RBNZ expected to detail $30-50b of new money printing in FLP for banks; Key questions? Whether or not strings are attached. Will LVRs be reintroduced; I argue for Helicopter Money instead
Banks struggle to channel this QE to productive activities (SME's) because of low risk appetite and being poorly organised towards this activity. Aussie has seen massive growth in non-bank or specialised banks like JUDO to take on the specialised activity of productive lending based on the activity risk. This has not happened here in NZ because there is almost no non-bank credit lines to tap into for non-banks to target SME's. See the link, this is what the RBNZ should look at
The Interest free loans form Govt here are good, but there needs to be a more sophisticated distribution capability to annalyse and distribute larger sums to meaningful businesses that can thrive in next 24 months. Not constrained by the limitations of the SME's assets as security (as in the bank model)
Very good point AB. I remember back in 2013 when Graeme Wheeler introduced LVRs that the RBNZ was worried that Australian non-banks would come over here and make out like bandits because they weren't restricted by the bank regs. Never happened. Hopefully the fintech stuff brewing will make it happening. Not surprisingly, the big banks are foot-dragging on open banking and the Commerce Minister Kris Faafoi has wagged his finger without much progress. cheers Bernard
Hey Bernard, the Aussie SME lenders and Ag capital providers are here, they have a considerable advantage over the NZ players due to access to non-bank and private credit lines in Aus. NZ capital markets just have no urgency and little interest in this category for capital. The local fintechs are severely constrained on credit lines, except Harmony. Lack of credit line and lack of non-bank distribution into SME at any scale will continue to constrain SME lending
David writes: It would be great if there was a place to go to get reliable answers to questions such as-
How does NZ housing affordability compare to other cities / countries ??
Can you quantify the difference that a CGT would make in housing prices in NZ? By how much more expensive are NZ houses compared to Aust houses because we don’t have a CGT?
What is happening with immigration? Shamubeel Eaqub said the other day that there was no longer a net migration gain but one argument for the housing spike is that cashed up returning Kiwis are buying ?
I guess both can be true
How do NZ electricity prices compare to prices elsewhere in the world? Given our grandparents paid for the hydro they should be cheaper than most
How do NZ wages compare to other places in the world? Used to be shit compared to Australia which is why so many working people, me included, have lived in Australia. Kiwis left for better pay in Australia, NZ kept immigration going so as not to turn the lights off.
How much do/did Kiwis spend annually on overseas travel? How much do/did foreign tourists spend annually in NZ?
Cost benefit analysis for Tiwai Point not producing energy for aluminium production – what if we had more electric cars using the energy and less oil imports? Cost to get the power to the North Island
Basic information about Money Printing, Central Banks & MMT. Public versus private debt, Debt to GDP ratios etc.
Taxing the FANGS
Solutions for the supply of housing in NZ
The affect of asset price inflation on housing costs for renters.
Welcome any suggestions from readers. Cheers Bernard
Banks struggle to channel this QE to productive activities (SME's) because of low risk appetite and being poorly organised towards this activity. Aussie has seen massive growth in non-bank or specialised banks like JUDO to take on the specialised activity of productive lending based on the activity risk. This has not happened here in NZ because there is almost no non-bank credit lines to tap into for non-banks to target SME's. See the link, this is what the RBNZ should look at
https://www.aofm.gov.au/sfsf
The Interest free loans form Govt here are good, but there needs to be a more sophisticated distribution capability to annalyse and distribute larger sums to meaningful businesses that can thrive in next 24 months. Not constrained by the limitations of the SME's assets as security (as in the bank model)
Very good point AB. I remember back in 2013 when Graeme Wheeler introduced LVRs that the RBNZ was worried that Australian non-banks would come over here and make out like bandits because they weren't restricted by the bank regs. Never happened. Hopefully the fintech stuff brewing will make it happening. Not surprisingly, the big banks are foot-dragging on open banking and the Commerce Minister Kris Faafoi has wagged his finger without much progress. cheers Bernard
Hey Bernard, the Aussie SME lenders and Ag capital providers are here, they have a considerable advantage over the NZ players due to access to non-bank and private credit lines in Aus. NZ capital markets just have no urgency and little interest in this category for capital. The local fintechs are severely constrained on credit lines, except Harmony. Lack of credit line and lack of non-bank distribution into SME at any scale will continue to constrain SME lending
David writes: It would be great if there was a place to go to get reliable answers to questions such as-
How does NZ housing affordability compare to other cities / countries ??
Can you quantify the difference that a CGT would make in housing prices in NZ? By how much more expensive are NZ houses compared to Aust houses because we don’t have a CGT?
What is happening with immigration? Shamubeel Eaqub said the other day that there was no longer a net migration gain but one argument for the housing spike is that cashed up returning Kiwis are buying ?
I guess both can be true
How do NZ electricity prices compare to prices elsewhere in the world? Given our grandparents paid for the hydro they should be cheaper than most
How do NZ wages compare to other places in the world? Used to be shit compared to Australia which is why so many working people, me included, have lived in Australia. Kiwis left for better pay in Australia, NZ kept immigration going so as not to turn the lights off.
How much do/did Kiwis spend annually on overseas travel? How much do/did foreign tourists spend annually in NZ?
Cost benefit analysis for Tiwai Point not producing energy for aluminium production – what if we had more electric cars using the energy and less oil imports? Cost to get the power to the North Island
Basic information about Money Printing, Central Banks & MMT. Public versus private debt, Debt to GDP ratios etc.
Taxing the FANGS
Solutions for the supply of housing in NZ
The affect of asset price inflation on housing costs for renters.
Welcome any suggestions from readers. Cheers Bernard
A good place to start on MMT is Warren Moslers "7 Deadly Innocent Frauds, of Economic Policy" available for free download from his website, as a pdf