Recession & local protests drag National below Labour

The Salvation Army’s State of the Nation report shows worsening food poverty and housing shortages mean more than 400,000 people now need welfare support, the highest level since the 1990s. Photo: Lynn Grieveson / The Kākā

Long stories short, the top six things in our political economy around housing, climate and poverty in the week to Sunday, February 16 were:

1. Leading and lagging indicators showed the economy is struggling to get out of its three-year-long recession in per-capita terms, with some green shoots in manufacturing and trucking being over-shadowed by another fall in retail spending and confirmation of the loss of over 200 jobs at Kinleith.

2. Poll results published over the last week showed support for the Government’s coalition of parties falling behind the Opposition in early February for the first time since the 2023 election as the lengthening shadows of the recession, high interest rates and still-high domestic inflation compound the pain of ever-tightening budgets in health, housing, transport, education and welfare;

3. In a week of political distractions, misdirections and grandstanding, PM Christopher Luxon and soon-to-be Deputy PM David Seymour accused each other in public of being ill-advised over Seymour’s writing of a letter to Police in support of constituent Philip Polkinghorne. Meanwhile, Finance Minister Nicola Willis was picked out by Labour as a potential challenger to Luxon. She then announced the Government would help an as-yet-to-be identified third entrant to challenge the supermarket duopoly of Foodstuffs and Woolworths, Luxon criticised banks for restricting lending to service stations.

4. More local protests against hospital staffing shortages and higher speed limits sprung up in Whakātane¹, Palmerston North² and Nelson³, adding to the political pressure on National in its heartland provincial seats.

5. The Government expanded its ‘going for GDP growth’ policies by loosening rules and lowering thresholds for foreign direct investment, but immigration lawyers and estate agents said it was unlikely to ramp up investment, migration or jobs much because most of the money will simply be lent to the Government in bonds, and migrants still can’t buy their own homes.

6. The Salvation Army released its annual State of the Nation report showing worsening food poverty and housing shortages meant more than 400,000 people now needed welfare support, the highest level since the 1990s, yet Aotearoa’s major annual economics conference did not discuss housing shortages, rising poverty or taxing capital gains, instead focusing on the state doing more with less and public debt reduction.

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The Kākā’s Journal of Record for the week to February 16

Politics and the economy

• Polls from 1News-Verian, Curia-Taxpayers Union and Talbot Mills⁴ showed support for the Opposition parties in Parliament overtaking support for the governing coalition parties for the first time since the election, while right track-wrong track measures showed the highest proportion of voters since 2023 thought the country was going in the wrong direction.

• Ready-mixed concrete production fell 7.7% in calendar 2024 from 2023 to a five-year low that is 10% below 2019 levels, Stats NZ reported.

• Retail spending via electronic cards fell 1.6% in seasonally adjusted terms in January from December, Stats NZ reported.

• Food prices rose 1.9% in January from December and were up 2.3% from a year ago, while the stock measure of rents rose 0.1% for the month and was up 3.6% from a year ago, Stats NZ reported.

• Manufacturing sector output expanded in January for the first time in 23 months, the BusinessNZ-BNZ Performance of Manufacturing Industries (PMI) survey results for January showed.

• Heavy traffic movements rose 4.0% in January from December, while light traffic movements rose 1.0%, ANZ’s Truckometer series from NZTA data showed.

Housing, transport & infrastructure

• State housing tenants who refuse to work with Kāinga Ora to repay their rent debt now risk eviction under a new policy announced by Associate Housing Minister Tama Potaka. Potaka said Kāinga Ora is currently bringing rent debt down to "realistic" levels for tenants to fully repay.

• Overseas investors, business leaders, and construction companies will discuss infrastructure investment opportunities at a summit hosted by the Government as part of its first Quarterly Action Plan for 2025.

• Transport Minister Chris Bishop said Cabinet has confirmed Crown funding to NZTA to deliver upgrades to SH76 Brougham Street in Christchurch, including an overbridge expected to be complete within two years.

• Government acquisition of Māori land would require joint approval from the Minister for Land Information and the Minister of Māori Development under upcoming changes to the Public Works Act. Land Information Minister Chris Penk said the changes would also see compensation paid out to all separately owned dwellings on the land, rather than as a lump sum.

• CoreLogic's latest ‘Pain and Gain’ report found that 91% of properties were resold at a profit in Q4 2024, with $289,500 the median resale profit.

• Property listings in January were up 21.2% year-on-year and national stock levels were up 18.9% year-on-year, according to Realestate.co.nz's latest report. The national average asking price of $868,969 was down 1.3% year-on-year.

• Minister of Transport Chris Bishop announced that the Government would consult on extending the time between WoF inspections for vintage vehicles and private motorhomes from 6 months to one year.

Poverty, health, jobs, incomes, living costs & justice

• NZ First introduced a Member's Bill which would repeal Act mandating water fluoridation and instead require local authorities to hold referendums on whether water should be fluoridated.

• Workers who earn over $180,00 would be barred from pursuing unjustified dismissal claims under a new Bill announced by Workplace Relations and Safety Minister Brooke van Velden. The ban would apply only to new employment agreements in the first year after the Bill is passed, then extend to cover pre-existing agreements.

• Mental Health Minister Matt Doocey announced partial Government funding for a Mental Health Foundation initiative to digitise mental health resources and re-develop its digital platforms.

• The Government announced that survivors of torture at the Lake Alice Psychiatric Hospital can choose either an expedited redress payment of $150,000, or an individualised payment determined by former High Court judge Paul Davison.

• Victims advocate Ruth Money has been appointed NZ's Chief Victims Advisor, Justice Minister Paul Goldsmith announced.

Climate, water, land & sea

• Total greenhouse gas emissions fell 0.7% in the September 2024 quarter, Stats NZ reported, but industry and household emissions rose 0.5% year-on-year. The largest decrease was in manufacturing emissions, partly reflecting a fall in manufacturing activity over the period.

• Research led by James Hansen projected that global heating will reach 2 degree celsius by 2045 unless solar geoengineering is deployed. Hansen's study also predicted the potential shutdown of the AMOC current system within the next 20-30 years.

• The Fast-track Approvals regime opened for applications. The 149 projects listed on the Fast-track Approvals Act are now able to be evaluated by the expert panel.

• NZ's newly announced climate pledge under the Paris Agreement "falls short" of the commitments of other comparable countries, University of Waikato professor Nathan Cooper commented. Cooper also criticised the Goverment's decision to postpone the entry of agricultural emissions into the ETS.

• The Government appointed independent experts for an electricity market performance review. Global consultancy Frontier Economics will lead the review, which is set to deliver its final report by the end of June.

• The Environment Court granted Meridian Energy approval to build its Ruakākā Solar Farm in Tai Tokerau. Meridian will also build a 100MW battery energy storage system expected to be operational by April.

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The Kākā’s diary for the week to February 23 & beyond

Monday, February 17

PM Christopher Luxon expected to hold post-Cabinet news conference from 4pm.

Stats NZ scheduled to release international travel and migration data at 10.45 am.

RBNZ scheduled to publish its balance sheet and foreign exchange statistics, at 3pm.

Tuesday, February 18

Parliament scheduled to sit, starting with Question Time at 2 pm. Livestreamed on Parliament website.

Economy: Stats NZ scheduled to release births and deaths data, plus national population estimates, at 10.45 am.

Economy: RBNZ scheduled to publish household inflation expectations at 3pm.

Wednesday, February 19

Stats NZ scheduled to release business price indexes at 10.45 am.

Stats NZ scheduled to release vehicle registration data at 10.45 am.

Parliament scheduled to sit, starting with Question Time at 2 pm. Livestreamed on Parliament website.

RBNZ to publish Monetary Policy Statement and publish Official Cash Rate decision at 2pm.

RBNZ scheduled to release data on government bond, Kauri bond, and Treasury bill holdings at 3pm.

Thursday, February 20

Economy: Stats NZ scheduled to release child poverty stats at 10.45 am.

Economy: Stats NZ scheduled to release household income and housing cost stats at 10.45 am.

Parliament scheduled to sit, starting with Question Time at 2 pm. Livestreamed on Parliament website.

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Beyond next week

February 26 - Treasury Chief Economic Advisor Dominick Stephens gives a presentation on the state of the economy for 2025.

April 8 - The NZ Institute of Economic Research releases its Quarterly Survey of Business Opinion for the March quarter.

May 12 - 14 - The Environmental Defence Society holds an Ocean Symposium and its 2-day Annual Conference.

May 22 - Finance Minister Nicola Willis and Treasury to publish Budget 2025.

Please add suggested events in the comments for inclusion in next week’s edition.

Many thanks to

Eilish Grieveson

for writing, editing and compiling the Journal of Record and the diary.

Kā kite ano

Bernard

1. As reported by RNZ’s Rachel Helyer-Donaldson

2. As reported by RNZ’s Jimmy Ellingham

3. As reported by RNZ’s Samantha Gee

4. As reported by Stuff