With inflation falling and employment steady, the RBNZ will be wishing for no-thrills budget

Public Policy / analysis

Monetary policymakers are hoping for a no-thrills budget that helps them dampen inflation

7th May 23, 6:00am by Dan Brunskill

Prime Minister Chris Hipkins at a podium

The path of future monetary policy will be partly decided by whether Chris Hipkins’ makes good on his promise to deliver a no-frills Budget that doesn’t exacerbate inflation.

The Reserve Bank of New Zealand (RBNZ) will likely end its rate hike crusade this month with one final increase to the Official Cash Rate in its May Monetary Policy Statement.

Recent data offers some signs that higher rates are cooling inflation but not to the extent that the RBNZ will be deterred from one last 25 point hike to reach 5.50%.

Consumer price index data for the first quarter of 2023 showed a decline in the rate of inflation—at 6.7% annually, down from 7.2%—although the improvement was mostly imported.

This was lower than forecast by the RBNZ, but not enough on its own to declare victory.

Labour market data released on Wednesday showed the unemployment rate holding on at 3.4% and private sector hourly wage growth up to 8.2% from 8.1%.

This was not such good news for the central bank, which had forecast a slightly higher unemployment rate and slower wage growth. It was, of course, good news for workers.

Taken together, the two data points don’t give much reason for the RBNZ to diverge from its plan to set the OCR at 5.50% and leave it there.

Stephen Toplis, BNZ’s head of research, said even then the central bank was unlikely to rule out the possibility of further tightening thereafter.

ANZ economists said while the slightly-stronger labour market wasn’t helpful for inflation, it wasn’t likely to lead to higher-than-expected interest rates.

“This very much a look in the rear-view mirror; and forward-looking indicators do signal waning labour market pressures over the rest of the year”.

The final instalment in this trilogy of data will be the government’s Budget 2023, set for release on May 18, which may also affect future monetary policy

No-thrills budget

Prime Minister Chris Hipkins’ pre-budget speech would likely have been moderately reassuring for RBNZ policymakers, according to BNZ economist Craig Ebert.

The speech committed to bring operating expenditure back down to near 30% of gross domestic product in coming years and promised the May budget would contain “no-frills”.

On the other hand, Hipkins ruled out any new tax changes, including a cyclone recovery levy which could have funded the rebuild without adding to inflationary pressures.

The Treasury has estimated the economic damage from the North Island floods and Cyclone Gabrielle could be between $9 billion and $14.5 billion, and add 0.4% to inflation.

Ebert said while Hipkins had ruled out “major” tax announcements, it did leave room for more minor tweaks to tax rates which could be inflationary.

For example, the Prime Minister has said income tax thresholds will have to be adjusted for inflation at some stage in the future. That would be more likely an election policy than a budget announcement, but would provide some economic stimulus if, or when, it happened.

Tax cuts of some sort would be almost guaranteed were National and Act to form a coalition government after October.

Ebert said RBNZ would be conscious of any potential stimulus, although it usually doesn’t factor anything into its macroeconomic forecasts until it is official government policy.

More relevant to the Monetary Policy Statement in May will be the actual spending levels contained in Budget 2023.

The path of monetary policy will be (ever-so-slightly) softened if Hipkins’ sticks to his word and the government can resist an election-year, lolly-scramble budget.

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120 Comments

by Neil21 | 7th May 23, 7:35am 1683401726

Make NEW houses under $1 million, zero GST rated.

by HW2 | 7th May 23, 7:58am 1683403109

That's a dangerous precedent setting move

Lamebour in its last throes will be making sneaky pledges that tie the country's hands

by Zwifter | 7th May 23, 9:35am 1683408913

That's quite funny, they will not even take GST off vegetables.

by interesting1234 | 7th May 23, 7:32pm 1683444760

If they did that, I can guarantee that many producers would increase their prices by a margin so that they would get more profit, and the overall cost wouldn't drop much at all at the grocer or supermarket.

by imhenry | 8th May 23, 8:27am 1683491251

Give that comment a rest

by chebbo | 7th May 23, 8:22am 1683404523

If they're not going to do an election year lolly scramble, then I have no idea what they're going to campaign on. It can't possibly be policy, nobody is going to fall for that again. They don't have the fear of COVID to frighten people into voting for them anymore, and Chippy the new lipstick is quickly wearing off, so they can't rely on personality politics this time either. They're going to have to find some very highly paid PR consultants to figure this one out.

by dumbthoughts | 7th May 23, 8:27am 1683404854

They can campaign on continuing their achievements in law and order, education and improving the health system.

by chebbo | 7th May 23, 8:31am 1683405101

Haha

by HouseMouse | 7th May 23, 9:42am 1683409320

You forgot their great progress on child poverty, Ardern’s biggest focus.

by dee_jee_emm | 7th May 23, 2:43pm 1683427390

Hey, ever since Jacinda became the Minister for Child Poverty, it's become much more widespread.

by kiwikidsnz | 7th May 23, 8:33am 1683405221

Labour are going to try a new approach & be honest this election. They will campaign on He Puapua, race based privileges, co governance/government, 10 Waters, envy taxes, curbing NZdrs basic human rights to eg free speech, social unrest, increased homelessness & poverty, education truancy & health failures...

by chebbo | 7th May 23, 8:41am 1683405686

"Labour: Because Democracy is Racist."

by Zwifter | 7th May 23, 9:36am 1683409014

The Chippy timing was perfect for National, just enough time to see that the new boss is the same as the old boss.

by pigeonbox | 7th May 23, 10:25am 1683411922

Oh be kind, this is our nuclear free moment

by RickStrauss | 8th May 23, 12:01pm 1683504096

So far the only election year lolly scramble looks like being National's lolly scramble for property speculators.

Labour will need to come up with something similar in handouts.

by IT GUY | 7th May 23, 8:06am 1683403614

Its got to be things they can fail on delivering in the future

Having failed to deliver on almost every promise in the past

I Think they will campaign on Cyclone Rebuild.

Solving world Famine

and Child Poverty

yeah they are stuffed maybe " Let's Do IT, this time....."

by Shaft | 7th May 23, 3:26pm 1683429967

Chipkins is desperate not to be a PM by proxy...

He will not target stuff he can't win like right white middle-class private sector people

The budget will be a big " fake it till ya make it" suck up to Maori, poor, health, education, police, ...

He will buy votes, to get in, then try and sell his way out of it

And it may well be succesfull. After all 30% of kiwis will slut themselves for a free bottle of "red" wine. And the swinging voters are to dumb to figure all the spin out!

by Pa1nter | 7th May 23, 8:15am 1683404159

If the inflation battle is in the immediate term

I don't think government can make decisions fast enough to have much impact.

by whakahokia mai | 7th May 23, 8:21am 1683404466

Come on Labour come on Labour. You can do it. Show some courage and introduce a capital gains tax to access all that untaxed income from the wealthiest end of the spectrum. The timing is right with the attention of the electorate squarely on this issue from the release of the IRD report last week. Do something that is morally right for a change. The people are right behind you on this.

by HW2 | 7th May 23, 8:37am 1683405436

You have probably said yourself that house prices won't increase in the next half millennia. So why bovver the ghost of CGT

by Pa1nter | 7th May 23, 9:30am 1683408641

We want reparations for being born in the wrong decade.

End of the day, unfortunately the boomers are an over represented voting block. I think that would have to change before any serious political energy went into something like a CGT. Either that or the brightline test will just keep morphing till it's the same thing.

I reckon 15-20 years.

by Zwifter | 7th May 23, 9:42am 1683409348

Good luck with that. There was some Māori on TV the other day due to all this current colonial suppression and we are back to talking about 150 years ago. When he was asked about what the problems are related it to it TODAY he couldn't come up with an answer. It was sickening to watch.

by Pa1nter | 7th May 23, 9:58am 1683410292

To be honest I think there's a much longer historical story at play.

The West Europeans held the rest of the world's head in the toilet for centuries, while they stole everyone's stuff. It's 10s or even hundreds of trillions of dollars.

That's financed a way of life enjoyed by many around the world. Many of the world's largest multinationals were bankrolled by it. Our political institutions are partially in these entities' pockets.

But the gains have been spent and the rest of the world is catching up.

by whakahokia mai | 7th May 23, 10:32am 1683412334

Looking at the coronation last night and I couldn’t help wondering as to the origins of all that material wealth on display. The misery that was engendered to secure the goods and services to appropriate those gems and gold. Then when the cameras padded to the the gallery there stood the aristocracy of the UK. The inheritors of of the wealth of the slave owning families over many centuries. Who built those beautiful houses off the backs of slaves originally then the working classes. The most successful historical and ongoing stripping of wealth from the planet and we stand on the sidelines applauding their daring and risk taking. They are laughing in our faces and we continue to reward them in this country by not enforcing a fair taxation policy on them. A very sad affair.

by Pa1nter | 7th May 23, 11:15am 1683414941

He was holding two bloody lovely looking sticks for a bit though.

by HSL | 7th May 23, 12:28pm 1683419292

Problem is they are the ones that won’t get taxed. They have the money to hire accountants and lawyers to ensure they are operating with tax efficient systems. All cultures throughput history have plundered others…..without exception. Don’t think Māori are anything special, they were pretty quick to murder each other, not to mention have slaves. I think the zulus were actually the largest slave traders.

by ThoughtsAndTorts | 7th May 23, 8:32pm 1683448357

Any clear-eyed view of history shows plenty of bad behaviour on all sides.

As one example, what was the first thing the Maori bought after contact with the British? Guns.

What did they do with them? Wage decades of war against traditional tribal enemies from 1800-1840 which lead to an estimated 40k dead and 30k enslaved out of a population that is estimated to have been between 100k-200k. Even at 200k population that would mean a 20% death rate and 15% enslavement rate. https://en.wikipedia.org/wiki/Musket_Wars

Many of the ills that befell Maori from the signing of the treaty onwards occurred in large part because they had already completely shattered their own society through decades of warfare prior to the arrival of British settlers (or at the very least were heavily exacerbated by it).

And which Maori leader led this war of aggression against other Maori tribes? Hongi Hika. And which tribe did he belong to? Nga Puhi.....which just so happens to be the most powerful and influential Iwi to this day...Funny how that works.

As for the calculation of 10s to 100s of trillions of dollars, please. Any calculation to reach that figure will be so insanely loaded by bias as to be utterly worthless. How do you calculate the value of the spread of scientific revolution and the impact it has had on child mortality and eliminated diseases, or the green revolution and massive increase in the calories countries that were repeatedly famine hit can now produce, the widespread of global democracy to this day, or any of the countless other fruit that spread from the West Europeans to the rest of the world?

There was considerable wrong done by colonisation of course. But any reasonable accounting of history needs to count the good with the bad and it is nowhere near as clearcut as you seem to think that these countries are worse off for being colonised.

Or to use the words of Muhummad Ali when he returned victorious from the Rumble in the Jungle in Zaire (modern day democratic republic of the Congo):

Interviewer: "So champ, what did you think of Africa?"

MA: "Thank God my granddaddy got on that boat!"

by Cheetahlegs66 | 7th May 23, 9:03pm 1683450219

Mate, you’ll be labelled a white bald head racist with comments like that. The fact is Maori were never a nation state and fought ad nauseum. They got licked by the British and have an issue with it which can be repaired financially. Treaty reparations are a fraud. But let’s keep playing the colonisation card as an excuse for every social ill.

Disclaimer: the treatment of First Nation peoples in Australia and the Americas has been appalling. Maori have little in common and are sucking the gravy train for all its worth.

by Pa1nter | 7th May 23, 9:13pm 1683450802

Maori have much in common with other indigenous colonised people; they all get to be second tier inhabitants of their own countries.

by HSL | 8th May 23, 6:52am 1683485560

Māori are not treated as second tier citizens. That’s just completely false. Yes people get angry at Māori, but that is because proportionally they commit more crime…fact. And it’s not down to poverty, I think it’s down to people making excuses for them. That’s why Māori tend to do well overseas, they don’t have the Māori chip on their shoulders to drag them down.

by Pa1nter | 8th May 23, 7:08am 1683486488

Maori were treated as second tier citizens, and that contributes to why they occupy the position in society today that they do.

Most of us are blissfully unaware of the causative chain that makes up so very much of who or what we are.

by kiwikidsnz | 8th May 23, 8:09am 1683490197

Most of us don't care why people raise historical revisionism excuses for the way they behave in their own lives (including within ourselves & our families). We care about our families contemporary safety, security & equality of opportunity. We expect our Govt to deliver a civil society that ensures it.

by Pa1nter | 8th May 23, 8:49am 1683492598

It's up to the citizenry to do that, not government.

Maybe everyone expecting the government to make society good is the reason it seems so screwed up.

by dollar_bill | 8th May 23, 1:31pm 1683509461

So if I buy a second hand car off a guy that stole it off you - you'd say "No worries mate. Keep it. I'm happy walking everywhere. No point making excuses".

by Nzdan | 8th May 23, 5:14pm 1683522884

What if you bought that car off Turners Auctions after the police confiscated it because the original owner was doing burnouts and driving recklessly?

by Pa1nter | 7th May 23, 9:11pm 1683450682

The material wealth stripped out of multiple continents by various colonial companies was significant to say the least.

You can do humanitarian work without robbing people blind, so claiming it's all good because of the spread of medicines or the fact you deem some of these colonised people to have been savages anyway just isn't really any justification at all.

The West has used this money and position to bankroll itself for centuries. That was a huge driving force, Europe had reached a ceiling of resources and prosperity, and colonisation was a way to dramatically increase its riches, with only some muskets and ships.

by ThoughtsAndTorts | 7th May 23, 9:27pm 1683451674

> That was a huge driving force, Europe had reached a ceiling of resources and prosperity, and colonisation was a way to dramatically increase its riches, with only some muskets and ships.

You clearly have not studied this area of history in any great detail if you believe this. Industrialisation and the all the signs of growing wealth in Europe occurred BEFORE colonialism. The wealth and power of Europe grew and THEN colonialism happened.

For an indepth extremely rigourous analysis of this increase in material of wealth there is a fantastic book series called "Civilization and Capitalism - 15th-18th Centuries" By Fernand Braudel. (https://www.amazon.com/Civilization-Capitalism-15th-18th-Century-Vol/dp…)

And saying "just some muskets and ships" is hand-waving away large areas of technlogical development that was largely unique and often forgotten (as one example Maori themselves lost the knowledge of how to make deep-sea capable canoes after arriving in NZ. China notoriously abandoned all deep-sea exploration after the Treasure ships and many of the technologies later spread in Europe were originally created in China but stamped out because they threatened the Chinese social structure).

Nowhere did I say that colonised people were "savages" I just know enough of the history to be well aware of what this civilisations were actually like. The Oppressor/Oppressed lens of history is only one lens and doesn't come close to being all-encompassing or even particularly accurate. (nor remotely fair but I doubt you care about that in the first place).

Let's not forget that it was only Western Europe (led by the British) who stamped out slavery. Slavery was an institution in every culture worldwide (sometimes to this day) and it was eliminated for basically moral reasons (informed by strong religious beliefs) at immense cost.

This thread is a good place to start for understanding why the West rose and others did not: https://twitter.com/RafFaithfull/status/1641157288424611840

And to be clear, none of this justifies the ill-treatment of various peoples under colonialism. But your view of the world and history is completely ahistorical. It just didn't happen like you seem to think it did.

by Pa1nter | 7th May 23, 9:40pm 1683452440

I am most likely more educated in this field than you. And it wasn't from Twitter feeds.

It's very hard not to ignore the huge amount of wealth transfer and plundering that went on. You're kidding yourself if you think the colonised countries profited more than they lost.

by ThoughtsAndTorts | 7th May 23, 9:56pm 1683453365

Somehow I seriously doubt that. I don't really have much patience for this modern mode of historical analysis of "nothing historical can be true no matter how well-documented or reasoned if somewhere someone of a non-European background might have their feelings hurt by it".

And not about Twitter, about the sources in the thread. But sure, ignore that. What about the book link? Let me guess, that is invalid too because it was written by a Frenchman?

You could also ask fairly basic questions further proving my point directionally:

- Why don't we have written records of NZ history preceding the arrival of the settlers? Because there was no written language. (a reasonably basic technology as far as they go)

- Why don't we have any (or very few) pre-colonial structures in NZ? Because the science/technology behind building such structures wasn't here.

etc etc.

Even today technology and the immense benefits that come from it basically spreads from Europe/North America/Japan/Israel and more recently Korea/China. This is just a historical and empirical fact. And there are countless countries in the world today with immense natural resources that are very poor or much poorer than they seemingly could be (Russia being one example). Why is that?

You claim to not be interested in that twitter thread but based on what you are saying it is obvious your alleged "education" is more of an "indoctrination". Won't even look at it or ponder why the printing press was banned in the Muslim world or why unviersities were established CENTURIES before colonialism in Europe (going back as early as 1100s/1200s.

by Pa1nter | 7th May 23, 10:08pm 1683454098

Me: Europe plundered heaps of wealth from the rest of the world for centuries.

You: Maori wanted guns to shoot each other and hadnt developed writing or fancy permanent structures. Also, Muslims were also inferior (actually Europe and the Muslim world traded places over the years).

You're not really addressing my point and instead trying to grasp at what, some sort of justification?

Yes, the world has benefited from shared information. No, many of the savages weren't noble. Still can't ignore the centuries of wealth transfer.

by ThoughtsAndTorts | 7th May 23, 10:16pm 1683454565

I've added considerable context to the claim that "Europe plundered trillions from the rest of the world to develop to where they are now" (paraphrasing). This is not what happened and the reasons behind modern wealth inequalities between the developed world and developing world have little to do with colonialism.

And you're not really addressing my major point:

> Yes, the world has benefited from shared information.

That's an awfully obtuse comment considering the "information sharing" was an entirely one way affair and is responsible for vastly more wealth and a higher standard of living for the people's that benefitted than they could reasonably expect to have otherwise.

by Pa1nter | 7th May 23, 10:24pm 1683455076

True or false: European nations (and/or their private companies) looted significant amounts of gold and precious stones from its colonies.

True or false: for centuries, European countries (and/or their private companies) were the predominant financial benefactor of trade in their colonies.

You're being naive or disingenuous if you don't think the wealth created by colonisation gave Europe a huge leg up. But that's all reversing now anyway, England's former colonies now own all their historical car manufacturing marques.

by ThoughtsAndTorts | 7th May 23, 10:51pm 1683456673

> True or false: European nations (and/or their private companies) looted significant amounts of gold and precious stones from its colonies.

Wow, this is your gotcha from that extensive historical education you've been telling me about? Happy to admit it is true. Gold and precious stones are the definiton of frivolous wealth. Real wealth is technology driven things that improve standard of living or allow you to do more with less. "I have no gold OR precious stones, I must be poor and have a horrible life!" said noone ever. I mean, I PERSONALLY don't have any gold at all! Nor does anyone I know other than the odd wedding band! Who knew we were living in poverty this whole time!

Happy to go even deeper on this one. The only significant gold rush event in NZ history was the Otago gold rush in the South Island so I guess you'll be happy to concede that for Northern Island Iwi this isn't relevant to their position today? Or did the mining of the Otago gold leave a deep spiritual wound or something? It's irrelevant either way of course as the Maori weren't even aware the gold was there in the first place so hard to spin that as some deep loss....

> True or false: for centuries, European countries (and/or their private companies) were the predominant financial benefactor of trade in their colonies.

Varies substantially depending on location but even where true doesn't prove the point you were claiming about alleged "trillions in wealth extracted"?

> You're being naive or disingenuous if you don't think the wealth created by colonisation gave Europe a huge leg up. But that's all reversing now anyway, England's former colonies now own all their historical car manufacturing marques.

Err what? Germany is a former UK colony now? Half of the classic British car brands are German/Italy owned so no idea what you're talking about here. I presume you are talking about the ones owned by Tata but so what? Vastly more have gone defunct over that same time frame anyway (https://en.wikipedia.org/wiki/List_of_car_manufacturers_of_the_United_K…).

The economy and times change. UK is now one of two nations in the world (USA/UK) that can trade LLM's which is clearly going to be a big deal for the next 10-20 years. The UK will do fine it always reinvents itself even if there is pain along the way. I mean hell, the UK was the first country to industrialise close to 200 years ago and English is STILL the global dominant culture/language/economic system. But it's a big tent culture which is why it is so attracting and anyone can adapt and thrive in it, that is why English-speaking nations tend to be so hardy and prosperous.

Anyway this conversation has gone long enough that I can see you don't have even much idea about things even a cursory google search could have told you. So going to leave it here.

by Pa1nter | 7th May 23, 11:15pm 1683458126

I used gold and precious gems because they're a very simple and binary measure of wealth transfer. Good to hear one of the oldest forms of money doesn't count for you because you find the most universal form of currency at that time frivolous.

This format isn't very conducive to long form, highly involved discussion, but the next step from mere gold and jewels is a complex system of monopolistic trade practices and taxation that saw enormous wealth transfer from colonies - is this something you are unaware of?

Not sure how the NZ gold anecdote means much, im talking about a process that exerted a significant amount of foreign control over much of the world.

China owns MG, the Malaysians own Lotus and Caterham, and the Indians own the lines of Jag, Land Rover, and the Middle East has Aston Martin and McLaren. The Germans have Mini and Rolls/Bentley, yes good point they weren't a British colony.

English is prolific globally because they had such a large Empire. It's also another anchor that gives the UK a relative advantage over most other nations (that have their own language) to this day. Just as we have global conglomerates like Heineken who were financed with monies gleamed from the colonies.

Maybe Britain will remain mighty as you say, but she seems a slow slide into obscurity, as it's previous acquisitions go their own way, and the easy money and residual energy runs out.

by ThoughtsAndTorts | 7th May 23, 11:47pm 1683460067

I'm done with the colonialism discussion sorry, we're just talking past each other. I'll admit that's a fair point about gold and gems although fractional banking was already underway by the time of British colonial extraction of precious metals. It is still only a small piece of the overall picture when looking at British (and European) engagement in the world over the last few hundred years and your perspective is more wrong than it is right.

As for the stuff about cars, so what? It is just one industry. As for "easy money and residual energy" well I guess being at the cutting edge of two of the most significant areas of technological development of the last 5 years (biotechnology with the most prominent being vaccines, and LLM's and other AI-adjacent technology) might seem like sliding into obscurity to some but it certainly doesn't look that way to me. Of course they'll never regain the dominance of the 19th century but as a core part of the Anglosphere and closest most important ally of the global superpower I think they'll do just fine.

To be fair I don't even know what you mean by "sliding into obscurity". Do you think they'll be shitting in ditches or just a wealthy technologically advanced country for their size that is never the less eclipsed by the United States/China?

by Pa1nter | 8th May 23, 6:25am 1683483948

We're not really talking past each other. I've said some things, and you've refuted them, citing my poor historical knowledge, reinforced by trying to trivialise gold as wealth, and claim that the transfer of some information was more than compensation for theft on a global scale. Actually theft is such a negative word, let's call it "permanently borrowed without permission".

"Sliding into obscurity" in that, with the absence of a massive military technology advantage, there's a diminishing level of competetive advantage nations like the UK hold over much of the rest of the world. The scales of power and wealth will only keep tipping.

So the thing to contemplate is, will the slip be from #1 to #2, or will the actions of the past dictate a slightly more aggressive fall. Will the savages accept the sorts of apologism you have presented?

by ThoughtsAndTorts | 8th May 23, 9:57am 1683496660

> "Sliding into obscurity" in that, with the absence of a massive military technology advantage, there's a diminishing level of competetive advantage nations like the UK hold over much of the rest of the world. The scales of power and wealth will only keep tipping.

> So the thing to contemplate is, will the slip be from #1 to #2, or will the actions of the past dictate a slightly more aggressive fall. Will the savages accept the sorts of apologism you have presented?

There is a certain logical internal consistency to your thought and views of the world (military advantage allowed some countries to take advantage of others and extract wealth that led to their prosperity) but empirically the evidence for this limited. And looking at real world examples shows that.

Firstly it completely handwaves away (or ignores completely) the obvious question of "why did/do certain nations have military advantages of others in the first place?". "Muskets and ships" to use your phrasing were not gifts from above but had to be created by the people in those countries in the first place and why were they created in some places and not others? You have causation going the wrong one, military advantage is the outcome of technological advantage which is created by efforts/norms around the structuring of society/government programs/the actions of private businesses and individuals/etc.

The USSR had substantial military advantages over large parts of the world but was unable to translate these into meaningful wealth or prosperity for their citizens compared to the developed world standard. This is even true in the case of the the "Core USSR" of Russia which is still noticeably poorer than many other European countries today on many metrics.

But even if for a moment I accept your myopic worldview (Military tech advantage leads to the ability to extract wealth from others which is what makes countries rich today) it has some big flaws and even on the terms you provided doesn't project a bleak outlook for West European countries in general or the UK in particular.

Outside of China/Israel, arms exports globally are still dominated by Western countries countries (https://en.wikipedia.org/wiki/Arms_industry#World's_largest_arms_export…) with even some new recent arrivals like Poland. People wanting to buy your weapons is an important metric for their effectiveness so this is quite telling. Although I'd also point out one of the biggest importers is Japan which is not a poor country by any stretch which further shows how your hypothesis of "military advantage leads to wealth" is on shaky ground indeed.

There is also the obvious point that people (not sure why you are calling people "savages" as that is a pretty insulting term) around the world still overwhelmingly want to move to culturally Western/European countries (https://news.gallup.com/poll/468218/nearly-900-million-worldwide-wanted…) Look at the graph "Top Desired Destination for potential migrants". And what happens when they get there? They contribute, integrate, and add to the wealth and power of these countries. Developed countries need to balance migration carefully of course in order to make sure it is a net benefit to locals but it overwhelmingly seems to be the case that it is. There are only a handful of countries that have in any real sense caught up with European nations or have the prospect of doing so and they are all either very small or based in East Asia.

On this specifically:

> The scales of power and wealth will only keep tipping. So the thing to contemplate is, will the slip be from #1 to #2, or will the actions of the past dictate a slightly more aggressive fall. Will the savages accept the sorts of apologism you have presented?

No idea what you mean by this. What do you think will happen exactly, the UK will get conquered? Lol I'll eat my shoe if that happens in my lifetime (I'm 29 so let's say 40 years). I mean you talk about the UK's "diminishing military competitive advantage" but I still see a country with nuclear weapons, one of only a handful of blue water navies in the world, substantial missile defence systems based locally, part of the most effective global intelligence network in the world in FiveEyes, and recently a founding member of the AUKUS alliance to integrate nuclear-powered submarines between USA/UK/AUS to ensure freedom of shipping lanes and counter aggression from assertive rising powers (basically China in the Pacific).

I'm actually curious what you think could/might happen here? Because I think you have started with an incorrect premise as your foundation (that UK wealth/power was due to colonialism rather than colonialism being due to UK wealth/power) and so it is leading you to dubious conclusions about the future. The UK will remain a wealthy and (relatively) powerful country going forward. There are many tailwinds supporting their prosperity that won't change anytime soon barring a nuclear war or something of that nature. Other countries will grow and prosper (hopefully) but economics isn't a zero-sum game so this won't make the UK any poorer. It could arguably make it relatively weaker but even if this happens there is a big difference between relative weakness on paper and actual weakness in reality that will manifest in real-world consequences.

by Pa1nter | 8th May 23, 10:15am 1683497748

That's a super long post to fisk so far down a thread.

Most of the technological superiority was from luck more than anything else. So making comparisons like the one between the technology developed in Europe, to that achieved on isolated, temperate climate Islands in the Pacific is a fool's errand. They cannot be the same.

As for the slide, we can see shifts in power and wealth occuring the shorter the gaps in technology, and the further distance is from the time when 10,000 poms with guns managed to control the wealthiest country on Earth. It's a decay though, not a bang.

by ThoughtsAndTorts | 8th May 23, 11:21am 1683501696

Well it seems like that luck is still going pretty strong in some pretty important areas as I've mentioned in earlier comments so I don't think I am close to as bearish about the prospects of the UK as you are. I was there just 6 months ago and it certainly didn't seem like a country in decline (other than the usual swings of the market and political issues) and I met heaps of energetic and hopeful people passionately engaged in all sorts of things. If that's what "decay" looks like to you then fair enough.

As for the British Raj, that always had a core element of Indian division and weakness rather than purely being about military strength. Because as you say it isn't possible for 10k poms to control a country of several hundred million without a huge number of internal collaborators cooperating with the British for their own purposes/enrichment. Even today the relationship between Pakistan/India and various other groups in the subcontinent are testament to that. How many years after partition and Indian-Pakistani relations are still very hostile and neither side seems to have much interest in repairing ties.

Anyway this is way off topic and other posts are springing up so going to leave it here.

by Shaft | 8th May 23, 9:45am 1683495913

Pa1nter . I think you talk too much!!!

by pigeonbox | 7th May 23, 9:57pm 1683453465

Guns, Germs and Steel by Jared Diamond also covers this beautifully

by Colin Cameron | 7th May 23, 12:12pm 1683418367

But just like university students start of as labour/green voters,when they want cheaper fees more allowances and to right the wrongs of their fore fathers then low behold when earning and paying tax and mortgages etc etc they quickly change and say What my tax getting wasted on that no way. Just like all these young ones heading off to Aus for more money isn't that capitalism yet while in university etc they protest unfairness climate change yet turn around and even a nurse in Aus owes their high income to the export of coal which is the back bone of the Aus economy how dare they.

by HW2 | 7th May 23, 12:30pm 1683419459

Nice point about the environmentally ethical gen y/z but only until it affects them personally.

by Colin Cameron | 7th May 23, 1:50pm 1683424250

Over 30 percent of NZ landmass in National parks no western country has that amount. No western country has the resources we have left untouched.

Under ETS only forest planted after 1989 are credited so that means all that native national parks ain't credited and IPCC say exotics that's pine trees don't sequester as much as native yet supposedly we are high polluters remeber Aunty Helen coming back after Kyoto agreement signed crowing NZ was going to make a fortune till the Europeans realised their mistakes and ratified to forests planted after 1989. But since the greens like the Nordic countries for their green credentials First Finland just commissioned the largest nuclear plant in Euro even thou all the other EU countries complained Norway their largest export is oil or coal they export 60 billion a yr alone hence their great tax welfare system. Denmark just commissioned a knew waste to power plant built a ski field on top. All these three countries said,when questioned about these so called environmental damaging industries. Well we need to take care of our people exactly what Germany and UK said when firing up the mothballed coal fired power stations a couple of months ago. But our labour/greens think taxing the hard working savers/risk takers/farmers etc etc to save the world and or poor is the way to go. Fools

by E46 | 7th May 23, 2:22pm 1683426139

If we want climate leadership, it is never going to come from New Zealand, we just aren't big enough or influential enough. The only countries that can move the ball on global climate policy will be China and the United States.

by interesting1234 | 7th May 23, 7:40pm 1683445212

Over 30 percent of NZ landmass in National parks no western country has that amount. No western country has the resources we have left untouched.

Maybe not western, but Costa Rica is right up there

by RickStrauss | 8th May 23, 12:05pm 1683504355

Rock and a hard place. Head off to build a viable life, or stay and be exploited by entitled older cohorts.

by whakahokia mai | 7th May 23, 9:53am 1683410006

I haven’t actually mentioned about house prices won’t increase in the next half millenia. I have mentioned that I want house prices to drop enough where a worker in a working class suburb can afford to buy the house they are currently renting. That to me is fair and reasonable. A capital gains tax for the wealthy that captures their currently untaxed capital gains is a far greater and demonstrably unfair current issue that can be addressed by a ruling political party or coalition if they had the moral fortitude to do so. Not an envy tax at all. A just tax if anything.

by Colin Cameron | 7th May 23, 1:38pm 1683423520

And what you will see is the wealthy will build monstrosities of owner occupier houses that won't be CGT take their money out of things that incur CGT and either do above or ship it off shore were the NZ govt can't get it. Even if houses were 100k alit of people still won't buy them. Look at people on minum wage in Auckland why. If I was on minum wage I would go to Invercargill or West Coast cause the minum wage is still the same yet you will own your own house have better lifestyle but do they nope they bemoan how had everything is and want the govt to get it or fix it. All that IRD report did is take the heat of how incompetent this govt has been and try to get everybody to blame the ones that have done well. Just like Twyford blamed Chinese investors on the price of housing in NZ

by HSL | 8th May 23, 6:57am 1683485852

I want the same thing, I think no CGT and a reduction in wasteful government spending, reduction in councils ability to increase rates and reduced regulations will achieve this. Most if not all the housing problems have been caused by low interest rates, pushed by all governments for their own benefit…I.e. being elected.

by The_Professor | 7th May 23, 8:21am 1683404516

Wage inflation at over 8% in private sector.

NZD60Bn printed in 2 years. No productivity and slowing GDP growth .

This equates to a STAFFLATIONARY situation that will take a few years to play out (a person cannot commit homicide and go to jail for 9 months).

If the socialists get a third term (despite the widespread anger), expect a mass exodus of skilled and young people to leave NZ.

Now is the time gor a government with strong policy on prudent economic management and future productivity.

by BeeBop | 7th May 23, 8:35am 1683405301

Would be nice if we could hire people that can read functionally. Too many adults are very low in literacy (read as males in construction). The damage/negative productivity that occurs as a result is destructive. Future proof and ramp up the education of our children.

by Pa1nter | 7th May 23, 9:46am 1683409566

They've been doing that for 20 years. As in, our High Schools have been pumping kids to go to Uni hard. Note I definitely value higher education, but it has not appeared to deliver a dividend relative to the cost.

It sounds like you need some sort of hybrid model like Japan or Sth Korea, where the state pumps certain industries and everything from the tertiary education for it, right through to retirement is mapped out.

by nigelh | 7th May 23, 9:52am 1683409924

Its not just construction. TV1s commentary on the coronation. King Charles 111 is going to be coronated. Also in 1066 someone else other than William the Conqueror

by HW2 | 7th May 23, 4:09pm 1683432577

"Henry the Conqueror" bl**dy tvnz dimwits. Coronated in the abbey that wasn't built for another 200 years.

by bw | 7th May 23, 9:19am 1683407979

We have all had rampant Inflation for decades. Huge amount of liquidity = Debt, created locally and across the Globe not backed by Productive Enterprise but speculative hope.

And we have removed it from the reported "Inflation" figure and called it - Capital Gains; "Wealth Creation" and so have not kept it in check

Well now that's about to be corrected as asset prices backed by that phantom wealth, fall. And as the affected all scramble for what liquidity is left available, they will pay higher Debt rate to get it. Because the price we will all pay if "Inflation" escapes will be heavy. And those who control Monetary Policy and can make the decisions, know it.

by Fossil Lover | 8th May 23, 2:55am 1683471358

Absolutely correct. Bankers and governments got away with their printing scheme because of the deflationary pressures of mass production, new technologies, more fossil fuel production, and now an aging population deleveraging. When these deflationary pressures expire the sky is the limit for the imaginary fiat currencies of the western world.

by Juzz | 7th May 23, 10:37am 1683412626

Skilled and young people may just leave if we resume pumping the property market

by ZeroCredibilit… | 7th May 23, 9:03am 1683406995

by Averageman | 7th May 23, 9:21am 1683408096

It is election year. There is always a lolly scramble budget. Especially if you are a govt that is on the back foot and continues to punch itself in the face with policy it never campaigned on.

Commercial reality. We cannot afford ourselves, and the govt has been spraying money at things that add nothing.

There will have to be some sort of land/wealth tax otherwise we are New Zimbabwe.

by Colin Cameron | 7th May 23, 12:19pm 1683418790

Isn't it strange when NZ had the highest standard of living we only exported 4 things wool, meat, timber, dairy yet we didn't have homelessness, poverty literally full employment and everybody pretty much had a lifestyle. Yet now we have all this top heavy civil servants, spun doctors consultants economists who are all over paid for not producing and literally you can't pick your nose unless you ask yet we got told we had to be like the rest of the world

by HSL | 7th May 23, 12:30pm 1683419456

Yep over regulated by idiots. And all those exports are in the targets of this stupid government. On the bright side, I think people are waking up to this.

by Squishy | 7th May 23, 9:25am 1683408311

Looking at debt to GDP and overall taxation levels it's clear we need a big step back.

by HouseMouse | 7th May 23, 9:35am 1683408902

Again, yes there are signs inflation is lowering, but it’s still far too high. And yes employment will weaken but unemployment is still very very low so there’s slack there.

The OCR should be raised by a further 50-75 BPs across 2-3 meetings.

Am I missing something?

by HW2 | 7th May 23, 9:51am 1683409867

Inflation is dropping partly due to oil still falling and down 11.5pct in the last 30 days. Crude oil prices have far reaching effects I believe

In the last inflation count, international airfares got some blame but now reversing, along with farm inputs now that shipping is back.

by HouseMouse | 7th May 23, 10:00am 1683410401

Yep that’s helpful, but of course the tax comes back on in June.

by HW2 | 7th May 23, 10:14am 1683411268

My money would be on them not reasserting the fuel excise in June. They want to increase their chances of winning and also hogtie the opposition if/when they take control.

by Retired-Poppy | 7th May 23, 6:23pm 1683440603

I'm glad its your money betting on a backflip lol!.....https://www.nzherald.co.nz/nz/grant-robertson-announces-fuel-tax-subsid….

Winning streak!

by Fossil Lover | 8th May 23, 3:01am 1683471673

Inflation is not dropping. Inflation is still rising, that is the illusion and feel good for the people struggling of this article.

by bw | 7th May 23, 9:53am 1683410000

FWIW.

"Warren Buffett says it’s been an ‘incredible period’... but that’s coming to an end." With unemployment being so low, it’s hard to be believing we’re going to fall off a cliff into a recession at the consumer level. I wonder if this is going to be an asset-value recession.

https://fortune.com/2023/05/06/warren-buffett-economic-outlook-berkshir…

by HouseMouse | 7th May 23, 10:06am 1683410808

Interesting perspective.

Yes this is a very odd time isn’t it. House values plunging, but people still spending at reasonable levels and unemployment very low. Very odd.

I still think that unemployment pain is going to arrive, but it’s really lagging that’s for sure. Residential construction is slumping, and it’s too big a part of the NZ economy to not eventually lead to higher unemployment and flow in to consumer spending.

So maybe it’s September Day rather than May Day, who knows.

by bw | 7th May 23, 10:09am 1683410971

Follow the money.

Warren Buffett’s Berkshire Hathaway dumps billions of dollars of US stocks

by Independent_Observer | 7th May 23, 11:29am 1683415785

It’s a new dawn where good news is bad news for asset prices. It is only bad news that allow CBS to drop rates and artificially pump asset prices once more. Good news allows interest rates to remain at a normalised level, and will mean asset prices return to fundamental/historically accepted prices, relative to incomes/cash flows.

If you run the cash flows on assets prices and cash flows….and increase discount rates from 2-3% up to 6-7%, the asset falls circa 40% (even if the cash flows grow at 6-7% inflation). This can be seen real time via the TLT fund (bond etf).

by Zwifter | 7th May 23, 12:47pm 1683420456

Hey HouseMouse its just that people cannot pull their heads in and keep spending until those credit cards are maxed out. Personally I'm not surprised people are spending like there is no tomorrow, we have basically had zero interest rates for years and old habits die hard.

by E46 | 7th May 23, 1:35pm 1683423348

And with inflation still doing a number on people's purchasing power, it's better to buy stuff now rather than wait and see prices go up.

by GetFeeling | 7th May 23, 2:16pm 1683425817

Yes this is a very odd time isn’t it. House values plunging, but people still spending at reasonable levels and unemployment very low. Very odd.

Not odd at all. And easily explainable if you break "people" down into different economic groups.

This is one of the major problems with high-school (and pub) economics. i.e. The 'people' are treated as a homogeneous mass that all behave alike and all have the same starting position. Well, this is real life, and without a breakdown of how different economic groups are behaving in response to the events of the time then things can look "odd" until the actual position becomes clear.

But don't worry, it'll become clear in 3-6 months as the RBNZ policies that currently 'appear' to only affect a smallish number becomes a mass that affects all economic groups - but some will not suffer, in fact, they'll become richer.

I worked on an economic model with 000,000s of 'individual people' that reflected a real population and it modeled how they responded to economic events. (e.g. it could have two economically identical people where the only difference was their starting bank balance and/or duration of their term deposits.) It showed that between 'transitional economic events' there were long periods where many major indexes showed little or no effects. Or as you said, they looked 'odd'. Meanwhile, lesser used (or even known, many are private) indexes were showing the alarming effects, a contagion if you like. So don't worry. It'll all become far less 'odd' in 3 to 6 months.

by JimboJones | 7th May 23, 7:33pm 1683444808

While I wouldn’t call myself a fan of the Key / English era, one thing they did do well is keep things consistent. When things are changing all the time, whether it be policy or economy, it makes it hard for people to adapt and invest, and as you say some groups do well out of the changes and others get shafted. Orr and Labour have a tendency to continually pivot rather than having a long term plan.

by HouseMouse | 7th May 23, 10:08am 1683410913

The big question for me is what will NATIONAL do?

I could potentially bring myself to vote for them, what I would like to see from them:

- Tougher on crime: and I know it’s complex, I am not suggesting lock people up and throw away the key, but I certainly think a tougher approach is required, to protect people, it’s really getting out of hand

- a MASSIVE shake up of many of the ministries and agencies. They need to halve the size of the ministries, this would save a few billion per year and also result in much more focussed policy advice. Some outfits like Kiwirail need to be gutted. This comes back to the main inflation focus of this article, and the imperative to get government spending down.

And also taking a magnifying glass to the multitudes of government programmes. There’s plenty of luxury ones as far as I can see, of dubious merit.

by chebbo | 7th May 23, 10:12am 1683411121

Unfortunately, National don't have to do much of anything. Promise to reverse some of the massively unpopular Ardern-era policies, don't fall apart from the top down like last time, and don't be Labour. That's about it. I wouldn't expect anything major out of them.

by HouseMouse | 7th May 23, 10:28am 1683412112

Yes I think you are probably right. Which is a pity.

I certainly won’t vote for them if it’s pretty much business as usual in terms of policy.

Taking a sword to the Wellington bureaucracy wouldn’t lose them votes, as most of said bureaucracy are left-leaning.

Of course it wouldn’t be good for Wellington house prices, so they won’t do it, haha.

the best we will probably get are some fairly meaningless tweaks

by Independent_Observer | 7th May 23, 11:35am 1683416108

Yip emailed the National party recently and said that I would vote for them if they were to change their stance on housing.

ie match labours current housing policy and I would jump ship to national.

Got a ‘thanks very much we will think about it’ (aka not going to happen).

The only group their housing policy is going to benefit is landlords so I asked them if they were the party of landlords…probably went down like a cup of cold sick, but honestly..at some point they’ve got to look past the financial self interest and consider the overall society wise damage that their housing speculation policies have caused (under key) and will cause again if elected.

by HouseMouse | 7th May 23, 11:59am 1683417552

Yep.

of course, Labour have got their own society-damaging approaches too…

by JimboJones | 7th May 23, 7:06pm 1683443183

I’m not convinced it will be that simple for National, a lot of their current policies won’t be popular come election time when it’s debated. Things like ditching the clean car discount, giving property developers their tax breaks back, and tax cuts for the rich while labour will probably do tax cuts for everyone. And do people really want someone with Luxons beliefs as PM?

It could be a really tight election. Probably depends on the economy at the time.

by Whatwillhappen | 8th May 23, 9:34am 1683495251

And do people really want someone with Luxons beliefs as PM?

It depends on who you are. About 35% of people hold similar views as Luxon, if what I think you mean is correct. Ignoring that issue, I didn't want someone of Ardern's beliefs running the country either. If I wanted to vote on personality I'd vote for Hipkins. But I won't. I want to vote on policy, not innuendo or personality.

by Audaxes | 7th May 23, 10:35am 1683412513

Some pointers from China:

Chinese President Xi Jinping says economic growth plans must focus on manufacturing and technology

Chinese leader told a planning meeting to focus on the ‘real economy’ and avoid sectors such as finance and property to avoid the risk of a bubble
Officials also discussed ways to address the looming demographic crisis posed by a falling population

by Audaxes | 7th May 23, 10:33am 1683412410

In recent weeks, the Biden administration has buried neoliberalism and declared a new Washington consensus. National industrial policy is all the rage. National security adviser Jake Sullivan boasts that it is not part of his job description to defend the interests of American investors in China. As a result, multibillion-dollar investments in China hang, in political terms, by a thread. Link

by Fossil Lover | 8th May 23, 4:09am 1683475752

Neoliberalism has been buried a long time, probably when the USA came off the gold standard. Every presidency since then has accelerated government spending, corporations hate a 'free' market and regulations continue growing. National industry policy supports and pays for (Taxpayers money) the Big 3. The military industrial complex (under the disguise of fighting terrorist ghosts), the medical industrial complex (under the disguise of saving us all with their chemical drugs) and Big Ag (under the disguise of feeding the hungry). Just like the rest of the western world, Washington is a puppet of corporate interests, that all want control of us serfs.

by JimboJones | 7th May 23, 12:20pm 1683418805

Not sure why labour would go no frills, the cost saving voter is obviously going to vote right even if it’s simply to prevent the greens getting in.

I’d like a party that will spend some money on frills: infrastructure, education, transport, etc. I don’t see how we can save our way to prosperity. But which party is that?

by E46 | 7th May 23, 1:38pm 1683423535

Yea, the old saying is you can't tax your way to prosperity, which is true. But at the same time, you can't budget your way out of poverty. A balance has to be reached and going too far in either direction leaves us all worse off.

by Shaft | 7th May 23, 3:33pm 1683430411

What bullshite. The only real way to get out of poverty is to budget your way out or increase your income streams.

Ask any budget advisor!

If you can't increase your ingoing to allow for your outgoings then please explain what you do if you cannot budget?!?

by kiwikidsnz | 7th May 23, 3:39pm 1683430743

Best is to "...budget your way out AND increase your income...". Same as any other business, control your costs while growing your sales

by E46 | 7th May 23, 4:31pm 1683433907

You can only get so far with cutting spending though, the only way to get ahead is to increase income. We could cut all government spending tomorrow and it wouldn't help, expenditure on essential services and infrastructure is crucial for enhancing economic efficiency, and cutting that to save money can potentially cost more than it saves.

Look at the UK's austerity policies following the GFC for an example of what not to do.

by JimboJones | 7th May 23, 7:10pm 1683443406

Maybe that is true for an individual but a government can easily increase its revenue. A no frills government is not the way to encourage people to stay in NZ, the small amount of tax it will save is not worth NZ being left behind by other countries.

by RickStrauss | 8th May 23, 12:07pm 1683504467

Difficult to increase the country's income streams when we overtax productive work that could create export income, and undertax lazy land speculators so that most investment flows into land speculation rather than hard work.

by whakahokia mai | 7th May 23, 1:43pm 1683423797

I sent an email to Te Pati Māori this morning asking them to make a Capital Gains Tax on the rich end of the spectrum as their point of difference and a negotiating tool if they became kingmaker.

by Grattaway | 7th May 23, 2:34pm 1683426899

Plenty of Maori boys and girls at the top end of town wont want this to happen

by whakahokia mai | 7th May 23, 2:43pm 1683427427

No doubt about that. Still makes the proposal worthy though. CGT is colour blind in its purest form and should remain so. No favouritism.

by paashaas | 7th May 23, 3:06pm 1683428784

" CGT is colour blind in its purest form" - therefore not an attractive policy for Maori Party.

by Cheetahlegs66 | 7th May 23, 9:12pm 1683450723

How about Iwi pay tax at the company tax rate and not 17.5%?

by HSL | 8th May 23, 6:59am 1683485975

I think it’s lower then that!

by Shaft | 7th May 23, 2:44pm 1683427445

Does that include the Maori " tax free status" Uber rich tribes that have billions invested in property and quite few head honchos million dollars property portfolios!... All paid for by kiwis taxes!

They are as, bad as google, the white rich, and the hard working rich business people.

by Shaft | 7th May 23, 2:38pm 1683427117

This spend everything " inflationary" government still have to increase the min wage and benefits as per their 2018 election bribes " livable wage"" manifesto.

The RB need to grow a pair and indirectly influence the morons in government regarding their constant counter productive economic plans.

If you buy things you do not need, soon you will have to sell things you need.

~ Warren Buffett

by kiwikidsnz | 7th May 23, 4:30pm 1683433815

Meanwhile, over the ditch there's a few parallels...(note NSFW or children's ears)

https://youtu.be/DNxXRigHri4

by Wrong John | 7th May 23, 5:33pm 1683437582

Everyone needs to know how to budget. Everyone. No exceptions. Every house. Every family. Every council. Every govt. Every person. Every couple. Every business. Every civil service. Every idiot. Every rich person. Every poor person.... you get my point. Budgeting is a life fundamental. If you fail budgeting you're probably going to fail life.

And that doesn't even begin to address the quality versus quantity issue, which is another degree entirely.

Mind you, with the poor state of our educational institutions these days, it's no wonder we have 350,000 working aged people who will not work for one reason or another.

Fixing NZ is easy. Teach your children to be responsible for everything they say & do. Send them to school & encourage them to learn something. Teach them the difference between good & bad. Then encourage them to get a job & to learn how to be good role models themselves. Who knows, with any luck they may get married & have children of their own, which then you can be grandparents to. Then you'll have a real family.

Which has been my point for a long time now. If you want to build a great country, how about starting by building great families!

by Cheetahlegs66 | 7th May 23, 9:16pm 1683451001

Bingo. The Christchurch Longitudinal Study showed a stable home environment was the biggest determinant of a child’s outcome. I heard this first hand on Friday from one of their ex-researchers.

This is the primary reason Maori lag behind other races in our social statistics. A similar situation exists with African Americans.

by Jonny.Foe | 7th May 23, 10:16pm 1683454572

Recent data offers some signs that higher rates are cooling inflation but not to the extent that the RBNZ will be deterred from one last 25 point hike to reach 5.50%.

There is no data that suggests our rate hikes are cooling inflation. We have had rate hikes. Yes. We have seen a drop in inflation rate. Yes. But there is nothing to suggest that the former is driving the latter. Our domestic prices increases have slowed because imported prices are falling. In fact, they would have probably dropped more if we hadn't added loads of extra interest cost to businesses.

by Jonny.Foe | 7th May 23, 10:18pm 1683454724

Incredible how many of the 'they just need to work harder, budget better, move to get a job' folk are the same people begging the central bank to hike rates to loosen the labour market and make more people unemployed. Take a moment to think about it!!

by HW2 | 7th May 23, 11:17pm 1683458276

Yes its a conflicted position good point.

However if you think about it those who are currently employed are already exhibiting self control and motivation. Managing themselves as well as families and less likely to be dependent.

I enjoyed reading the discussion on budgeting and was reminded again of its import. Times of stress and hard times are good for all of us to make us examine ourselves and how we do things. Innovations are born from necessity.

by tomjones_04 | 8th May 23, 6:39am 1683484740

Innovations are born from necessity... thought provoking and profound. Should be on one of those memes with a Hollywood actor staring off into the distance.

by Camel's back | 7th May 23, 10:26pm 1683455187

Inflation falling? against what measurment?? food water shelter power tech, all huge bills. Business very slow slowest its been ever.... When unemployment starts to rise this will get ugly.