Paying subscribers can ask Bernard Hickey about the week’s news, including the $130m paid to NZ Steel to cut emissions, National’s U-turn on MDRS & the RBNZ’s declaration it’s done enough on inflation
It depends on how you measure it, over what period and whether you use an indexed measure or an actual multiple. Here’s one from the economist to start with. That Statista one is indexed to a time period. https://www.economist.com/graphic-detail/global-house-prices
In your recent NZ Steel coverage you said NZ Steel wasn't in the ETS. They are and both have to buy units and get free units, as I understand it NZ Steel receives $50-$100 million in free NZU's. So why not just cut their free allocation of units, I am sure this would have motivated them to invest in this new tech and then we wouldn't have needed such a big govt subsidy ?
A follow on from this is will they still get the free units, essentially a double dip as they will probably continue to be an Emissions Intensive Trade Exposed Industry?
Thanks Finn. Yes they’re in but don’t have to pay effectively, so you’re right. My point was to say they don’t have to pay at the moment. I asked the CEO if they would stay if they had to pay for credits. He said they would shut down immediately as their international competitors don’t have to and NZ Steel would be immediately uncompetitive.
Ah seems fishy to me given they recently posted $340 million in profit ;). Maybe if they can't pay for their own externalities they shouldn't be in business and we would get more building materials from low carbon industries like timber if we can sort out forestry damage issues...
RBNZ seems tobe crosding fingers over immigration. They're really unsure what the migrarion level will be and also whether it will stoke/douse inflationary pressures
To be fair, most seem uncertain. Although I still think the numbers are more likely to be higher than both Treasury and RBNZ say, given our economy’s insatiable need for cheap labour to overcome the effects of being a ‘capital shallow’ economy with low productivity growth.
Please can you define what you deem to be cheap labour? Labour for all their faults (and there are many) now require temporary work visas (aewv) to pay $29.66 per hour as a minimum. The minimum wage is $22.70.
Can we get Chris Bishop on for an interview or a hoon? I'm guessing he'll be tight lipped about how he feels about potential changes to the MDRS. But I'd be interested to hear his response to the general Kākā thesis of what's wrong with our housing market. We already know what the NIMBYs in National think, I'd like to hear how he rationalises it as someone who understands the issues.
I'm interested in the political calculation behind the MDRS reversal from National. Surely there are just as many to benefit from this policy, including many over 50's who might be thinking the only way my kids will get into the housing market is if we spring for the deposit or build a townhouse or two on our property for them. Yes, I know there's a bit of racism (real Kiwis don't want to live in apartments etc) and some will face the prospect of losing a view or some sun. But even with this policy the pace of change will be slow and the chances of change arriving in your street in the next few years is probably quite small. I know the young don't vote in high numbers, but surely people in the construction sector, those with kids who need homes, and those locked out of the market won't be loving this U-turn. Has anyone checked Nicola Willis's temperature on this? I picture her sticking pins into a pocket sized voodoo doll of Luxon everytime he's speaking in public. Perhaps that's his problem 😆.
Ha! Hard to know, but I doubt this will lower temperatures in the caucus room, especially with Willis and Bishop, who are Luxon’s strongest colleagues.
Ha! I’d pay for a picture of said voodoo doll, and even more for an action-replay video. Just kidding. They’re both lovely people I wouldn’t wish anything sharp in their futures. But yes, I’m constantly surprised at how little imagination or empathy suburban owners have for others, let alone their own children. Leveraged and tax free gains are the main game now.
Luxon and Bishop are not lovely people!!! they both intend to enact legislation that will give people who are rich/wealthy enough to purchase two or more residential properties a colossal financial advantage over people who are able to purchase only one residential property.
extending free childhood to two. year olds Didnt take long for the story to switch to the negative about how child care centres wont be able to affird this because of tags.
My big question is how have we allowed for an essential service of public good to become a gravy train to private providers.
Good question. I’m no expert in this area, but it is one of those publicly funded services that grew mostly after the cataclysm of the deregulations and attacks on the size of Government since 1984.
Childcare is definitely tied up in the housing mess. Increased availability of childcare for the under 5's has definitely increased the proportion of two parents working full time. Whether house prices meant both parents had to work or whether house prices went up because having two incomes increased the amount able to be borrowed, I'm not sure. Community childcare providers like Playcentre and Kindergarten have definitely suffered as parents look for longer hours and holiday cover. Corporate childcare is a mega business and I do worry about the outcomes for kids where there are 10 kids to a childcare worker. It would be interesting to hear from a social science researcher in this space but I don't know one.
Be interesting to know if any govt has considered extending school age down to say 3 and running ece in the same way as schools. Ie universal and funded out of general taxation.
I used to be chair of the parents management committee of a community child care centre in the 90’s and I remember the private ones clise by cost more, had worse staffing ratios but some liked them as the kids were from “better families” and then the govt started funding the private ones
Thanks Piet. I don’t think for long. The Fed would intervene to flood the system with cash and essentially fund the US Govt. More free money. Another bailout. Could mean lower interest rates for a while.
Hey B man I have a wicked idea, government to introduce mandatory labelling on food items similar to the energy efficiency label on electrical appliances. The label would have a mandatory profit margin declaration, to be fair not the difference between buy and sell prices but the profit after operating costs associated with that item. Yep I can hear the howling now, damn sure that would bring about competition
I've thought about such a Health Star style labelling system, but encompassing broader set of sustainability criteria: Health, Water, Materials, Carbon... potentially some kind of Affordability measure
Affordability may not be an indication of reasonable pricing, my thought was to introduce a measure to curb supermarket profiteering to the obscene levels being presently enjoyed.
When you talk about New Zealand having the highest house prices in the world, what data are you using for this? Because when I search for house price to income ratio rankings, New Zealand isn’t most expensive - https://www.statista.com/statistics/237529/price-to-income-ratio-of-housing-worldwide/
It depends on how you measure it, over what period and whether you use an indexed measure or an actual multiple. Here’s one from the economist to start with. That Statista one is indexed to a time period. https://www.economist.com/graphic-detail/global-house-prices
In your recent NZ Steel coverage you said NZ Steel wasn't in the ETS. They are and both have to buy units and get free units, as I understand it NZ Steel receives $50-$100 million in free NZU's. So why not just cut their free allocation of units, I am sure this would have motivated them to invest in this new tech and then we wouldn't have needed such a big govt subsidy ?
A follow on from this is will they still get the free units, essentially a double dip as they will probably continue to be an Emissions Intensive Trade Exposed Industry?
Q:Why not pay for it yourself?
A: NZ Steel CEO "There is no direct financial benefit"
Except for the $50-100 million upside through your shift in ETS obligations...
Yep. Until they stop getting free units, they’re in the same position. No suggestion they won’t still get them.
Thanks Finn. Yes they’re in but don’t have to pay effectively, so you’re right. My point was to say they don’t have to pay at the moment. I asked the CEO if they would stay if they had to pay for credits. He said they would shut down immediately as their international competitors don’t have to and NZ Steel would be immediately uncompetitive.
Ah seems fishy to me given they recently posted $340 million in profit ;). Maybe if they can't pay for their own externalities they shouldn't be in business and we would get more building materials from low carbon industries like timber if we can sort out forestry damage issues...
Thanks Finn. Strategic issue I think. I’d much prefer we retain our ability to make steel here.
Yep agreed, just think maybe $140 mil was a bit too generous...
RBNZ seems tobe crosding fingers over immigration. They're really unsure what the migrarion level will be and also whether it will stoke/douse inflationary pressures
To be fair, most seem uncertain. Although I still think the numbers are more likely to be higher than both Treasury and RBNZ say, given our economy’s insatiable need for cheap labour to overcome the effects of being a ‘capital shallow’ economy with low productivity growth.
Please can you define what you deem to be cheap labour? Labour for all their faults (and there are many) now require temporary work visas (aewv) to pay $29.66 per hour as a minimum. The minimum wage is $22.70.
is anyone ensuring that all those working with temporary work visas are being paid $29.66 per hour?
Can we get Chris Bishop on for an interview or a hoon? I'm guessing he'll be tight lipped about how he feels about potential changes to the MDRS. But I'd be interested to hear his response to the general Kākā thesis of what's wrong with our housing market. We already know what the NIMBYs in National think, I'd like to hear how he rationalises it as someone who understands the issues.
I wish. I keep asking…
I'm interested in the political calculation behind the MDRS reversal from National. Surely there are just as many to benefit from this policy, including many over 50's who might be thinking the only way my kids will get into the housing market is if we spring for the deposit or build a townhouse or two on our property for them. Yes, I know there's a bit of racism (real Kiwis don't want to live in apartments etc) and some will face the prospect of losing a view or some sun. But even with this policy the pace of change will be slow and the chances of change arriving in your street in the next few years is probably quite small. I know the young don't vote in high numbers, but surely people in the construction sector, those with kids who need homes, and those locked out of the market won't be loving this U-turn. Has anyone checked Nicola Willis's temperature on this? I picture her sticking pins into a pocket sized voodoo doll of Luxon everytime he's speaking in public. Perhaps that's his problem 😆.
Ooh, get Nicola Willis back on the Hoon to get her take on National's MDRS U-turn. I'd make some popcorn for that!
I was wondering how much of this decision is based on heading off the murmurings of a leadership change
Ha! Hard to know, but I doubt this will lower temperatures in the caucus room, especially with Willis and Bishop, who are Luxon’s strongest colleagues.
Ha! I’d pay for a picture of said voodoo doll, and even more for an action-replay video. Just kidding. They’re both lovely people I wouldn’t wish anything sharp in their futures. But yes, I’m constantly surprised at how little imagination or empathy suburban owners have for others, let alone their own children. Leveraged and tax free gains are the main game now.
Luxon and Bishop are not lovely people!!! they both intend to enact legislation that will give people who are rich/wealthy enough to purchase two or more residential properties a colossal financial advantage over people who are able to purchase only one residential property.
extending free childhood to two. year olds Didnt take long for the story to switch to the negative about how child care centres wont be able to affird this because of tags.
My big question is how have we allowed for an essential service of public good to become a gravy train to private providers.
Well actually basically know the answer to this
Good question. I’m no expert in this area, but it is one of those publicly funded services that grew mostly after the cataclysm of the deregulations and attacks on the size of Government since 1984.
Childcare is definitely tied up in the housing mess. Increased availability of childcare for the under 5's has definitely increased the proportion of two parents working full time. Whether house prices meant both parents had to work or whether house prices went up because having two incomes increased the amount able to be borrowed, I'm not sure. Community childcare providers like Playcentre and Kindergarten have definitely suffered as parents look for longer hours and holiday cover. Corporate childcare is a mega business and I do worry about the outcomes for kids where there are 10 kids to a childcare worker. It would be interesting to hear from a social science researcher in this space but I don't know one.
This is good on this issue https://www.newsroom.co.nz/extra-cash-fails-to-fix-funding-issues-in-early-education?utm_source=Newsroom&utm_campaign=09ab82bd73-Daily_Briefing+25.05.2023&utm_medium=email&utm_term=0_71de5c4b35-09ab82bd73-97928272
Be interesting to know if any govt has considered extending school age down to say 3 and running ece in the same way as schools. Ie universal and funded out of general taxation.
We need state integration of Early Childhood Centres imo. We would benefit as a whole society too.
I agree but imagine the outcry
I used to be chair of the parents management committee of a community child care centre in the 90’s and I remember the private ones clise by cost more, had worse staffing ratios but some liked them as the kids were from “better families” and then the govt started funding the private ones
Bernard - would a US Govt default on debt cause a crisis-level, hyper-spike in interest rates in NZ?
Thanks Piet. I don’t think for long. The Fed would intervene to flood the system with cash and essentially fund the US Govt. More free money. Another bailout. Could mean lower interest rates for a while.
Hey B man I have a wicked idea, government to introduce mandatory labelling on food items similar to the energy efficiency label on electrical appliances. The label would have a mandatory profit margin declaration, to be fair not the difference between buy and sell prices but the profit after operating costs associated with that item. Yep I can hear the howling now, damn sure that would bring about competition
Off topics I know but during a cost of living crisis....
Thanks Phillip. Not impossible. The new Grocery industry regulator will be trying to create transparent reporting of profit margins. We’ll see…
I've thought about such a Health Star style labelling system, but encompassing broader set of sustainability criteria: Health, Water, Materials, Carbon... potentially some kind of Affordability measure
Affordability may not be an indication of reasonable pricing, my thought was to introduce a measure to curb supermarket profiteering to the obscene levels being presently enjoyed.
Do you have a standard website for the hoon - normally you provide a link, but not this time?