698

Reducing the amount of tax already being paid (ie a reduction in the amount imposed) is not welfare.

They have just been allowed to keep a little more of their own income - a little less taken to fund the State (including the welfare system).

A reduction in theft perhaps.

by the Joneses | 11th Jun 24, 12:19pm 1718065180

The point was that we are borrowing for those tax cuts. Some taxpayers get the benefit now, and the countries taxpayers as a whole have to pay it back later, or pay the interest on it forever.

I am not sure what happened to everyone gnashing their teeth over Labour increasing government borrowing during Covid. It was clear proof that they ruined the country just six months ago. Now it seems very few are concerned, or seem able to even recognise government debt now.

And just a thought. If tax was theft, then would walking down the sidewalk be trespassing?

by kiwikidsnz | 11th Jun 24, 11:14am 1718061247

"Commerce Commission’s latest analysis showed retailers are quick to put fuel prices up but much slower to bring them down."

Who knew...

https://www.stuff.co.nz/nz-news/350306418/delay-dropping-petrol-prices-…

by JustAnOpinion | 11th Jun 24, 2:48pm 1718074087

The mighty Commerce Commission is in action yet again. Surely there are few more pointless organisations.

by agnostium | 11th Jun 24, 12:50pm 1718067024

Good to see the country is coming round to realise that Luxon is the worse National leader in living memory.

Has any leader anywhere ever enjoyed this level of support after "successfully delivering" on their 100 day promises and first budget?

Christopher Luxon’s net favourability is down 13 points on last month to -5% to put him behind Chris Hipkins who is up 4 points to 3%.

Both David Seymour and Winston Peters see drops in their net favourability from last month to put them on -18% (-11 points) and -19% (-14 points), respectively.

by kiwikidsnz | 11th Jun 24, 3:29pm 1718076593

Apparently the Coalition is not moving fast enough in delivering the changes voters gave them the mandate to do.

by ChrisOfNoFame | 11th Jun 24, 4:30pm 1718080229

And they are making changes that their voters NEVER gave them the mandate to do.

by interesting1234 | 11th Jun 24, 4:58pm 1718081881

Chris you must have some sore fingers after todays 26 comments of the 127 (at 4:56pm). Perhaps get some ice on those bad boys