Here are the key things you need to know before you leave work today.
NO RATE CHANGES
There were no rate changes again today by 4pm. Keep an eye on the site after 5pm though. However, we suspect change activity will be muted until next week's RBNZ OCR review. But you never know ...
"THEY NEED A$23 BLN MORE"
UBS analysts today are estimating the the big Aussie banks may need as much as A$23 bln in extra core capital by 2017 once new international capital ratios are put in place. The two that are especially exposed are ANZ and NAB (owner of the BNZ). No wonder Mike Smith was squealing yesterday.
The number of people on welfare for the June quarter is the lowest since 2008, with sole parents leading the results. There are over 16,000 fewer people on welfare compared to June 2013, bringing the total number currently to 293,586. In 2010 there were 352,000 on the welfare rolls. New assistance programs for sole parents seem to be getting them back to work in substantial numbers.
The diesel pump price has fallen back below $1.50/litre, while petrol (U91) is now over $2.23/litre. The shift up for petrol is all because of higher taxes. Over the past four weeks, the price of crude has fallen NZ$6/barrel.
DAIRY PRICE FALLS
Today's USDA international dairy price monitoring confirms the recent Fonterra auction drop. There is a Fonterra board meeting in early August by which time we will know how far the payout will fall. Economists are vying with each other trying to guess the size of the drop. $6 seems popular.
The IRD is about to "work with" the New Zealand Thoroughbred Breeders’ Association on a number of tax issues raised by the industry.
WHOLESALE RATES
Wholesale swap rates fell sharply again today by another -2 to -7 bps in a strong flattening trend. These are on top of Wednesday's -9 bps fall. The 90 day bank bill rate was unchanged however at 3.65%.
OUR CURRENCY
In contrast to the swap rate falls, the NZ dollar has moved very little today although there was a faint softness detectable. It is now at 86.7 USc. It is at 92.7 AUc and the TWI is at 80.7
You can now see an animation of this chart. Click on it, or click here.
10 Comments
Houston, Texas - growth capital of the US. City Journal is always worth the occasional (it's a quarterly) peek.
... well , of course , if you're gonna be radical and look after jobs ... and cheap housing ... and the energy sector .... and welcome high quality immigrants ... then growth and prosperity are possibly going to break out ...
But here in NZ we have more important considerations ... providing tax advantages for our landlords ... and more welfare for the poor .... bringing back the Moa from extinction .... no more lipstick on pigs ...
Catchy little piece here from the Economist, DC.
Diesel price lower than petrol, duh. This happens everytime the government puts taxes up, to pay for it's motorway spending spree in the face of flat to falling traffic volumes. It will happen again on 1st July 2015.
While your statement might make people think it's now an even better time to drive a diesel car, in fact the tax penalty over petrol just got even higher.
What you fail to mention is that the separate road-user-charges for diesel passenger vehicles has gone up even more than taxes went up on petrol, in order for the government to have smaller increases / greater subsidies for the trucking industry. 6% increase in petrol tax, 6% average increase in RUC, comprised of 10% increase for diesel passenger vehicles, and as low as 2% increase for trucks depending on category.
NZTA estimate the tax increase is equivalent to $35/10,000km for a petrol car, while RUC has gone up $50/10,000km. Obviously the petrol figure depends on the efficiency of your vehicle. If you have a smaller petrol car, 6.5l/100km, then tax went up $19 vs $50 for diesel.
Yes, that's another source in difference between the pump price of diesel and petrol. The petrol price has a small ACC levy included, diesel doesn't because lots of farmers use diesel off-road and we all know they never have accidents. And so the yearly registration for diesel includes a larger fixed ACC levy than for petrol to compensate.
Basically if you have a small economical diesel, and don't do large mileage, you get doubly screwed by the tax system in this country. AA has been campaigning for years to level the playing field. I much prefer driving a diesel on the open road, but not sure i'd get one, it would have to be super economical to make up for the tax distortions.
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