Is the RWC helping or hurting?

Opinion: If the world cup is sucking money out of other businesses, what happens to the economy?

3rd Oct 11, 12:09pm by John Pagani

By John Pagani

Anecdotally I’ve talked to several retailers in the last week or so - a couple of them quite large - and they’ve all said the last quarter has been tough. I’m suspicious of anecdotes, but there were some signs in the latest June quarter figures - just 0.1% GDP growth. Has business picked up since then?

Those NZ$300 tickets and associated nights out put a big dent in family budgets and stadiums have been full, not all with overseas visitors.

Meanwhile, total credit card debt is fairly steady, so we’re not all borrowing to pay for the fun.

While bars and cafes have been enjoying a bumper month, every dollar that is going into rugby celebrations is not being spent on a new pair or shoes, lawn mowing or fresh curtains.

If this is right, then even with better-than-expected inward tourism numbers (95,000 visitors are now expected) the economic pulse from the world cup might turn out smaller than hoped. [pdf]

Meanwhile, there are signs that the Christchurch rebuild is going slower, partly because of insurance worries.

And frankly, if you have a commercial building and you get a pay out - do you wait years to get consents and rebuild in the uncertain CBD market, or take your insurance payout and invest in Auckland, with the potential for revenue to come in straight away?

This year’s budget strategy was based on growth to next year coming from Christchurch and the world cup.

"The Rugby World Cup will provide a boost to the economy in late 2011, and the rebuilding of Christchurch will significantly increase activity in 2012 and beyond. As this rebuilding gets underway, annual economic growth is forecast to rise to 4% in 2012/13,” finance minister Bill English hoped.

If those numbers turn out weaker than expected, then the result will be that we go back to where we were last year in Budget 2012 - more cuts to meet the deficit, and more promises of jam tomorrow.

That’s the concern the ratings agencies seem to have - that there’s no real sign of improvement on the horizon and no meaningful strategy to do anything about it.

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26 Comments

by andyh | 3rd Oct 11, 12:43pm 1317598994

A good mate who owns one of the top furniture retailers here in Nelson says business hit a brick wall a month ago..........

by The best statu… | 3rd Oct 11, 12:51pm 1317599471

The left often hark for a happiness index, this will be rating a 10 right now with the RWC. Also, Labour/Greens never give enough credence to how much the GFC affects finance/employment in NZ (as they are in opposition). 1999-2008 were exceptionally good times economically worldwide but most of the private debt was built up here (to cover non existent wealth creation) due to excess borrowing partly because Labour's social policy helped kill off the productive sector from 2005. The only growth was in government, the unproductive sector.

As far as I am concerned, if we bomb financially on the RWC we can blame Helen Clark for winning us the right to hold it if we are to measure in pure financial terms. This was well before we heard the tern Global Financial Crisis.

I can't wait until the next govt (National still) will start to cut Student Free Loans and WWF stuff to help with the deficit. Tax increase on PAYE should be near the last to be hit as this is tax on earned money, not freebes to bribe certain parts of the electorate.

Credit downgraded are because of the last 15 years, not the last 3.

by steven | 3rd Oct 11, 1:22pm 1317601320

PAYE increases would be a big pill to swallow, National wont do that easily.....they will try and can kick for 3 years, or even 6....so Labour will bring in a CGT and quite probably other taxes to tax ppl who are paying nil.....it will come it has to.

WFF, yes that's an awful mess forced in as a counter to Brash's tax cuts bribe to try and win 2005.....you can lay that at Brash's door step as much as anyone.

I think your opinion on our malaise is mis-founded....the private sector borrowed heavily and where is the great outcome from that? Surley if are so wise and they had borrowed to grow their business there should have been a clear and positive result, instead there is little...rather than grwoth of the public sector we are seeing teh self-destruction of the private sector brought on by bad management it seems....

Credit downgrade is due to private debt, so we the ppl borrowed and did badly with it...Govn debt was and is pretty minimal...and not an issue...

The GFC was forecast in the 1950s.....back then the bright ones could see and forecast about when Peak oil would be, this is the outcome.

regards

by goNZ | 3rd Oct 11, 12:51pm 1317599472

Dr Robinson says Labour has some good policies, but they're just not getting anywhere.

"I don't think that the Labour vote is going to start returning until after the election and if they change their leader," she says.

She says Labour will struggle around the 28 to 30 percent mark.

PS - any news from the Labour Caucus this morning , John? bit of panic setting in eh !

by steven | 3rd Oct 11, 1:11pm 1317600660

Nothing like a wee gloat is there....your assumption is what we will get will be better....thats not looking to good either.

regards

by Wolly | 3rd Oct 11, 1:22pm 1317601370

Is this the Pagani who said we should model the NZ economy on the way the French have buggered their own!

by Christov | 3rd Oct 11, 1:24pm 1317601498

Colonial Imperialism is frowned upon down these parts Wolly

by Wolly | 3rd Oct 11, 1:34pm 1317602048

Not by the French colonial imperialists....

by Christov | 3rd Oct 11, 1:37pm 1317602252

haHaHa Ha HaHa! so true Wolly ...just so true..Ha Ha

by Christov | 3rd Oct 11, 1:23pm 1317601394

Yes John ...I'll have a read of the RWC thread shortly but before I do I wonder if you can answer this for me...

Labour wan't us to come out and vote for them ....yes..?..(I assume)

And yet Labour cannot seem to reconize they have a leadership problem with some of the lowest polling since the inception of the Party.

Labour cannot seem to recognise they are recieving resounding signals to ...re-tool.

Labour have failed to show a decisive attitude to address what stares them in the face as an unmittigated disaster......

And they still want the voter to come out and give them a mandate......are they serious...? ...no really are they serious.......?

My first impressions would be ..Well if you can't recognise and address your own problems.....I certainly don't want you trying to fix mine.

by steven | 3rd Oct 11, 2:02pm 1317603740

The problem however is one of perception and charisma....not of capability...IMHO....we seem as voters to be that shallow. So you want a re-tool yet I see Phil Goff as being quite capable...I cant see anyone else who will repalce him either.

The recent polling seems to have got worse (probably) for Labour not sure if its JK's (false) promises aof un-realistic growth and jobs or ppls fears that Labour is not the party to have going into another recession.

regards

by Christov | 3rd Oct 11, 2:17pm 1317604637

Steven whether or not you see Phill as capable has little to do with it....!..voters shallow...? Politicians wrote the swim-safe shallow booklet.

My point is that Labour has consistantly poor polling on his watch ...combined with a small number of gaffs...mis-managed the Darren affair trying to show strength of ethic...spent weeks hobbling around having shot his foot clean off..!

And yet the caucus and party failed to act decisively....he's probably a decent ...good...hardworking....loyal...etc.etc.....man but he's NOT WANTED..!...now whats is so difficult about that ..the party...cannot see...? act on..?

I repeat they want us to give them a mandate based on what...?

by Colin Riden | 3rd Oct 11, 2:47pm 1317606426

Christov, I don't think it would matter who was in charge of Labour - they are not going to be forgiven in a single term for the damage done by three terms of Helen Clark. Labour's poor polling reflects Helen Clark's destruction the party. As a political party Labour is now a lost cause and needs to be replaced.

The National Party will likely find itself in a similar position after another term with John Key in charge - achieving in two terms the contempt of voters that took Labour three.

There should be good opportunities to create new political parties after the coming election. They need to be taken otherwise we will be truly stuffed.

by iconoclast | 3rd Oct 11, 3:00pm 1317607225

Last week when JonQuai blurted out "he never saw it coming", in reponse to the downgrades, I thought he has just written his epitaph and kissed his knight-hood good-bye.

by Christov | 3rd Oct 11, 2:58pm 1317607090

Appreciate your thoughts on it ColinR...and i probably agree on the it wouldn't matter who was at the helm....but then does that in itself not speak volumes about the naivety of Goff himself....

On a positive note i suppose you could say it was self sacrificing and taking one for the team

Go Team..! Yay

Now see that JohnP...see hoe engaging Colin is....is that not what's missing here...?

by steven | 3rd Oct 11, 3:06pm 1317607562

At the last election it was more like the voters wanted a change of face....I certainly dont agree on your comments on HC's damage...

New parties, yes plus voters have to get with it....the good showing of the Greens seems to indicate that something different is or was wanted but they seem to be swinging madly to the left.....

regards

by Christov | 3rd Oct 11, 2:24pm 1317605055

Still waitng JohnP......? unless you think the question is out of order...or silly...or too hard.

Because that's it isn't it ...!..it's just too hard for the Party..!..never mind we'll fix it after we lose ..it'll give us more credibility that way....hmmmm yes that's it, much better that way......candy assed P.C. groveling cowards....who the hell would want em next time either.

by steven | 3rd Oct 11, 1:58pm 1317603487

Retailers - well Placemakers just kicked of some good deals on Dewalt powertools.....I just saved $430 on a thicknessiser tool, 27% odd off....I had to pay cash but thats no biggee...50 to 60% deals off at Briscos seems to be the nrom now.

regards

by Christov | 3rd Oct 11, 2:06pm 1317603967

All righty Steven I'll bite...just what is a ..thicknessiser tool...?

I have a lot of building tools...but that one escapes me, unless it's a tool for measuring thickness in which case let Phill know where he can pick one up, and do a little positivity test at home.

by Andrewj | 3rd Oct 11, 2:11pm 1317604301

its one of those tools that graps your fingers and cuts them off just below your elbow.

by Andrewj | 3rd Oct 11, 2:14pm 1317604461

Im being a little disingenuous, sometimes it just sharpens the end before driving it through your midriff.

by steven | 3rd Oct 11, 2:47pm 1317606420

LOL.....if you are that dumb...but I think its actually safer than most other tools.....I mean you have to jamb some part of your anatomy under its head....unlike a table saw say that has a bare saw blade spinning.....

regards

by Andrewj | 3rd Oct 11, 4:59pm 1317614348

Just in case get a good first aid kit, may pay to buy some 'quick clot' too.

You will need a bandsaw, they are masters of the quick removal of fingers they don't even hurt, all you see are someones fingers on the table, and while you are thinking'who do they belong to' it dawns on you that a fret saw wasn't so bad after all.

by Christov | 4th Oct 11, 8:03am 1317668589

Worthy of something Crump himself would have said A.J....I had a good laugh...!

by steven | 3rd Oct 11, 2:38pm 1317605880

Hi,

A woodworking tool, it planes planks.....

http://www.youtube.com/watch?v=wvUDp967R7g

Im doing / going to do a lot of wood work at home, in the next 2 to 3 years.....finishing stuff........

But the point was the discounts flying about....25~30% substantial and seems regular...Placeamkers etc are like ghost towns....

regards

by steven | 3rd Oct 11, 2:25pm 1317605132

"If those numbers turn out weaker than expected," I agree on Chch...I dont think businesses will hang about.....Chch is un-economic to rebuild its only the "free" re-insurance money making it even vaguely possible.

About time someone sits down and figures out how much CBD a greatly shrunken chch really needs , plans it and greenfields the rest.....it can be build up later, if teh demand returns....

regards