Ongoing jobs slump, stalled housing market & rising global growth & inflation headwinds starve economy of GDP growth in 2025, forcing Luxon & Willis to grasp at straws, in absence of real tax reform
This one is really interesting/depressing/alarming
“For the first time residential electricity demand is exceeding industrial demand. This is a clear signal of deindustrialisation.”
Particularly since residential demand would have been decreasing due to the increase in solar I assume, and there has not been a massive growth is residential housing over the last years
Don't underestimate the effects of rooftop solar uptake which is increasingly popular and will become even more so as retail electricity prices rise in the coming months and years.
In our own case our rural lifestyle property has a total annual electricity spend of around $300. This is despite charging 2 EVs and assorted battery garden tools, pumped water supply, 2x 700L chest freezers and the usual range of household appliances. The shortfall economically relates to lines charges as our total generation equals our total consumption in energy terms.
Also the incoming changes to AS/NZS 4777.1:2024 electricity regulations will also expedite V2G connectivity which together with falling battery prices will serve to further incentivise energy self sufficiency for those with rooftop solar.
Yeah… since installing solar +batteries last August we cut off over 50% from the bills… and with cheaper batteries and panels coming from China (tariff free) there would be more uptake for sure
Our nation has come to the tipping point of 200 odd years of systemic financial failure.
The bottom line is that the foreign privately owned, Primary Bond Dealer Investment Banks, that underwrite our nation's money supply as debt owed to them securitised by our forecast spare economic capacity have been cooking the books for fraudulent profits that has sucked the economic lifeblood out of us.
The external debt liabilities they have created now stand at 5x the present economic capacity of the nation and I for one do not believe for a minute we have the spare capacity to ever clear that amount of debt they have written us.
Especially given that 65% odd of that debt has been written (Literally how they do it) then pumped into residential housing which is a nonproductive sector which has become nothing but a wealth transferring debt throughput scam from the productive economy, hidden by the fact that house and land prices are not accurately measured in the measure of inflation used for monetary policy adjustment.
No amount of tax redistribution, selling stuff or anything that gives stuff to foreigners wanting more than they give can redress this toxic money as debt predistribution imbalance.
Only legally questioning the integrity of the level of foreign debt being held to our head like a gun and getting relief from that of it that is illegally odious can ever apply a defibrillator to the failing heart of our economy, as Iceland did when the private banks had done the same to it.
The chart and ‘analysis’ from NZ Energy is more likely to show correlation rather than causation, and if there is causation I would suggest the recession is reducing industrial energy demand. Growth forever - excellent piece by Mike Joy in Newsroom today
Of particular note, the comment left by Dr Earl Bardsley
"If a data centre wants to set up here, the response always seems to be “how do we ensure sufficient electricity to meet their needs?”. A better question might be related to why we should impose further on our natural environment in order to provide the green electricity sought by data centres. Is the economic gain worth the incremental environmental loss?"
Thanks for the link—Mike Joy’s warning is hard to ignore, backed by solid research and some pretty compelling evidence. He makes a strong case against Luxon’s "GDP growth at any cost" approach, but where’s the plan for a real transition? How do we make sustainability an obvious win—something that boosts economic security, improves wellbeing, and restores the environment in ways people can see and feel in their daily lives? The real challenge now is shaping a transition agenda and policy no one can ignore or argue against.
I read last week (The Post I think) that the NZ Initiative is busy whispering in Willis' ear that the way to pay for her corporate tax cut is to - you guessed it - raise our already punishingly high GST! A way to grow inequality not productivity....
Taxing consumption appears to be the new method of punching down at the poor. The orange dickhead in Washington is doing the exact same thing with tariffs....
You scare me. GST lowering to 10% would be a huge incentive to all. Easy to calculate & a fairer take by government from those who have to spend all income to stay afloat. GST is NOT a level.playing field.
I am not an economist (I have that in common with our Finance Minister) but my gauge of how badly things are going is the number of cars, boats and caravans for sale on the side of the road.
I have never before seen as many as I'm seeing now.
Even the most ideologically-myopic politician can surely see that raising GST in such a scenario is a one-way ticket to political oblivion.
I've heard this before and think it probably is a better indicator of what is currently going on than most reports would give you. I remember too back in mid - late 2020, the number of brand new cars and toys popping up on every street in every driveway was noticeable!
In terms of 'other' options - I'm not convinced there will be significant fiscal loosening in Budget 2025 via govt spending, noting the objective is political rather than economic. For political gain, my bet would be for the "true to form" from this Government will be TAX CUTS (individual) - they are also quick (for a short-term bang), and will serve their purpose of putting more in pockets for 'hard-working Kiwi taxpayers', and their goal of reducing the size of government. It will look like a fiscal loosening, but it will be for political not economic reasons. And, will be detrimental for long term prosperity - but will make some of us feel good.
You posit investment capital as a driver to provide the 'juice' - I'd be pointing to workforce availability as a noticeable short-term constraint. Yes, that may sound counter-intuitive given unemployment numbers, but to get government services back up requires health and education professionals that are not readily available. Or, we go the construction route, but that workforce is also not 'on tap' - as many have disappeared.
I know different perspective, but would prefer a much longer-term (dare I say sustainable) plan of investment in infrastructure and people for the future rather than more short-term 'juice'. In interim want serious 'supports' around disconnected and disaffected communities - not just more and more sanctions.
No rant is too long with this government; It is hard to be succinct when discussing the ways they are failing us as a nation. They are embarrassingly outdated and out of step with where other leaders and other nations - who have a better understanding of the changes in geopolitical, macroeconomic, and meteorological winds, are heading. Going around hoping the RBNZ fairy and foreign sugar daddies are going to resuscitate this economy is laughable.
I've been reading and listening to Russell Napier's talks lately, and he lays out the evidence for a shift towards national capitalism. In short, in-shoring is the way the tide is heading, and national savings accounts (e.g. KiwiSaver) will be the resource. The anarchy of Trump 2.0 is going to add to this jolt, as leaders realise the US can no longer be relied upon. Many nations' pension funds are largely spent blindly buying up US stocks - instead, they can be directed to purchase government bonds at interest rates the government controls to fund local investments in infrastructure and defense. Interestingly, Napier notes that this allows for a period of 'managed' inflation slightly higher than we're used to to inflate away existing debts. Workers will win, savers will lose.
Ignoring this trend won't save us from higher inflation, we'll be at the mercy of off-shore energy prices, tariffs, supply chain disruptions, tearing up of FTAs, extreme weather events. 2022/23 should have been a wake up call for us. No party here is proposing any path forward that protects us from what was and will be the sources of inflation going forward. Too many are still blaming government spending!
"Embarrassingly outdated" - I'll say. I feel like I'm watching an episode of mad men every time they speak. Compared to what some other countries are doing and embracing the future ours seem to be pining for the days of old
What role will an enacted RSB have in all this? Do you think the govt is looking to extreme deregulation to help them out of the hole they’ve dug/ part of a strategy for corporatisation of govt - would it attract foreign investment if they could do whatever with limited controls& consequences, favourable tax terms etc?
RSB will be (somehow) circumvented if it stands in way of foreign investment, deregulation, corporatisation etc. Only control on above will be political - in current environment that means NZFirst😢@#$!?
Who knew? Turns out Luxon and Willis are big fans of strategies that will expedite and accelerate New Zealand’s exit from first-world membership. Perhaps Willis didn’t want to pay the subscription fee? 🤔
The government’s infrastructure priorities are vital. The insane amount of money to build the RoNS isn’t going to shock the economy back into life. They have a negative economic benefit. They represent an investment in poor urban planning and housing strategy. Enabling property development in remote places. Infrastructure is schools, hospitals and hitching NZ to the global digital economy
5. Willis has begun in recent days floating the prospects for a corporate tax CUT as a way to juice economic growth, but past experience shows it hasn’t increased investment from either local or foreign investors, and would also place an extra drag on Government revenues at a time it says it wants to tighten policy.
Thanks Bernard. You accurately portray the state of the housing market. But isn't this what we all wanted? No sarc there. Prices get too high, there is no painless way to bring them down.
You're right, of course: Lots of people did claim to want house prices to drop, but that was just the impulsive reaction. No one actually wants house prices to drop (including potential buyers hoping this "thing" will set them up for retirement). What thoughtful people really want is for them to become more affordable to all - that is, our wages to rise, and our everyday costs to fall so we have more to put into housing. The government increasing wage competition (unemployment), and increasing costs (privitisation, cut-backs etc) are clearly the opposite of this, but it all lines up with their actual desire, which is to make housing a good investment (for their wealthy friends).
The fact is if house owners (living in this house) want to sell & purchase elsewhere it is the same market.
The inflated values have dropped & so sellers need to get real & move on.
Have personally faced this option, turned my brain on & realised facts.
Result self in home I love, first time buyer in home I did love. Be great to have 2022 price when sold but unrealistic. Would the inflated figure in my pocket make me happier,no. Happy is having a choice.
The shameless hypocrisy of this government - I followed the link to The Press article re the housing crisis and older folk, In the article the CMM state they would like to build more but funding has been withdrawn, yet the article concludes with a Bishop and the local Gnat MP taking credit as they hand over the keys to the new tenant. That sort of crap makes me very angry.
This exposes how financially, logically, business-illy illiterate this govt is. They simply have no clue what they're doing, no vision, no fresh ideas (as a matter of fact, the ideas that work aren't fresh either!). Nothing. Empty vessels.
Wikipedia should put all of their photos under the meritocracy myth definition.
My teenage grand daughter was telling me of her current shopping predilections recently, how she goes mainly goes to op shops or one of several online secondhand clothing outlets, refusing to buy new. The details seemed idiosyncratic at the time until I read the attachment below on RNZ this morning. I wonder now is this a rationale young people tell themselves in days when unemployment is high and part time work, especially for students is next to impossible to find? Or is it oligarchy dependent media outlets like RNZ spinning a narrative to legitimate young people having to survive on meagre means? Or, dialectically speaking both? They merits of recycling aside, is impecuniousness now fashionable?
'I want to be as naked as legally possible' - The many looks of Laneway 2025https://www.rnz.co.nz/news/national/541127/i-want-to-be-as-naked-as-legally-possible-the-many-looks-of-laneway-2025
Opshopping is briliant for those that have the time & inclination. I can't remember the last time I bought anything except socks / underwear brand new, but I have an amazingly high-quality wardrobe. inc. Italian merino suits, plenty of linen shirts etc. Of course I could dress in brand-new polyester from K-Mart and look like proper trash. The Laneway 'fashion' is pretty much buy, wear once, then dump- much like the 'Kiwiburn' look of their forty-something parents' generation- don't read too much into it.
The kids these days are doing things... not that much different to previous generations, experimenting with what they think is cool & what not. It's cool to see them having fun but does highlight the fact that it was a slow news day for RNZ.
New Zealand Energy started to lose me at "nuclear is unfortunately a bridge too far for New Zealand’s political class"...as if there are no other "too-far" bridges (seismic, vulcanological, astronomical cost, most NZers don't want a bar of it). Is there some plugNplay SMR now available on Temu that I don't know about?
And the glaring absence of pumped hydro storage in the potential solutions, either hours/days scale or months/dry year scale.
By all means re-direct our dwindling domestic natural gas into keeping the lights on when it counts - much better end use for NZ than Think Big-era methanol. Or urea.
This one is really interesting/depressing/alarming
“For the first time residential electricity demand is exceeding industrial demand. This is a clear signal of deindustrialisation.”
Particularly since residential demand would have been decreasing due to the increase in solar I assume, and there has not been a massive growth is residential housing over the last years
Doesn't help that a chunk of government revenue comes from the dividends of these power companies either.
Don't underestimate the effects of rooftop solar uptake which is increasingly popular and will become even more so as retail electricity prices rise in the coming months and years.
In our own case our rural lifestyle property has a total annual electricity spend of around $300. This is despite charging 2 EVs and assorted battery garden tools, pumped water supply, 2x 700L chest freezers and the usual range of household appliances. The shortfall economically relates to lines charges as our total generation equals our total consumption in energy terms.
Also the incoming changes to AS/NZS 4777.1:2024 electricity regulations will also expedite V2G connectivity which together with falling battery prices will serve to further incentivise energy self sufficiency for those with rooftop solar.
Yeah… since installing solar +batteries last August we cut off over 50% from the bills… and with cheaper batteries and panels coming from China (tariff free) there would be more uptake for sure
Our nation has come to the tipping point of 200 odd years of systemic financial failure.
The bottom line is that the foreign privately owned, Primary Bond Dealer Investment Banks, that underwrite our nation's money supply as debt owed to them securitised by our forecast spare economic capacity have been cooking the books for fraudulent profits that has sucked the economic lifeblood out of us.
The external debt liabilities they have created now stand at 5x the present economic capacity of the nation and I for one do not believe for a minute we have the spare capacity to ever clear that amount of debt they have written us.
Especially given that 65% odd of that debt has been written (Literally how they do it) then pumped into residential housing which is a nonproductive sector which has become nothing but a wealth transferring debt throughput scam from the productive economy, hidden by the fact that house and land prices are not accurately measured in the measure of inflation used for monetary policy adjustment.
No amount of tax redistribution, selling stuff or anything that gives stuff to foreigners wanting more than they give can redress this toxic money as debt predistribution imbalance.
Only legally questioning the integrity of the level of foreign debt being held to our head like a gun and getting relief from that of it that is illegally odious can ever apply a defibrillator to the failing heart of our economy, as Iceland did when the private banks had done the same to it.
IMHO
The chart and ‘analysis’ from NZ Energy is more likely to show correlation rather than causation, and if there is causation I would suggest the recession is reducing industrial energy demand. Growth forever - excellent piece by Mike Joy in Newsroom today
https://newsroom.co.nz/2025/02/07/leaders-pushing-gdp-growth-mantra-risking-charge-of-ecocide/
Yes, excellent piece - thanks for pointing it out Keith!
Of particular note, the comment left by Dr Earl Bardsley
"If a data centre wants to set up here, the response always seems to be “how do we ensure sufficient electricity to meet their needs?”. A better question might be related to why we should impose further on our natural environment in order to provide the green electricity sought by data centres. Is the economic gain worth the incremental environmental loss?"
Thanks for the link—Mike Joy’s warning is hard to ignore, backed by solid research and some pretty compelling evidence. He makes a strong case against Luxon’s "GDP growth at any cost" approach, but where’s the plan for a real transition? How do we make sustainability an obvious win—something that boosts economic security, improves wellbeing, and restores the environment in ways people can see and feel in their daily lives? The real challenge now is shaping a transition agenda and policy no one can ignore or argue against.
I read last week (The Post I think) that the NZ Initiative is busy whispering in Willis' ear that the way to pay for her corporate tax cut is to - you guessed it - raise our already punishingly high GST! A way to grow inequality not productivity....
Haha. I said before the election that they'd pull the GST lever. 20% here we come!
Surely that would be political suicide? I know they think they are God's gift to NZ but do you really think they'd risk the next election on this?
But Labour made them do it 🤡
Taxing consumption appears to be the new method of punching down at the poor. The orange dickhead in Washington is doing the exact same thing with tariffs....
You scare me. GST lowering to 10% would be a huge incentive to all. Easy to calculate & a fairer take by government from those who have to spend all income to stay afloat. GST is NOT a level.playing field.
I am not an economist (I have that in common with our Finance Minister) but my gauge of how badly things are going is the number of cars, boats and caravans for sale on the side of the road.
I have never before seen as many as I'm seeing now.
Even the most ideologically-myopic politician can surely see that raising GST in such a scenario is a one-way ticket to political oblivion.
I've heard this before and think it probably is a better indicator of what is currently going on than most reports would give you. I remember too back in mid - late 2020, the number of brand new cars and toys popping up on every street in every driveway was noticeable!
Thanks Bernard.
Apologies for long rant.
In terms of 'other' options - I'm not convinced there will be significant fiscal loosening in Budget 2025 via govt spending, noting the objective is political rather than economic. For political gain, my bet would be for the "true to form" from this Government will be TAX CUTS (individual) - they are also quick (for a short-term bang), and will serve their purpose of putting more in pockets for 'hard-working Kiwi taxpayers', and their goal of reducing the size of government. It will look like a fiscal loosening, but it will be for political not economic reasons. And, will be detrimental for long term prosperity - but will make some of us feel good.
You posit investment capital as a driver to provide the 'juice' - I'd be pointing to workforce availability as a noticeable short-term constraint. Yes, that may sound counter-intuitive given unemployment numbers, but to get government services back up requires health and education professionals that are not readily available. Or, we go the construction route, but that workforce is also not 'on tap' - as many have disappeared.
I know different perspective, but would prefer a much longer-term (dare I say sustainable) plan of investment in infrastructure and people for the future rather than more short-term 'juice'. In interim want serious 'supports' around disconnected and disaffected communities - not just more and more sanctions.
Thanks again,
Kia kaha.
Ganesh.
Short term is as far as they can see. Quite correct about political decision making rather than economic
No rant is too long with this government; It is hard to be succinct when discussing the ways they are failing us as a nation. They are embarrassingly outdated and out of step with where other leaders and other nations - who have a better understanding of the changes in geopolitical, macroeconomic, and meteorological winds, are heading. Going around hoping the RBNZ fairy and foreign sugar daddies are going to resuscitate this economy is laughable.
I've been reading and listening to Russell Napier's talks lately, and he lays out the evidence for a shift towards national capitalism. In short, in-shoring is the way the tide is heading, and national savings accounts (e.g. KiwiSaver) will be the resource. The anarchy of Trump 2.0 is going to add to this jolt, as leaders realise the US can no longer be relied upon. Many nations' pension funds are largely spent blindly buying up US stocks - instead, they can be directed to purchase government bonds at interest rates the government controls to fund local investments in infrastructure and defense. Interestingly, Napier notes that this allows for a period of 'managed' inflation slightly higher than we're used to to inflate away existing debts. Workers will win, savers will lose.
Ignoring this trend won't save us from higher inflation, we'll be at the mercy of off-shore energy prices, tariffs, supply chain disruptions, tearing up of FTAs, extreme weather events. 2022/23 should have been a wake up call for us. No party here is proposing any path forward that protects us from what was and will be the sources of inflation going forward. Too many are still blaming government spending!
"Embarrassingly outdated" - I'll say. I feel like I'm watching an episode of mad men every time they speak. Compared to what some other countries are doing and embracing the future ours seem to be pining for the days of old
Thanks Ganesh.
The polling is bad and I think they’ll see it’s their only way out. Assuming rational self interest…although ideology may get in the way.
Cheers
What role will an enacted RSB have in all this? Do you think the govt is looking to extreme deregulation to help them out of the hole they’ve dug/ part of a strategy for corporatisation of govt - would it attract foreign investment if they could do whatever with limited controls& consequences, favourable tax terms etc?
RSB will be (somehow) circumvented if it stands in way of foreign investment, deregulation, corporatisation etc. Only control on above will be political - in current environment that means NZFirst😢@#$!?
Who knew? Turns out Luxon and Willis are big fans of strategies that will expedite and accelerate New Zealand’s exit from first-world membership. Perhaps Willis didn’t want to pay the subscription fee? 🤔
I don't want the government to invest, I don't want them to win next election - next time round it will be sell baby, sell.
The government’s infrastructure priorities are vital. The insane amount of money to build the RoNS isn’t going to shock the economy back into life. They have a negative economic benefit. They represent an investment in poor urban planning and housing strategy. Enabling property development in remote places. Infrastructure is schools, hospitals and hitching NZ to the global digital economy
5. Willis has begun in recent days floating the prospects for a corporate tax CUT as a way to juice economic growth, but past experience shows it hasn’t increased investment from either local or foreign investors, and would also place an extra drag on Government revenues at a time it says it wants to tighten policy.
Squeezing lemon juice onto a paper cut.
Thanks Bernard. You accurately portray the state of the housing market. But isn't this what we all wanted? No sarc there. Prices get too high, there is no painless way to bring them down.
You're right, of course: Lots of people did claim to want house prices to drop, but that was just the impulsive reaction. No one actually wants house prices to drop (including potential buyers hoping this "thing" will set them up for retirement). What thoughtful people really want is for them to become more affordable to all - that is, our wages to rise, and our everyday costs to fall so we have more to put into housing. The government increasing wage competition (unemployment), and increasing costs (privitisation, cut-backs etc) are clearly the opposite of this, but it all lines up with their actual desire, which is to make housing a good investment (for their wealthy friends).
The fact is if house owners (living in this house) want to sell & purchase elsewhere it is the same market.
The inflated values have dropped & so sellers need to get real & move on.
Have personally faced this option, turned my brain on & realised facts.
Result self in home I love, first time buyer in home I did love. Be great to have 2022 price when sold but unrealistic. Would the inflated figure in my pocket make me happier,no. Happy is having a choice.
The shameless hypocrisy of this government - I followed the link to The Press article re the housing crisis and older folk, In the article the CMM state they would like to build more but funding has been withdrawn, yet the article concludes with a Bishop and the local Gnat MP taking credit as they hand over the keys to the new tenant. That sort of crap makes me very angry.
"Oh dear, I have fallen and broken a leg! Give me a brick, quick, so I can break the other one - that'll fix things!"
This exposes how financially, logically, business-illy illiterate this govt is. They simply have no clue what they're doing, no vision, no fresh ideas (as a matter of fact, the ideas that work aren't fresh either!). Nothing. Empty vessels.
Wikipedia should put all of their photos under the meritocracy myth definition.
My teenage grand daughter was telling me of her current shopping predilections recently, how she goes mainly goes to op shops or one of several online secondhand clothing outlets, refusing to buy new. The details seemed idiosyncratic at the time until I read the attachment below on RNZ this morning. I wonder now is this a rationale young people tell themselves in days when unemployment is high and part time work, especially for students is next to impossible to find? Or is it oligarchy dependent media outlets like RNZ spinning a narrative to legitimate young people having to survive on meagre means? Or, dialectically speaking both? They merits of recycling aside, is impecuniousness now fashionable?
'I want to be as naked as legally possible' - The many looks of Laneway 2025https://www.rnz.co.nz/news/national/541127/i-want-to-be-as-naked-as-legally-possible-the-many-looks-of-laneway-2025
Opshopping is briliant for those that have the time & inclination. I can't remember the last time I bought anything except socks / underwear brand new, but I have an amazingly high-quality wardrobe. inc. Italian merino suits, plenty of linen shirts etc. Of course I could dress in brand-new polyester from K-Mart and look like proper trash. The Laneway 'fashion' is pretty much buy, wear once, then dump- much like the 'Kiwiburn' look of their forty-something parents' generation- don't read too much into it.
The kids these days are doing things... not that much different to previous generations, experimenting with what they think is cool & what not. It's cool to see them having fun but does highlight the fact that it was a slow news day for RNZ.
Ps. Hope they used sunscreen. 🙏
Hi B. “energy blindness” is important
https://youtu.be/lrMWSkzrMYg?si=1SNhp_-LstfBKngq
New Zealand Energy started to lose me at "nuclear is unfortunately a bridge too far for New Zealand’s political class"...as if there are no other "too-far" bridges (seismic, vulcanological, astronomical cost, most NZers don't want a bar of it). Is there some plugNplay SMR now available on Temu that I don't know about?
And the glaring absence of pumped hydro storage in the potential solutions, either hours/days scale or months/dry year scale.
By all means re-direct our dwindling domestic natural gas into keeping the lights on when it counts - much better end use for NZ than Think Big-era methanol. Or urea.