Dawn chorus: Greens want 2030 car ban

Shaw to challenge Ardern in Cabinet on climate change car imports; Wellington City Council eyes 23% rates hike, but shouldn't it be using its balance sheet first? Fed set to do more heavy lifting

TLDR: Morena. James Shaw is putting the heat on Jacinda Ardern’s ‘nuclear-free moment’ pledge on climate change with a plan to propose a ban on petrol and diesel imports by 2030, as the UK is planning. He also says a wealth tax would help the Reserve Bank control the housing market fire.

Wellington City Council is considering a 23% rates hike next year to offset the Covid-19 hit to revenues and to help pay for decades of previous under-investment in pipes as the capital’s water infrastructure crumbles. But why is most of the weight going on rates?

Why not use a strong balance sheet and borrow? It has capacity within the new 300% debt to revenue limit set by the LGFA and it is only the inherent conservatism of the Council’s fiscal managers that is stopping the Council. It has set an internal limit of 175% of income, almost half the already-too-low level set by the LGFA.

Elsewhere, at least one in four property investors aren’t complying with the brightline test. Meanwhile, Global stocks are at record highs in anticipation of more central bank money printing to take up the load because America can’t organise a looser fiscal policy. The idea of moral hazard has long gone.

Who you lookin’ at?: Photo: Subscriber Martin

In our political economy this morning

Bernard Hickey @bernardchickey

What will 'Te Atatu Man' think of a ban on his double cab utes within 10 years? Now we get to see how serious the PM is about 'this generation's nuclear free moment'

stuff.co.nzTime to consider petrol and diesel car import ban, says Climate Change MinisterClimate Change Minister James Shaw worries, without a ban, we’ll become the world’s dumping ground for old fossil-fuelled bangers.

Bernard Hickey @bernardchickey

Here's what happens when you under-invest in infrastructure for decades to keep rate increases and debt low. Yet none of the councillors are asking why Wellington is not using its balance sheet (ie borrowing) to deal with this?

stuff.co.nzWellington considers 23 per cent rates hike as cost avalanche hitsThe proposed rates rise would be the biggest since a 16 per cent hike in 1995-96.

In the global political economy overnight

Bernard Hickey @bernardchickey

The latest Covid-19 surge is hitting American shoppers, the engine room of the global economy. And the US Govt is frozen because of Trump's refusal to concede or help the transition. So, of course, the central bank is expected to do all the work

reut.rsU.S. retail sales slow amid pandemic, lack of fiscal stimulusU.S. retail sales increased less than expected in October and could slow further, restrained by spiraling new COVID-19 infections and declining household income as millions of unemployed Americans lose government financial support.

Bernard Hickey @bernardchickey

At record highs, despite the biggest economic shock in our lifetimes, stock markets are now looking for more bailout money printing from the Fed. The lesson? There's always a bailout for asset owners.

reut.rsAnalysis: Despite vaccine progress, investors eye Fed support as coronavirus surgesInvestors are weighing the chances the Federal Reserve will increase its purchases of U.S. government debt in coming weeks to counteract the economic fallout of a COVID-19 resurgence, an intervention that could reverse a recent rise in Treasury yields to multi-month highs.

Signs’ o the times news

Bernard Hickey @bernardchickey

One-in-four property speculators dodging housing tax. 'Inland Revenue is also looking at 3758 sales where the bright-line test might apply, meaning the 75 per cent figure could increase. It says it is working through the backlog.'

stuff.co.nzOne-in-four property speculators dodging housing taxAlthough property speculators are making millions in an overheated market, nearly a quarter aren’t paying taxes they owe on their earnings.

Bernard Hickey @bernardchickey

Interesting idea. Can't imagine the real estate agents would be thrilled. No doubt that's why it's a private sale...

stuff.co.nzFirst-time buyers given first dibs on Nelson family homeA real estate agent warned them they’d undersell their property, but a Nelson couple are determined to sell to first-time buyers in a private sale.

Bernard Hickey @bernardchickey

This issue is building into a major one globally.

stuff.co.nzFood council warns perfect shipping storm could affect groceries over ChristmasContainer shortages, busy ports and fewer ship arrivals could affect food supplies over the next six months.

Bernard Hickey @bernardchickey

This is one way to help @ReserveBankofNZ solve its low inflation problem... 'What we might see is lessening of discounts that we might otherwise see during Black Friday and in the run up to Boxing Day'

rnz.co.nzImporters demand answers over delays at ports<p>Importers are demanding answers as to why their goods are being held up at Ports of Auckland.</p> <p>Some New Zealand retailers fear their shelves will be half empty as they approach the festive season.</p> <p>Last week, Mainfreight managing director Don Braid told <em>Checkpoint </em>Ports of …

Bernard Hickey @bernardchickey

The definition of monopsony. It's one of the big problems globally. Not just power to inflate consumer prices. The power to lower supplier prices.

rnz.co.nzSuppliers fear bullying from some supermarkets, Food and Grocery Council CEO says<p>Some supermarkets are threatening to “delete” suppliers’ products from shelves if they speak out about tactics like 45 percent margins and billing for thefts, a supplier industry group says.</p> <p>The accusations come as the government orders its promised year-long Commerce Commission market st…

Benedict Xu-Holland @xuholland

@bernardchickey NSW out spending NZ by 2.5x in terms of total infrastructure projects / in per-capita terms they are spending 1.6x more.

smh.com.auNSW charges ahead with $107 billion infrastructure pipeline despite record deficitIn delivering a $16 billion deficit, Treasurer Dominic Perrottet said the unprecedented infrastructure pipeline would form a key pillar in rebuilding the economy.

Useful reports

Here’s the Cabinet paper on the supermarkets competition inquiry announced yesterday.

Here’s a Tourism Industry Aotearoa survey showing just over half of its operators cut staff during the Covid-19 lockdowns, but now 60% are having trouble finding staff…

Coming up…

Today - PM Jacinda Ardern will give a speech this morning at Infrastructure NZ’s conference in Auckand

Sat Nov 21 - National Party AGM due to vote on re-election of President Peter Goodfellow. He has confirmed he will run again.

Weds Nov 25 - 2pm - Reserve Bank to publish six monthly Financial Stability Report (FSR) . Expected to warn of re-imposition of high LVR lending limits from May 1, 2021.

Weds Nov 25 - Opening of Parliament for 53rd term, including swearing in of new MPs

Thurs Nov 26 - Speech from the throne in Parliament outlining Government’s agenda

Weds Dec 9 - Parliament rises for the year.

Ngā Mihi

Bernard

PS: Thanks to subscriber Martin for his Kākā pic today. A chunky number. (The Kākā) Send in your favourite pics for me to use too.

PPS Some fun things

Ally Maynard @allymayn

Fox News and Facebook did to our parents what they said video games would do to us.

Cory, on Rails 🚉 @AitkesAndPains

@Callan_Neylon Tfw Michael Cullen does a better job promoting Social Credit than the Social Credit Party 🤔