Dawn chorus: 'A range of views'
Reserve Bank Governor says international research isn't clear that lowering interest rates widens inequality and repeats that money printing and rates lowering avoided higher unemployment
TLDR: Reserve Bank Governor Adrian Orr said in a speech last night the bank’s review of the international literature had not found clear evidence that the lowering of interest rates and Quantitative Easing by central banks had worsened inquality of wealth or income.
He went on to again defend the bank’s lowering of interest rates and the resulting house price boom, saying it had worked to increase activity and had helped avoid a potential rise in unemployment to 6% (it’s currently 5.3%) and a 7% higher rise in the NZ dollar (it is up 7% since March) than if there had been no easing.
Meanwhile, Barfoot and Thompson reported the first hard sales figures for November, showing a 10.8% rise in Auckland’s average house price since June and the largest sales volumes in a month in five years.
Also, the Greens are opposing Labour’s higher tax rate bill in Parliament because it does not include a wealth tax. IRD estimated the new 39% rate, which applies to 2% of earners, would reduce inequality by 0.2%. Also, two backbench MPs have attacked China’s ‘coercive diplomacy.’
Overseas, Australia’s economy is out of recession, but US jobs numbers overnight were worse than expected.
In the local political economy this morning
In the global political economy overnight
Signs o’ the times news
Longer reads worth your time
Notable other views
Useful reports
Coming up
Today - Dec 3 Maiden speeches
4pm Simon Court (Act list)
4.15 pm Camilla Belich (Labour list)
4.30pm Rawiri Waititi (Māori Party, Waiariki)
4.45pm Debbie Ngarewa-Packer (Māori Party list)
Mon - Dec 7 - Cabinet meets and post-cabinet news conference due at 4pm
Tues, Dec 8 - Maiden speeches
4pm Chris Baillie (Act list)
4.15pm Nicole McKee (Act list)
4.30pm Ricardo Menendez-March (Green Party list)
4.45pm Teanau Tuiono (Green Party list)
5pm Tracey McLellan (Labour, Port Hills)
5.15pm Anna Lorck (Labour, Tukituki)
5.30pm Ayesha Verrall (Labour list)
Dec 8 - Stats NZ releases national population projections: 2020(base)–2073
Dec 9 - Parliament rises for 2020, followed by Press Gallery Party (woohoo!).
Dec 16 - Treasury releases its Half Yearly Fiscal and Economic Update (a full week to recover)
Dec 17 - Stats NZ publishes Sept qtr GDP
Dec 22 - Final cabinet meeting of 2020
Feb 1 - The Climate Change Commission will release its first draft of the national carbon budget under the Zero Carbon Act.
Ngā Mihi
Bernard
PS Thanks to Melissa Boardman for her pic today.
Hi Bernard, keep up the good work! The banks have the RBNZ hostage, as all of the QE given to banks has been channeled into house debt. The banks can keep pumping house debt knowing the RBNZ and the govt will do almost anything to protect house wealth. If houses go up another 15% to 20% next 12 months then what? I think NZ fundamentally does not think massive house wealth is a problem, the opposite, this country has been built on it. The narrative needs to be change more around what is the problem, what are the negative effects, risks etc for NZ? the current fear factor being promoted that house prices might fall and the risk to home owners is not resonating, and the market has taught house investors its also not likely! Example, if NZ is simply too expensive for renters and young people, then will another cohort leave! I think very possible once borders open.