Just as a group of economists told the PM spending cuts are hurting the economy, Treasury warns recession is deepening and worsening the Budget deficit; Split opens in coalition over Medical school
He certainly has the ability to take someone apart when he wants to. I always assume however that he does this strategically, so there's someone else he's boosting by attacking Luxon. I'm not quite enough of a political drama tragic to know who exactly though I have suspicions.
Since Hooton reputedly once declared he didn't like driving in NZ because the rules required him to stay on the left, he is unlikely to attract the dismissive "servant of TPM, Labour, Greens" comment that's been flying around from our leaders lately.
And yes, as Oliver hints in this thread, he's likely to have been let loose as a surrogate attack dog by the movers and shakers in the shadows.
Keep the course and speed. We are doing well. Don’t listen to the critics. They come from the left… the centre… and the right…. It doesn’t matter. I know better than everyone else! I’m sure that before Luxon, one of those who thought the same was the captain of the Titanic
Would be interesting to read some old articles from around this time in 2018 about how Jacinda Ardern was tracking as PM. Certainly there’d be some right wing commentators getting stuck in but I don’t recall there was a lot of objective criticism from the left as there is from the right toward Luxon at present.
Pretty sure there's a LabNat concensus that the economy needs to shrink, and I'm pretty sure I know why- balance of trade has been on the downhill slide since 1988 and (according to the wiseacres at the RB probably) there needs to be 'demand destruction' for imported goods. of course import substitution or impediments to consumer imports would also work, but the trend seems to be opposite with papermills etc. closing at the moment.
I know Bishop was trying to be funny last night on the news when he said that Willis was more likely to take advice from a penguin than experts in the field, but I think he inadvertently summed up this governments whole approach to policy making perfectly.
My comment to Hooton’s article in the NZ Herald is as follows, “This is what happens when fast moving consumer goods (FMCG) dogma collides with a political system populated with too many career politicians. Many, including the PM, as Hooton accurately points out, are ill-equipped to grapple with the failure of Neo-liberalism, which is to say the least, complex.” It is sad to see New Zealand so bogged down in ideological tit-for-tat when 2025 will record the world’s climate breaking through 1.5 degrees of warming. It feels like the inability to genuinely collaborate is the human race’s Achilles heel? Even here in tiny, should-be-able-to-work-together New Zealand. That said, reading the comments below Hooton’s article was not only revealing, but insightful. Luxon, like Trump, is merely an overt symptom of a broken system and the last thing NZ needs is a soap salesman (with a smoke and mirrors CV) out of his depth. Something needs to change, and bloody quickly.
I so agree. What I can't see though is what we are trying to head for as in is it some other economy that has a name? So not neoliberalism but ?? Common sense? Donut economics is sane.
My wife’s heritage is Danish. I’m not sure if happiness is innate in Danes or whether it is part of the Viking DNA. She was born happy and is completely chilled all of the time. Yes, clearly, opposites attract. For this reason I’m an observer of Nordic culture. Whilst they all have their differences and none are perfect, their cultures are more aligned around consensus. Particularly where politics is concerned. That tends to foster collaboration and cooperation. Compared to us their citizens are also prepared to pay more tax (fund their government) because they know they will receive world class health, education, and social services in return. This dramatically reduces inequality. That calms the farm and allows the country to breathe. Good for innovation and productivity and well-being. Hello happiness. It has been said that Nordics sit in the middle-ground between socialism and capitalism, which I would argue is the sweet spot. At the very least it is a great platform to build on. I think New Zealand has been caught out and marooned/imprisoned on Neo-liberalism island by its concentrated power loving elites.
Once upon a time New Zealand was more Nordic. In fact, once upon a time New Zealand was a progressive socialist leader. Along the way it lost its key British market and the wheels fell off. Along came Roger Douglas and voila, here we are. A country divided. A country going backwards. A country that elected a corporate careerist PM who struggles to keep promises and is economical with the truth. A PM who promotes growth with his left hand while implementing austerity with his right hand. A PM who says one thing and does another. I really believe for New Zealand to be its best it has to find a way to emulate the Scandinavians. Denmark even has a similar population (5.947 million) to New Zealand. The current Neo-liberalism system fathered by Douglas is an abject failure. Pick your preferred measure: productivity, poverty, housing, health, energy, education or low wages. They have all gone backwards. New Zealand has all of the raw ingredients to be a fantastic place to live…but….right now, it isn’t. Its native born are packing their bags and leaving on a jet plane, many never coming back again. Ask yourself why? And then why? And keep asking why until you arrive in Copenhagen. Interesting reading here from Aarhus University in Denmark. 🇩🇰 https://nordics.info/themes/the-nordic-model
Yes I recognise what you are saying. I have Schleswig, Swedish and Sth coast Baltic ~ and English. I’m old enough to have experienced and understand what happened to us in the 80’s. Where I’m bewildered is that we seem to have no one capable/knowledgeable to get us out of it.
I admire the Scandinavian way but they may be helped by long ancestry and until recently no difficult immigration relationships.
We seem to trapped in the corporate ways of the US. I don’t imagine Scandinavia is as screw by them.
You know I’d never thought to check the UV levels. I live on Otago Peninsula and usually enjoy the southerlies but thanks for mentioning UV. I’ll check that out in future
Wellington Airport must surely be dreaming about all those long haul flights that will come. Here in Christchurch, with a higher population, an Airport that can operate 24/7 with no runway issues and we still don't have all those connections. Doesn't seem to stack up.
It's not just that Luxon is a mediocre manager, intellect, and politician, it's that National is currently a mediocre and valueless party (Willis being the best Finance minister a "pro-business/economic realist" party could produce is laughably grim). Besides tax cuts for landlords and lower interest rates for property 'investors', what else is their vision for Aotearoa? This has left a void in their coalition to be completely railroaded by ACT's (and to a lesser extent NZFirst's) unpopular, niche, agendas.
Luxon is completely lost if he doesn't see Seymour and ACT as the biggest threats to his government. Seymour has NOTHING to lose from breaking the coalition early if National refuse to support the Te Tiriti referendum further, and he knows it. Who is naive enough to think Seymour would happily accept an agreement to not advance one of his primary objectives? You really think he's just gonna shrug and say "Well, at least we got to have a debate!"
ACT are well-funded and ready to run on an election solely focused on this issue. TPM, Greens, and Labour will be too. National will not, especially under Luxon, because they can't strike a middle ground on this. ACT's voters (and parts of National's) care strongly about this issue and ACT will not lose their portion of the electorate. National won't be able to form a coalition without them. The message to middle NZ is simple then - if you are sick of this issue and want to go back to normal, you cannot vote National. They will be badly damaged by a snap election.
Having ruled out making it a conscience vote, Luxon can order his caucus to vote for the referendum if he credibly thinks Seymour will walk if it's rejected. He's either being short-sighted and rejected the idea because it came from Swarbrick (not unlikely), or he's preparing for this situation.
Thanks Bernard, was an interesting morning of opinions! The below comment on the Housing note caught my eye.
"The Government has also appointed an independent chair and advisory group to provide advice on making earthquake building settings "fairer" and "more sensible"
How come we need independent advice on this? Why can't the government department responsible provide the advice? Once again it feels like what we were seeing with the previous government is repeating. Can't make a decision about anything (or choose to not make any decisions or deliver anything), so have to seek consultants (at huge cost) to tell them what to do and further delay any progress.
Re: Willis's refusal to take advice from economists.
Labour has nothing better to offer on the economic front than National. A month ago I watched this fiasco- 30 with Guyon Espiner feat. Labour finance spokesperson Barbara Edmonds. https://www.youtube.com/watch?v=wsOp4PJ9Fk0&t=13s
Looking past Espiner's intro gushing about Edmonds' "genuine financial expertise" (she is a tax lawyer, that's a 'legal expertise', not a financial or economic one) we see that what Labour is offering is 'get the economy into surplus, only a bit more slowly than National wants to'. What this means in practice is 'crash the economy a bit more slowly than National will'. The first part of the comments section elucidates this in an exchange with what appears to be a Labour Party shill.
Admittedly, Edmonds ticks a lot of boxes in the 'electability' stakes- a brown woman who was raised by dad in a motherless family of four kids. Indeed, the 'shill' writes "all I see is a humble educated woman". However this is pure objectification. The programme she elucidates is the current Labour tactic of smooching up imperceptibly close to that of National- same as Labour's housing affordability policy of 'maintaining house prices while wages catch-up', which is if anything less progressive than Bishop's 'prices must come down'- though I take Bishop's position as making a policy point of the inevitable consequence of a deliberately induced recession.
I work for an Australian organisation and am paid in Aussie dollars. The last few months the exchange rate has been very beneficial for me, but today it cracked $1.11 for every $1. Is this a reflection of the poorly performing NZ economy or something else?
There are good deficits which support the economy and serve the public purpose. There are bad deficits, which are the result of a failing economy, when you have not budgeted for good deficits. The word "worse" should never be used for any particular fiscal outcome, taken out of context of the state of the economy. MMT, lesson one.
Deferred maintenance is a time bomb, have WCC learned nothing from the sewer and water situation. I can’t believe this countries leaders are of such poor quality or maybe it’s a world wide issue as lobbyists and donors rule the roost
This country is run by vested interests, and I’ve never seen such a shamefully corrupt government in my lifetime. It’s shocking really. It’s unbelievable to think restoring tax deductions for landlords was prioritised at all. Where is the ROI? A lady at my work said reinstating interest deductibility will mean she makes no profit on rental income and pays no tax (with interest rates being so high right now). It is saving her well over $14k a year. Meanwhile, they’re so hard up for cash they’re removing Milo from break rooms in hospitals. Rents are coming down because the usual tactic to flood the country with migrants to undermine worker bargaining power isn’t an option when the migrants know there are no jobs to relocate for. I suspect we are heading into a zero growth scenario, which means aggregate demand can’t be used to make the gdp headline figures look better. I shudder to think what GDP per capita will look like.
Don't much like Hooton's politics, but boy has he got Luxon bang to rights...
Yeah Hooton wields the pen like a sword in that article! Yeesh
He certainly has the ability to take someone apart when he wants to. I always assume however that he does this strategically, so there's someone else he's boosting by attacking Luxon. I'm not quite enough of a political drama tragic to know who exactly though I have suspicions.
Oh please do tell! I see no-one in the camp of any talent whatsoever!
Since Hooton reputedly once declared he didn't like driving in NZ because the rules required him to stay on the left, he is unlikely to attract the dismissive "servant of TPM, Labour, Greens" comment that's been flying around from our leaders lately.
And yes, as Oliver hints in this thread, he's likely to have been let loose as a surrogate attack dog by the movers and shakers in the shadows.
Great Kaka as usual, but please no more photos of Seymour, it put me off my breakfast!
good one
Keep the course and speed. We are doing well. Don’t listen to the critics. They come from the left… the centre… and the right…. It doesn’t matter. I know better than everyone else! I’m sure that before Luxon, one of those who thought the same was the captain of the Titanic
Would be interesting to read some old articles from around this time in 2018 about how Jacinda Ardern was tracking as PM. Certainly there’d be some right wing commentators getting stuck in but I don’t recall there was a lot of objective criticism from the left as there is from the right toward Luxon at present.
Let them feast, I say.
Seems you cant austerity your way out of a recession, but we already knew that...
I do enjoy a Darth Hooton force strangling of Luxon
Pretty sure there's a LabNat concensus that the economy needs to shrink, and I'm pretty sure I know why- balance of trade has been on the downhill slide since 1988 and (according to the wiseacres at the RB probably) there needs to be 'demand destruction' for imported goods. of course import substitution or impediments to consumer imports would also work, but the trend seems to be opposite with papermills etc. closing at the moment.
I know Bishop was trying to be funny last night on the news when he said that Willis was more likely to take advice from a penguin than experts in the field, but I think he inadvertently summed up this governments whole approach to policy making perfectly.
The penguins would do better.
Certainly the Madagascar cartoon ones would
I don't know if it is the origin of this saying, but never thought this line might be appropriate for a Minister of Finance!
"Look at her, she's as nervous as a very small nun at a penguin shoot"
Philip Glenister as DCI Gene Hunt - Life on Mars
My comment to Hooton’s article in the NZ Herald is as follows, “This is what happens when fast moving consumer goods (FMCG) dogma collides with a political system populated with too many career politicians. Many, including the PM, as Hooton accurately points out, are ill-equipped to grapple with the failure of Neo-liberalism, which is to say the least, complex.” It is sad to see New Zealand so bogged down in ideological tit-for-tat when 2025 will record the world’s climate breaking through 1.5 degrees of warming. It feels like the inability to genuinely collaborate is the human race’s Achilles heel? Even here in tiny, should-be-able-to-work-together New Zealand. That said, reading the comments below Hooton’s article was not only revealing, but insightful. Luxon, like Trump, is merely an overt symptom of a broken system and the last thing NZ needs is a soap salesman (with a smoke and mirrors CV) out of his depth. Something needs to change, and bloody quickly.
I so agree. What I can't see though is what we are trying to head for as in is it some other economy that has a name? So not neoliberalism but ?? Common sense? Donut economics is sane.
My wife’s heritage is Danish. I’m not sure if happiness is innate in Danes or whether it is part of the Viking DNA. She was born happy and is completely chilled all of the time. Yes, clearly, opposites attract. For this reason I’m an observer of Nordic culture. Whilst they all have their differences and none are perfect, their cultures are more aligned around consensus. Particularly where politics is concerned. That tends to foster collaboration and cooperation. Compared to us their citizens are also prepared to pay more tax (fund their government) because they know they will receive world class health, education, and social services in return. This dramatically reduces inequality. That calms the farm and allows the country to breathe. Good for innovation and productivity and well-being. Hello happiness. It has been said that Nordics sit in the middle-ground between socialism and capitalism, which I would argue is the sweet spot. At the very least it is a great platform to build on. I think New Zealand has been caught out and marooned/imprisoned on Neo-liberalism island by its concentrated power loving elites.
Once upon a time New Zealand was more Nordic. In fact, once upon a time New Zealand was a progressive socialist leader. Along the way it lost its key British market and the wheels fell off. Along came Roger Douglas and voila, here we are. A country divided. A country going backwards. A country that elected a corporate careerist PM who struggles to keep promises and is economical with the truth. A PM who promotes growth with his left hand while implementing austerity with his right hand. A PM who says one thing and does another. I really believe for New Zealand to be its best it has to find a way to emulate the Scandinavians. Denmark even has a similar population (5.947 million) to New Zealand. The current Neo-liberalism system fathered by Douglas is an abject failure. Pick your preferred measure: productivity, poverty, housing, health, energy, education or low wages. They have all gone backwards. New Zealand has all of the raw ingredients to be a fantastic place to live…but….right now, it isn’t. Its native born are packing their bags and leaving on a jet plane, many never coming back again. Ask yourself why? And then why? And keep asking why until you arrive in Copenhagen. Interesting reading here from Aarhus University in Denmark. 🇩🇰 https://nordics.info/themes/the-nordic-model
Yes I recognise what you are saying. I have Schleswig, Swedish and Sth coast Baltic ~ and English. I’m old enough to have experienced and understand what happened to us in the 80’s. Where I’m bewildered is that we seem to have no one capable/knowledgeable to get us out of it.
I admire the Scandinavian way but they may be helped by long ancestry and until recently no difficult immigration relationships.
We seem to trapped in the corporate ways of the US. I don’t imagine Scandinavia is as screw by them.
Is it just me or is the bite of the wind this morning in Auckland really unseasonal?
great for the lungs
Yes but the southerly that brought the cold wind brought high UV levels this afternoon - it was really bright. Good time to venture out now.
You know I’d never thought to check the UV levels. I live on Otago Peninsula and usually enjoy the southerlies but thanks for mentioning UV. I’ll check that out in future
I'm a bit sensitive to UV due to some medication I take - so I notice when it's extra-bright.
Wellington Airport must surely be dreaming about all those long haul flights that will come. Here in Christchurch, with a higher population, an Airport that can operate 24/7 with no runway issues and we still don't have all those connections. Doesn't seem to stack up.
It's not just that Luxon is a mediocre manager, intellect, and politician, it's that National is currently a mediocre and valueless party (Willis being the best Finance minister a "pro-business/economic realist" party could produce is laughably grim). Besides tax cuts for landlords and lower interest rates for property 'investors', what else is their vision for Aotearoa? This has left a void in their coalition to be completely railroaded by ACT's (and to a lesser extent NZFirst's) unpopular, niche, agendas.
Luxon is completely lost if he doesn't see Seymour and ACT as the biggest threats to his government. Seymour has NOTHING to lose from breaking the coalition early if National refuse to support the Te Tiriti referendum further, and he knows it. Who is naive enough to think Seymour would happily accept an agreement to not advance one of his primary objectives? You really think he's just gonna shrug and say "Well, at least we got to have a debate!"
ACT are well-funded and ready to run on an election solely focused on this issue. TPM, Greens, and Labour will be too. National will not, especially under Luxon, because they can't strike a middle ground on this. ACT's voters (and parts of National's) care strongly about this issue and ACT will not lose their portion of the electorate. National won't be able to form a coalition without them. The message to middle NZ is simple then - if you are sick of this issue and want to go back to normal, you cannot vote National. They will be badly damaged by a snap election.
Having ruled out making it a conscience vote, Luxon can order his caucus to vote for the referendum if he credibly thinks Seymour will walk if it's rejected. He's either being short-sighted and rejected the idea because it came from Swarbrick (not unlikely), or he's preparing for this situation.
conscience
thanks
Thanks Bernard, was an interesting morning of opinions! The below comment on the Housing note caught my eye.
"The Government has also appointed an independent chair and advisory group to provide advice on making earthquake building settings "fairer" and "more sensible"
How come we need independent advice on this? Why can't the government department responsible provide the advice? Once again it feels like what we were seeing with the previous government is repeating. Can't make a decision about anything (or choose to not make any decisions or deliver anything), so have to seek consultants (at huge cost) to tell them what to do and further delay any progress.
Let's be honest Kaka Whanau...we saw all of this coming.
Re: Willis's refusal to take advice from economists.
Labour has nothing better to offer on the economic front than National. A month ago I watched this fiasco- 30 with Guyon Espiner feat. Labour finance spokesperson Barbara Edmonds. https://www.youtube.com/watch?v=wsOp4PJ9Fk0&t=13s
Looking past Espiner's intro gushing about Edmonds' "genuine financial expertise" (she is a tax lawyer, that's a 'legal expertise', not a financial or economic one) we see that what Labour is offering is 'get the economy into surplus, only a bit more slowly than National wants to'. What this means in practice is 'crash the economy a bit more slowly than National will'. The first part of the comments section elucidates this in an exchange with what appears to be a Labour Party shill.
Admittedly, Edmonds ticks a lot of boxes in the 'electability' stakes- a brown woman who was raised by dad in a motherless family of four kids. Indeed, the 'shill' writes "all I see is a humble educated woman". However this is pure objectification. The programme she elucidates is the current Labour tactic of smooching up imperceptibly close to that of National- same as Labour's housing affordability policy of 'maintaining house prices while wages catch-up', which is if anything less progressive than Bishop's 'prices must come down'- though I take Bishop's position as making a policy point of the inevitable consequence of a deliberately induced recession.
I work for an Australian organisation and am paid in Aussie dollars. The last few months the exchange rate has been very beneficial for me, but today it cracked $1.11 for every $1. Is this a reflection of the poorly performing NZ economy or something else?
There are good deficits which support the economy and serve the public purpose. There are bad deficits, which are the result of a failing economy, when you have not budgeted for good deficits. The word "worse" should never be used for any particular fiscal outcome, taken out of context of the state of the economy. MMT, lesson one.
Deferred maintenance is a time bomb, have WCC learned nothing from the sewer and water situation. I can’t believe this countries leaders are of such poor quality or maybe it’s a world wide issue as lobbyists and donors rule the roost
This country is run by vested interests, and I’ve never seen such a shamefully corrupt government in my lifetime. It’s shocking really. It’s unbelievable to think restoring tax deductions for landlords was prioritised at all. Where is the ROI? A lady at my work said reinstating interest deductibility will mean she makes no profit on rental income and pays no tax (with interest rates being so high right now). It is saving her well over $14k a year. Meanwhile, they’re so hard up for cash they’re removing Milo from break rooms in hospitals. Rents are coming down because the usual tactic to flood the country with migrants to undermine worker bargaining power isn’t an option when the migrants know there are no jobs to relocate for. I suspect we are heading into a zero growth scenario, which means aggregate demand can’t be used to make the gdp headline figures look better. I shudder to think what GDP per capita will look like.