What happened Wednesday

A review of things you need to know before you go home on Wednesday; mortgage market slows, rents slip, confidence falls, rates down, heavy income redistribution

28th May 14, 4:00pm by David Chaston

For Wednesday, May 28, 2014. <a href="http://www.shutterstock.com/">Image sourced from Shutterstock.com</a>

Here are the key things you need to know before you leave work today.

JUST ONE RETAIL RATE CHANGE TODAY
ANZ cut its 2 year 'special' mortgage rate to 5.85%.

MORTGAGE APPROVALS SOFT
The mortgage market is not setting any records at present. The latest RBNZ weekly monitoring data shows that volumes are down 11% and values are down 8% compared with the same periods a year ago. They fell from last week too.

APRIL RENTS UNCHANGED
Residential rent levels were similar to very stable in the latest data from the MBIE Tenancy Bond data. Christchurch 3 brm house rents slipped a bit however.

INCOME REDISTRIBUTION
"New data indicates New Zealand’s income tax and support system continues to provide significant income redistribution, with households earning more than $150,000 a year forecast to pay 74% of net income tax in 2014/15, compared with 58% in 2008/09." Believe it or not, that's the National Government skiting about how it is effectively redistributing income in New Zealand.

BUSINESS CONFIDENCE FALLS
The ANZ measure of business confidence in New Zealand was hit pretty hard in May, down over 9 points from +64.8 to +53.5, the biggest monthly decline in 2 years. The index on firms' own activity outlook showed a more muted decline of 1.5 points, and the move lower in the sub-indices was, similarly, quite moderate.

XERO HIRING IMMIGRANTS
Xero has taken to extending its recruitment efforts abroad as the company moves to sign-on at least 160 new developers in its Wellington and Auckland offices over the next year. It is targeting skilled IT professionals in the UK with offers of relocation packages for successful candidates.

WHOLESALE RATES SHIFT
Wholesale swap rates were down today, dropping one bp across the whole curve. But the 90 day bank bill rate rose 3 bps today and is now at 3.41%.

OUR CURRENCY
The NZ dollar rose this morning following the Fonterra payout announcement, but has lost all those 'gains' later in the day. The USD is at 85.4 USc, the Aussie at 92.3 AUc. The TWI is at 79.9.

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4 Comments

by dh | 28th May 14, 5:52pm 1401256366

And there was Nick Smith's "Foreign buyers and speculators are having no effect on the New Zealand market and my evidence is that the New Zealand IRD has no records of them paying tax to the New Zealand Government".

But we know this is the official government line, so for a lighter note from today

http://deadspin.com/nobody-wants-to-host-the-2022-olympics-1582151092

by two otherguys | 28th May 14, 6:40pm 1401259203

When you consider the following

IRD issues IRD numbers. To get an IRD number you fill in a form, you have to provide a copy of your passport which provides your date of birth, country of origin etc etc etc

IRD knows how much PAYE income tax you have paid over the past 30 odd years

Customs collects information on your nationality, country of citizenship, date of birth etc

WINZ has a lot of data on all its clients. They are not invisible.

WINZ knows how much WFF you have received over the past 10 years

WINZ knows how much rent assistance (if any) you have received

WINZ data matches with IRD and Customs

Stats NZ collects data on property sales

Local councils have names and addresses of owners of land and property

Transport NZ collects data on drivers and issues drivers licences which have your address, date of birth etc

Then there are the utilities, gas, electricity, water rates

All that data sitting in databases, waiting to be used. It's all there.

Just imagine the party Google would have if it could aggregate all that together

Now how hard would it be to run an SQL query on the following for each of the past 10 years on

(a) New arrivals

(b) By age, by nationality

(d) Length of time spent out of the country since obtaining IRD number

(e) How much tax they have paid since arriving

(f) How many properties they have purchased

(g) How many properties they have paid rates on

(h) How much welfare they have received

(i) how many do not have an IRD number

(j) how much in public health benefits they have obtained

(k) how many have not paid any income tax

Not hard to do - or is it?

by steven | 28th May 14, 7:14pm 1401261240

Depends....many databases would I assume still be isolated, ie different depts dont talk to each other share no common key/format. To run a SQL query You are going to need a common reliable key to search on.

As an example of how hard it can be, my father was banned from traveling to OZ because someone of the same name had a criminal record in OZ and was deported back to NZ. My father's name is actually longer but the OZ data base only record the first 10 or 12 characters so couldnt differentiate. That is then 1 database....imagine if the NZ police or NZ customs database 'simply" looked at the OZ one and prevented my father arriving for no good reason at all?

On top of that we were also going through a relatievly small scale database amalgamation project at work, just been abandoned x3 the budget blowout, 1/2 the original capability if it was ever delivered and 2 years late today. And that is just several databases with differing data in the same organisation, can you imagine across multiple organisations?

Now there is a new ICT thing the Govn is doing that might over 20 years allow this "simple" search.

I believe (I can be corrected here) that WINZ and IRD have got some sort of link going? not sure on its breadth and depth.

regards

by two otherguys | 28th May 14, 7:37pm 1401262656

Yeah, I understand all the problems with different data formats etc etc.

All I'm saying, is, the data is there

The comment was prompted by a recent recollection of a case about 20 years ago of a 35 yo taxi driver who had been driving taxis for about 10 years, declaring a taxable income of about $20,000 pa in each of those years

The IRD was doing a blitz on cash businesses, and it happened to be the time of the taxi industry, and they picked this guy up in the sweep

In this case the taxi driver had property plus assets exceeding $1,000,000 which he couldn't account for so the IRD assessed him for income tax on an assets basis

I'm just wondering how the IRD gets along these days where big numbers of $ are being sloshed around at high speed without any verifiable source

If you delved into it today, you would now have to feel sorry for that taxi driver