The Kākā by Bernard Hickey
The Kākā by Bernard Hickey
Austerity thumps GDP most since 1991
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Austerity thumps GDP most since 1991

Nicola Willis denies responsibility for worst recession since 1991, when Ruth Richardson unleashed the Mother of All Budgets; Willis' austerity strategy contrasts with English's approach in 2008-11
Our economy has experienced its worst recession since 1991. Photo: Lynn Grieveson / The Kākā

Mōrena. Long stories short, the six things that matter in Aotearoa’s political economy around housing, climate and poverty on Friday, December 20 in The Kākā’s Dawn Chorus podcast above and the daily Pick ‘n’ Mix below are:

  1. Statistics NZ reported GDP fell 1.0% in the September quarter from the June quarter, which was more than twice as bad as most economists forecast and meant the economy experienced its worst recession since 1991.

  2. The recession was caused by the Reserve Bank hiking rates higher and for longer than other countries, along with the new Government launching the most aggressive austerity since Ruth Richardson’s Mother of All Budgets in 1991.

  3. Nicola Willis blamed the recession on the previous Labour Government for creating high inflation and the resulting Reserve Bank response, while Chris Hipkins blamed the Government’s austerity. See more in Quotes du Jour below.

  4. The Government's first report under the Paris Agreement gave no answers on where it will find 84 million tonnes of emissions reductions currently missing from it's climate plans, putting trade deals with the UK & EU in jeopardy.

  5. The Government has delayed committing to filling the gap by buying emissions credits overseas, partly because starting to buy credits would force Treasury to recognise the entire gap as a liability of up to $23 billion. RNZ’s Eloise Gibson.

  6. The Ministry for the Environment announced quietly yesterday the Government had dumped plans for council kerbside recycling and food scraps collections and removed its 2025 deadline for a third tranche of plastic phase-outs.

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The Top Six in the Pick ‘n’ Mixes

  1. Health & austerity: Deeply disturbing, demoralising, distressing and retrograde' - experts slam palliative care staff cut plan. The Post-$’s Nikki Macdonald

  2. Austerity & justice: Prisoner's wife slams decision to slash phone call times RNZ’s

  3. Poverty & austerity: Fifth of beneficiaries paid too little, MSD survey shows RNZ

  4. Austerity & politics: Roger Douglas says ACT taken over by libertarians and bankrupting NZ NZ Herald’s Thomas Coughlan

  5. Austerity: Fears for whānau as hospital's obstetric services collapse RNZ’s

  6. Climate & democracy: Newsroom calls for entries for the Rod Oram Memorial Essay Prize from young writers describing “what we must do now to ensure future generations live well in Aotearoa NZ.”


The Best of the Rest: Pick ‘n’ Mixes for Friday, Dec 20

Scoops & news breaking this morning

  1. Housing & poverty: Gang members occupied vacant Kāinga Ora land, put up marquee after request declined Stuff’s Marty Sharpe

  2. Health & austerity: No budget for psychiatric beds despite being over capacity RNZ’s Jimmy Ellingham

  3. Housing & economy: Winton Land 'pauses' $750m Wynyard plans, offers buyers refunds for 152 apartments. CEO says ‘We want to get the timing in the cycle right. NZ Herald-$’s Anne Gibson

  4. Electricity & austerity: Council’s electricity costs jump 53% The Post-$’s Tina Law

  5. Geopolitics & economics: US Congress has two days to avert shutdown after Trump rejects spending bill Reuters

  6. Climate: US sets new Paris climate target that Trump is expected to ignore Reuters

News yesterday and news previews

  1. Politics & Te Tiriti: PM Luxon will not attend Waitangi at all next year RNZ

  2. Poltics: Government to change free speech rules for universities RNZ

  3. Economy & migration: 190 workers may lose visas as company folds amid migrant exploitation probe RNZ

  4. Economy & austerity: Restaurant and cafe sales down RNZ

  5. Business: Greg Foran signals more turbulent times ahead Stuff

  6. Economics: Fed lowers rates but sees fewer cuts next year Reuters

Signs o’ the times news

  1. Infrastructure & politics: Council votes to ease into water charges Stuff

  2. Austerity: Hamilton Gardens rakes in cash, but visitor numbers drop Stuff

  3. Te Tiriti: Teachers’ union to file Waitangi claim Newsroom’s Laura Walters

  4. Climate: Oil Sector Lobbies Trump to Spare It from Tariffs and Regulation AP

  5. Climate & politics: Nuclear bunker sales are booming AP

  6. Climate: China’s getting big electric car battery swapping boost. AP

Solutions & good news

  1. Housing: Families move into Ōrākei housing development NZ Herald

  2. Te Ao Māori: Expanded foodbank finds recipe for survival RNZ’s Pokere Paiwai

  3. Climate & transport: Biggest repair job in region's history ends RNZ

  4. Health & poverty: Māori asthma hospitalisation rates fall RNZ’s Emma Andrews

  5. Te Ao Māori: Access to Tāne Mahuta restored RNZ’s Peter de Graaf

  6. Climate: Global warming can’t be ignored, Montana court says, AP

Deep-dives, interviews, features & analysis

  1. Climate: Significant gap in government's first Paris report RNZ’s Eloise Gibson

  2. Housing: ‘Housing minster called out over state home hold-up“. The Post-$

  3. Health: ‘Everyone’s disappointed’ as gym for ‘all walks of life’ shuts down Stuff

  4. Environment & Kākās: Could NZ’s two kākā subspecies actually be remnants of a more diverse species? The Conversation

  5. Explainer: ‘How balcony solar is taking off in Germany The Guardian

  6. Explainer: Ireland’s data centres now consume too much of its energy AP

Columns and op-eds

  1. Op-Ed by Philippa Howden-Chapman & Claire Aspinall in NZ Herald: No room at the inn for homeless Kiwis needing help at Xmas

  2. Op-Ed by Uni of Otago and Uni of Otago researchers in Newsroom: Wheels off the bus: bikes on buses do us good

  3. Op-ED by Robert MacCulloch in The Post-$: How the Government’s Green Investment Fund turned us into predatory lenders

  4. Column by Josie Pagani in The Post-$ The Christmas guide to post-woke

  5. Op-Ed by Myles Thomas in The Post-$: Another do-nothing media minister

  6. Op-Ed in PHCC: Treaty Principles Bill threatens public health and equity

Official reports, statistics, academic papers & data sets

  1. Economy: Statistics NZ reported GDP fell 1.0% in the September quarter.

  2. Health & poverty: Health NZ’s Q3 report showed immunisation rates for toddlers fell further and patients waited longer for specialist appointments. RNZ

  3. Housing & investing: Massey University’s David White published his thesis titled The Impact of Residential Property Investors on House Price Escalation in Auckland New Zealand, finding “sustained over-pricing by investors caused by an over-estimation of capital gain and an under-estimation of downside market risks.” Massey release & RNZ

  4. Economy & business: ANZ’s Business Outlook survey for December found business confidence eased 3 points to +62, but expected own activity rose 2 points.

  5. Poverty & austerity: MSD published its first Full and Correct Entitlement (FACE) report showing 32% of the 1,432 beneficiaries surveyed between July 2022 and June 2023 received less than their full entitlement, while 8% received more. The report was recommend by the 2019 Welfare Experts Advisory Group (WEAG).

  6. Climate & geopolitics: The UNFCCC published New Zealand’s first Biennial Transparency Report on how Aotearoa will achieve its Paris targets.


Quotes du Jour: Differing views

“With the climate that's happening now, the economic climate, a lot of whānau can't afford the rent because of the high cost of living. A lot of our whānau have lost their jobs due to working for the public sector or businesses have closed down so it's really hit home." Ngāti Toa’s Naomi Siania via RNZ’s Pokere Paiwai

“These are the scars on our economy caused by a government that was reckless in it's spending, drove up inflation and left the Reserve Bank to slam on the brakes, that flowed through into the real economy. We always said our job was to get inflation under control, to get interest rates falling so that growth could revive. We've made massive progress on that this year, and so now our task is to drive that growth engine even faster.” Nicola Willis


Chart du Jour: ‘Bill English was no Ruth Richardson’

MusicalChairs via BlueSky: “Incredible re-write of history by Taxpayers Union ghouls #NZPol. When the GFC hit, the newly elected National Govt tore up the previous Govt's budget and turned up the spending (capital projects particularly). This was ofc the right thing to do. Only total idiots cut spending into a recession.”

Cartoon du Jour: The finishing touches

Rod Emmerson via NZ Herald-$ & BlueSky

Timeline-cleansing nature pic: Flax fest

Photo by Kōtare on Substack Notes and republished with permission.

Mā te wā. Bernard

Discussion about this podcast

The Kākā by Bernard Hickey
The Kākā by Bernard Hickey
Bernard Hickey and friends explore the political economy together.