TLDR & TLDL: In this weekend’s podcast above, I took a 'hoon' with Peter Bale around 'News Zealand Over The Horizon' to survey the week’s big news here and overseas. Summaries of the week’s news and my seven numbers of the week are below for all subscribers.
‘Sacre bleu mate’
Australia surprised everyone by doing a deal with Britain and the United States to arm itself with nuclear submarines (but not nuclear weapons). China declared it was cold war thinking that would destabilise the Asia Pacific. France said it felt betrayed by Australia, which dumped a plan to build A$90b worth of French conventional submarines to do with AUKUS deal. This morning France withdrew its ambassador from Washington.
PM Jacinda Ardern said Aotearoa-NZ was fine not having nuclear submarines, which are still illegal in our ports. China then tried to drive a wedge between us and our ANZUS partners by asking us for permission to join the CPTPP. Here’s my view on that in Friday’s Dawn Chorus.
FYI, from next Tuesday September 21, my week-day posts and podcasts will be for paying subscribers only. I’ll include a special introductory discount code for existing subscribers on Tuesday morning. These weekend summaries with the weekly ‘hoon’ will remain free for all subscribers, including those who have paid and those on the ‘free’ list.
Rampant house price inflation
REINZ reported annual house price index inflation of 31.1% in August, which included almost two weeks of lockdown. Agents said first home buyers and owner occupiers were scrambling to get the few properties listed, using their spare time and money to quench their fears of missing out on another post-Covid jump in prices.
Economists said, if anything, house price inflation had accelerated since May. In the last three months, inflation was running at an annualised rate of over 20%. The Government’s moves to stop landlords claiming interest for tax and the Reserve Bank’s promises to tighten LVR restrictions, to plan DTI restrictions and its forecasts of rate hikes have done little to cool the market. Home owners expect house prices to double every 10 years and are confident the Government and Reserve Bank would stop house price falls in future by again cutting interest rates and removing lending restrictions.
Here’s my views on why the housing market is in this state and what the Government is planning (or not planning) to do about it in Wednesday’s Dawn Chorus.
‘Find a way to end elimination’
The pressure grew this week on the Government to find a vaccination level and a set of border controls and level 1 restrictions that would allow Aotearoa-NZ to re-open its borders and avoid the sort of hard, wide and long lockdowns we’re just emerging from.
ACT leader David Seymour called on Monday for an end to the elimination strategy, while the Malaghan Institute’s Professor Graham Le Gros again challenged the sustainability of the strategy. On Friday, former Chief Science Adviser Peter Gluckman proposed the creation of a ‘red team’ of advises to help the Government ease the elimination strategy out and open up without wrecking the health system.
Ashley Bloomfield and Andrew Little helped somewhat by saying a vaccination rate above 90% would start to allow the reduction of restrictions. Auckland is set to drop from level four to level three on Tuesday night, but the rest of the country looks set to stay at Delta level two until Auckland drops from level three to level two. Ardern indicated the level two restrictions would be loosened a bit to allow indoor gatherings of 100, rather than 50. I wrote more about the elimination debate and where to from here in Tuesday’s Dawn Chorus.
A reminder: From next Tuesday September 21, my week-day posts and podcasts will be for paying subscribers only. I’ll include a special introductory discount code for existing subscribers on Tuesday morning. These weekend summaries with the weekly ‘hoon’ will be for ‘free’ subscribers.
Seven numbers for the last seven days
A$90b - The amount Australia was going to spend buying and building French conventional submarines. The French are not happy. PM Scott Morrison described the new AUKUS (NZ not included) as Australia’s “forever deal.”
90% - The vaccination rate threshold for over 12s named for the first time as one we need to reach to be able to safely open up. Our full vaccination rate yesterday was 32% and our one-dose rate was 62%. Over 7% of adults told the last official survey they definitely would not get the vaccine, and 87% said they definitely would. That leaves 6% who are currently hesitant.
56.1% - The rise in Palmerston North’s REINZ house price index in August from a year ago. Prices were up more than 40% in Wellington City. Nuff said.
100 people - The new level two limit expected for indoor gatherings in cafes, restaurants etc from Tuesday night. Jacinda Ardern indicated the rise from the current limit of 50 would be set after Monday’s cabinet meeting.
50 basis points - The expected rise in the Official Cash Rate by the Reserve Bank through hikes of 25 basis points in each of the October 6 and November 24 decisions. Bank economists strengthened their views that the OCR would rise from 0.25% to 0.75% by the end of the year after stronger-than-expected GDP growth. It rose 2.8% in the June quarter, blew away economists’ forecasts for growth of about 1.1% and the Reserve Bank’s own forecast in August for 0.7% growth.
4.3% above pre-Covid levels - Despite last year’s lockdown, GDP at the end of the June quarter was 4.3% above pre-Covid levels. GDP is seen falling 6-7% in the current lockdown-hit September quarter, before rebounding as much as 10% in the December quarter.
$10b - The economy’s buoyancy has helped bolster the Government’s finances with plenty of tax revenues, allowing Finance Minister Grant Robertson to announce this week he had put an extra $7b into the Covid Recovery Fund to top up $3b still left there. He said this wouldn’t require any more Government borrowing than already announced.
Have a great weekend.
Ka kite ano
Bernard
PS: And remember: From next Tuesday September 21, my week-day posts and podcasts will be for paying subscribers only. I’ll include a special introductory discount code for all existing subscribers on Tuesday morning for when I turn on the subscription system.
These weekend summaries with the weekly ‘hoon’ will continue to be for ‘free’ subscribers.
I’d love to sign up as many paid subscribers as possible to make this work financially sustainable for my family. I love doing it and hope you find it useful and enjoy being part of this community on The Kākā. Only paying subscribers will be able to comment and participate in the weekly ‘hoons’ from next Tuesday. Come and join us.
I welcome your thoughts in the comments below, which are still open for all ‘free’ subscribers until Tuesday.
The week that was for the week's end