What happened Tuesday

A review of things you need to know before you go home on Tuesday; building records, job hunting up, horticulture saves trade, eyes on bank rules, swaps steepen, NZD flat

26th Jul 16, 3:59pm by David Chaston

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

TODAY'S MORTGAGE RATE CHANGES
No changes to report today.

TODAY'S DEPOSIT RATE CHANGES
No rate changes here either.

CONSTRUCTION BOOMS
Building activity is at record levels nationwide and is forecast to continue to boom in the latest National Construction Pipeline Report. This report shows annual construction activity across New Zealand has topped $31 bln, an all-time high, and is projected to reach $37 bln in 2017. The report shows residential construction is particularly strong and forecasts construction activity to remain stronger for longer as compared to last year’s report, with the boom continuing to 2021.

OUT LOOKING
More than three quarters of New Zealanders are on the hunt for a new job, with the number seeking new roles up by more than +20% on the first half of the year, according to the latest Hudson Report H2 2016 released today.

NEW DAIRY RULES
New regulations to strengthen the law around the treatment of bobby calves have been officially gazetted today and most will be in place for the 1 August Spring calving season.

KIWIFRUIT CAPS A GROWING SURPLUS
In June 2016, kiwifruit exports rose $105 mln which is +47% higher than for June 2015 to reach $331 mln. Overall, goods exports rose $109 million (+2.6%) in June 2016 to $4.3 bln. This helped keep the trade balance positive in June which was $127 mln and completes a string of six months where the trade balance has been positive. In June 2015 we recorded a trade deficit of $(182) mln. The six month trade surplus to June 2016 is the second highest it has been in five years - despite dairy being in the dumps.

KEY AUSSIE BANK FEES RULING DUE
A judgment in an Australian bank fees case, being closely watched in New Zealand, is due Wednesday. BankingDay reports the Aussie High Court, the highest court in the country's judicial system, will deliver a judgment on whether late payment fees imposed by ANZ on credit cards constitute "penalties" within the meaning of established precedent, and are therefore, unconscionable. Cases brought by the Fair Play on Fees group against NZ banks have been stayed pending the outcome of the Australian case.

SWAP RATES STEEPEN
Wholesale rates fell by -1 bps at the short end, rose +1 bp at the long end and are unchanged for terms 3, 4 and 5 years. NZ swap rates are here. The 90-day bank bill rate are down as well, down -2 bps to 2.28%.

NZ DOLLAR HOLDS
The NZD is currently at 70 USc, 93.6 AUc, and 63.8 euro cents. The TWI-5 is still at 74.1. These are just marginally firmer than the levels this time yesterday. Check our real-time charts here.

You can now see an animation of this chart. Click on it, or click here.

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

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9 Comments

by Stephen Hulme | 26th Jul 16, 7:04pm 1469516649

ACC poised to invest in Ruataniwha dam

State agencies are particularly busy at the moment crowding out the private sector from it's duty to invest. - I wonder why, is it because AMI is going the way of SCF and more?

by CJ099 | 26th Jul 16, 9:07pm 1469524028

Hey David any chance we can cover this major news story from Canada's BC regarding their spontaneous introduction of a whopping 15% property tax for foreign buyers! (Sounds very similar to Stamp duty).

Article: B.C. to bring in real estate tax on foreign buyers
http://www.ctvnews.ca/business/b-c-to-bring-in-real-estate-tax-on-forei…

Well I'm guessing those extra buyers will probably end up on our shores since we have no restrictions.
Oh and any chance we can get the latest figures on the number of Non-resident Investors influencing our housing market?

Apparently the Canadian Government got quite a shock when they finally investigated the influence of off shore buyers in Vancouver hence the drastic tax action.

In June alone they found a billion dollar worth of property transactions in five weeks!!
http://theprovince.com/news/bc-politics/premier-unveils-plan-to-tax-for…

by David Chaston | 27th Jul 16, 7:29am 1469561391

Thanks for the pointer. Have covered this is today's 90 @ 9.

by Penguin | 26th Jul 16, 8:24pm 1469521482

I am rapidly coming round to the fact that we need stamp duty across the board. In Germany and France they have a 5% stamp duty in place for more expensive properties. Interesting how in their market house prices are far more realistic.

by head_down_bum_up | 26th Jul 16, 9:42pm 1469526120

UK has stamp duty, hasn't done much to the London housing market. That tax just gets built in to the sales price. It's a nice earner for government but it is not a deterrent, unfortunately.

by Robt. | 27th Jul 16, 8:56am 1469566616

I'm wondering how we could determine whether or not a stamp duty would have a supressing effect on a housing market. If subsidies distort markets (which they do - that is their purpose) and if taxes can be regarded as reverse subsidies, then it seems logical that stamp duties must have some effect. Whether it would be enough to have any noticeable impact is another question.

by THE MAN 2 | 27th Jul 16, 9:23am 1469568204

Stamp duty would not reduce prices as it hasn't worked wherever it is in place.
Oz has got it and the market over there is far more expensive in the cities.
First home buyers would be further disadvantaged especially in Auckland and Chch.
Stamp duty and taxes are only ever wanted by people with no financial interest in housing.

by David Chaston | 27th Jul 16, 9:41am 1469569302

Actually, "people with no financial interest in housing" are exactly the ones we want making public policy in this area. That is because they do not have a conflict of interest, and can see the wider picture.

Sadly, there are relatively few public policy decision makers in this category these days. Housing and tax policy is being set by people with strong conflicts through widespread investment in "investment properties" which is one reason the tax law makes a distiction between 'income' and 'capital' gains, and one reason why 'capital' gains have strong tax advantages. All income (including short and long term 'gains') should be taxed in a consistent manner.

by notaneconomist | 27th Jul 16, 10:45am 1469573139

I would rather have a media that upholds the constitutional arrangement of the country as that would make most people in the public policy areas have completely different decisions to what they do now.!! Sadly relatively few within the media actually understand our constitutional rights and this allows people with very strong conflicts to widely manipulate the system for their personal advantage. Distracting people with stories of tax laws and tax advantages just keeps people from ever understanding the real problems........Get rid of the regulations and the problems will be resolved...........Have you ever wondered why the constitutional arrangement allows people rights in the first place??? It certainly doesn't put regulation first!!!