Tuesday's Chorus: Finally, new mortgage debt is about to heat up the 'bits tacked on'

New bank lending data shows new lending is about to start adding heat to the economy, rather than subtracting from it. Photo: Lynn Grieveson / The Kākā

Briefly in the news¹ in Aotearoa’s political economy around housing, poverty and climate on Tuesday, November 4:

• Finally, just over a year after the Reserve Bank started cutting the official cash rate, new mortgage debt is about to start heating up the housing market and the rest of the economy. It is already nudging building approvals higher.

• However, building activity beyond housing remains soft, with building of hospitals, schools and other publicly-funded infrastructure about to start falling again in annual terms. (Stats NZ data)

• The question now is whether the credit surge into housing will be big enough and early enough to fire up the economy before the election late next year, and deliver the polling support the coalition needs to be sure of a second term.

• The Government may get help from a divided and uncertain Opposition. Te Pāti Māori’s President, John Tamihere, called yesterday for two of TPM’s six MPs to resign, after they called for a vote of no confidence in him, and he said they wanted to replace the Parliamentary Party’s Co-Leader leaders too. (RNZ)

• Also, Labour says it won’t be able to provide key details about valuing assets for its capital gains tax until after the election. Meanwhile, Nicola Willis emphasised the CGT will be the main election battleground next year by highlighting questions about property sold as parts of whole businesses or farms. (RNZ)

• Some issues aren’t going away though, particularly in the health system, where the Coalition’s attempts to squeeze the size of Government back down under 30% of GDP keeps butting up against escalating mental health and obesity crises, allied to ageing populations. (Mental Health & Wellbeing Commission report)

• The cascading effects of the health crisis and the current Government’s firefighting approach are evident in two areas in the news today

• Firstly, through its plans to tack on pre-fabricated A&E spaces to deal with overcrowding, even though doctors and nurses say it’s pointless without more staff and hospital beds downstream. (1News)

• Secondly, the justice and prison systems are feeling the effects too, with an exodus of psychiatrists to Australia in recent years delaying psychiactric assessments for months, keeping prisoners on remand and delaying trials. (1News)

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Here comes the credit surge. Finally. Sadly?