Labour's $4b of budget cuts announced 12 hours before IMF warning to tighten Budget to control inflation; But IMF's own analysis shows profits drove more than half of inflation spike
Aug 29, 2023·edited Aug 29, 2023Liked by Bernard Hickey
Your blurb for this is so on point Bernard. NZ is a sovereign currency nation. We can give the IMF the good old kiwi middle finger. They are a pointless organization for us, since we are not pegged to the USD and not on a gold standard. Our exports pay for our imports in real terms, since we have a floating exchange rate. If Robertson or anyone on his staff pays any attention to the IMF I think they should be sacked. IMF cannot issue NZD, and once issued cannot tax them back out.
Thanks Bernard, yet another clear example of the myth that somehow Labour is the lesser of two (only 2 ?) evils. 😳 Who needs Plan B when we hit the iceberg some time ago and and even a cursory glance shows there are no life boats. That’s zero, zilch, none.
Aug 29, 2023·edited Aug 29, 2023Liked by Bernard Hickey
Excellent interview Bernard with some incredibly thoughtful insights from Craig and Ed. I love one of Craig's parting comments: "If the best answer [to inflation] is to make 55,000 households poorer....get a different answer!!" Absolutely spot on!! Thank you.
While I agree it's unfair monetary policy affects people this way, the answer to the question seems pretty clear. When mortgages are more expensive people have less to spend on cheese, so cheese makers are forced to lower prices to meet the market - basic supply and demand. (Dylan ducks for cover)
Agreed. Problem is that inflation reduction is RBNZs goal, not making things more affordable for households. By increasing interest rates they can bring down inflation so your block of cheese will have a lower price but it might be even less affordable because you now have no disposal income 😮💨
Thanks for another wonderful podcast. Sorry for going off topic, but does anyone know if there was any follow up to the report finding that paper pushers wasted money promised to the mental health frontline? Is it another case of “She’ll be right” or were measures put in place to save lives as promised?
Lack of money in Mental Health Services, or to be more correct - diversion of money away from acute services, does lead to deaths. I think the victim in this article JAL, should not have died, but also that the killer, however we feel about him, should have been given the acute care he needed to prevent this tragedy. Both, in fact, are victims of an underfunded system. At an enquiry in Australia, my family was told that my daughter's suicide was preventable, but that due to lack of funds, the pressure was on to release her at her own request. (People in psychotic crisis have no insight). She was released into the dark streets, so that her father, who they knew was on his way to collect her, had to hunt for her. Not good enough, but also, the excuse is, and may well be, lack of funding to provide the service in a safe manner. This is not, here in NZ at least, a "She'll be right" matter. She is dead. This nice elderly man in Napier is dead. His killer is still lacking insight and obviously has not received the care that people need when they are a danger to themselves or others. Can we have news of any follow up Bernard? Let's keep these slippery officials in our sight.
I completely agree with you, Beverley. There’s many victims from this bullshit lack of accountability of fund management. I don’t believe they wasted millions of dollars because they didn’t know what to do with it. And even if they were that stupid, a shoulder shrug “She’ll be right!” is just not acceptable. That money needs to be replaced and it needs to make it to the frontline ASAP. I’m so sorry for your loss.
As a non-economist, I marvel at the term 'wage inflation'. What a lovely way to keep some working people poor. You should hear some Tories wisely telling poor working Brits 'to just earn more' to cope with consumer goods inflation.
Apologies- my comment is hidden in a thread - so posted here! It's First Dog on the Moon's cartoon about profit driven inflation, using the price of a block of cheese (in Australia) as the example. Anybody else love FDOTM's insights?
Your blurb for this is so on point Bernard. NZ is a sovereign currency nation. We can give the IMF the good old kiwi middle finger. They are a pointless organization for us, since we are not pegged to the USD and not on a gold standard. Our exports pay for our imports in real terms, since we have a floating exchange rate. If Robertson or anyone on his staff pays any attention to the IMF I think they should be sacked. IMF cannot issue NZD, and once issued cannot tax them back out.
Thanks Bernard, yet another clear example of the myth that somehow Labour is the lesser of two (only 2 ?) evils. 😳 Who needs Plan B when we hit the iceberg some time ago and and even a cursory glance shows there are no life boats. That’s zero, zilch, none.
It’s gin o’clock here.
Why doesn't Treasury think like this?
Excellent interview Bernard with some incredibly thoughtful insights from Craig and Ed. I love one of Craig's parting comments: "If the best answer [to inflation] is to make 55,000 households poorer....get a different answer!!" Absolutely spot on!! Thank you.
I can’t escape my mortgage payments.
I can choose to not buy a block of cheese.
How does making my mortgage more expensive lead to cheaper cheese?
Excellent question Bevan. And no GST off cheese either...
While I agree it's unfair monetary policy affects people this way, the answer to the question seems pretty clear. When mortgages are more expensive people have less to spend on cheese, so cheese makers are forced to lower prices to meet the market - basic supply and demand. (Dylan ducks for cover)
(Bevan chuckles, knows how he feels)
I get the logic there.
But I wonder how it works when not everyone has a mortgage.
And I wonder why inflation itself doesn’t do that work.
Agreed. Problem is that inflation reduction is RBNZs goal, not making things more affordable for households. By increasing interest rates they can bring down inflation so your block of cheese will have a lower price but it might be even less affordable because you now have no disposal income 😮💨
Totally I had to rewind to listen to the statement twice. 👏🏽
Release please Bernard
Patrick Medlicott
Thanks Bernard, fantastic interview, if we ever needed people with this level of insight and empathy in parliament, it is now. Please release it.
I wish people cared about nitrates in waterways at least as much as emissions etc
Great interview with looking at inflation from view of profit increases. Never heard this idea before but please get it out there.
Great kaka today Bernard!!
There report needs to be pushed and pushed during this upcoming election and not just retired to yesterdays news feed!!!
Thanks for another wonderful podcast. Sorry for going off topic, but does anyone know if there was any follow up to the report finding that paper pushers wasted money promised to the mental health frontline? Is it another case of “She’ll be right” or were measures put in place to save lives as promised?
https://i.stuff.co.nz/national/crime/300959534/dads-selfless-act-of-kindness-cost-him-his-life--daughter-of-killed-man
Lack of money in Mental Health Services, or to be more correct - diversion of money away from acute services, does lead to deaths. I think the victim in this article JAL, should not have died, but also that the killer, however we feel about him, should have been given the acute care he needed to prevent this tragedy. Both, in fact, are victims of an underfunded system. At an enquiry in Australia, my family was told that my daughter's suicide was preventable, but that due to lack of funds, the pressure was on to release her at her own request. (People in psychotic crisis have no insight). She was released into the dark streets, so that her father, who they knew was on his way to collect her, had to hunt for her. Not good enough, but also, the excuse is, and may well be, lack of funding to provide the service in a safe manner. This is not, here in NZ at least, a "She'll be right" matter. She is dead. This nice elderly man in Napier is dead. His killer is still lacking insight and obviously has not received the care that people need when they are a danger to themselves or others. Can we have news of any follow up Bernard? Let's keep these slippery officials in our sight.
I completely agree with you, Beverley. There’s many victims from this bullshit lack of accountability of fund management. I don’t believe they wasted millions of dollars because they didn’t know what to do with it. And even if they were that stupid, a shoulder shrug “She’ll be right!” is just not acceptable. That money needs to be replaced and it needs to make it to the frontline ASAP. I’m so sorry for your loss.
FYI I’ve now opened this up for full public consumption and spreading.
As a non-economist, I marvel at the term 'wage inflation'. What a lovely way to keep some working people poor. You should hear some Tories wisely telling poor working Brits 'to just earn more' to cope with consumer goods inflation.
https://thekaka.substack.com/p/budget-cuts-to-beat-profit-driven/comment/39258486?utm_source=share&utm_medium=android&r=p9tfp
Apologies- my comment is hidden in a thread - so posted here! It's First Dog on the Moon's cartoon about profit driven inflation, using the price of a block of cheese (in Australia) as the example. Anybody else love FDOTM's insights?
Thank you Gentleman
Man!!! This was crazy interesting
Cheers