Briefly in the news in Aotearoa’s political economy around housing, climate and poverty on Tuesday, March 10:
Treasury has warned Finance Minister Nicola Willis of a stagflationary hit from Iran war energy price shock, with GDP growth being 0.2% to 0.4% lower than previous forecasts, while inflation would be 0.5% to 1.0% higher.
Oil prices hit US$119/barrel late yesterday, but are back at US$99/bbl at 6am after G7 comments that the world’s biggest economies were ready to release oil reserves.
Willis virtually ruled out the dropping of fuel tax hikes scheduled for early 2027 and early 2028, saying short term gains for consumers would come with long term pain of higher debt and interest costs for the Government.
Willis said she preferred earlier debt reduction for the Government, which means more mortgage stress for households, who have debts four times greater than the Government relative to incomes.
She said New Zealand needed to save for a rainy day such as a global economic crisis. In my view, this is likely to be a rainy day.
MBIE has advised that as of last Sunday, March 1, New Zealand had 25 days of diesel left and a further 29 days of stock ‘on the water’ in ships motoring to New Zealand. Australian fuel wholesalers have already started rationing. Paying subscribers can see more below the paywall fold & hear more in the podcast above.
