GDP falls 0.3% in Q3, renewing talk RBNZ can cut OCR from early next year; Wholesale rates down 100 bps since Oct, begging questions on when banks will pass on as lower fixed mortgage rates
A local supermarket is selling a NZ blue cheese for $131 per kg. A local cheese shop is selling the same blue cheese for $85 per kg. Of course the supermarkets aren't price gouging (s).
Comment in the news from Jarrod Kerr the Kiwibank economist “We'll see house price gains next year. That'll be good for a lot of Kiwis.” but bad for many others renting
Rental trend: Looking back as far as 2010 rent increased steadily after the GFC pause, but the rate of increase has accelerated further since 2017. The fundamentals haven't changed for many years but recent legislative changes appear to have worsened matters. It points to needing more residential building encouraged for BOTH private and public providers.
the last Labour government encouraged building of new residential rentals by allowing mortgage interest deductibility from income for new rental builds and allowing no capital income tax to be payable for new rental properties sold after 2years of ownership.
How the hell can further house price increase be good for our country?! “A lot of Kiwis” infers that it’s good for our society. It makes me so angry when economists and politicians and people in the media say things like that. And depressed. And antisocial.
'Our largest bank, ANZ Bank New Zealand, had directed 80.2% of its lending, excluding its institutional banking activities, into home loans at Sept 30, up from 78.7% a year earlier.... Not so long ago, at about the time we adopted the Basel ll rules in 2008, home loans accounted for roughly half the major banks' balance sheets. Obviously, a number of complex factors have contributed to our dysfunctional housing market and many drivers are nothing the RBNZ can control, such as immigration, building of new houses and land available on which to build houses. But it's undoubtedly also true that the rules the Reserve Bank has set for the banks are a major contributor to a pretty stuffed housing market.'
there are some interesting thoughts around the 350,000 EVs not purchased if the clean car discount isn't continued - to purchase that many cars would require the importation of $21Billion worth of vehicles to save $900 million in fuel imports. WE already have a very large trade deficit so we are planning to spend money we dont have to import this fleet. To pay for the import of this fleet of vehicles we would need to export 7 Million tonnes of milk powder = that have been processed in coal fired driers. Unfortunately all of the income from milk powder exports is already spent - and some - and then the green faction of our political leadership want to reduce our diary herd further reducing our ability to pay for our imports.
It is also interesting to note that this same post incudes comment about how house price increases are going to make some sections of our community "wealthier" - it isn't - wealth of this kind is ephemeral - it is not earned through productive activity - it is bloat not substance - our economy has got "wealthy" through about one trillion dollars of property price inflation over the past three decades creating the mirage of "wealth" but the real indicator of our wealth is what we can afford to buy through trade across our border - and that picture looks grim. All the inflated property market has done is inflate our indebtedness and the Australian bank's profits - and delude us collectively that we are rich. We aren't, we are deeply in debt and it is going to get worse - at least while we adhere to the present neoliberal economic model.
The most straight forward way of getting off our addiction to fossil fuels is to convert our existing fleet of IC vehicles which we have bought and paid for - to biodiesel and synthetic methanol (even a 50/50 mix with of bio and fossil fuel would make a huge difference)- and using them less! The other/additional option is to get our road freight and long distance passenger transport onto to electrified rail.
Oddly enough all things Rob Muldoon was doing in the 1980's before the two clowns Lange and Douglas got their hands on the controls.
Just because you can think nice ideas like electrifying the vehicle fleet doesn't mean that idea is achievable - and the import cost doesn't take into account the need for/cost of all of the addition electricity generation required to run the fleet (about 7GW for 350,000 cars)
I own an EV and it is marvelous - and it will also pay for itself over its life in fuel cost savings but it is also clear that it is not the answer to our future transportation needs - it is an electrified version of yesterday's fuel guzzler - if we are to have EVs in the future - much more compact ones with modest performance is going have to be the model - Elon Musk's fantasies of searing high performance EV's is your electrified dinosaur in its death throes - there is absolutely no point in building electric vehicle capable of twice the legal speed limit and acceleration that rivals a drag racer for getting around city street.
Just picked up some shopping and more than half the vehicles in the car park twin cab Utes. Now I know at this time of the year the shopping trolley gets fuller but a Ute to go shopping? They should have increased the Ute tax for none business vehicles to help jolt NZ out of it’s chronic autobesity
Hi Andrew - what is interesting about the hate utes bit - I sold one (with 2.4l twin turbo diesel engine) before I got my EV is that the latest lot are actually very fuel efficient for its size - i regularly got between 7.5 and 9l/100km - and it was way more useful than a car with the same fuel consumption - also it is likely to be simpler to run diesel engines on biofuel than petrol. The bigger issue is that lots of people are buying ever bigger and more luxurious vehicles whether EV diesel or petrol - which again goes back the issue of the fake wealth our inflated housing market has created - many "wealthy" people in NZ have got wealthy by doing nothing productive - our former prime minister John Key being a great example. These activity of these people are a cost to our economy not a profit - meanwhile farmers - who actually do the productive work that creates real wealth upon which our economy is based are being driven to the wall. The wrong people in our economy are making all the money!
Agree. On a related note, I thought COVID lockdowns taught us that the people who produce and distribute our food, the people who ensure we have clean water and and functioning sewage systems, the people who collect and sort our trash, and the people who look after our sick and our elderly, and those who ensure our electricity and telecommunications work, are the ones who deserve top place (and better remuneration) in our society.
Definitely! but it is the Pharisees, the money changers and the courtesans to the king who have captured the nation's wealth! Nothing changes other than the methods for transferring wealth from the many to the few!
Im not so sure - I drive a Lexus (Toyota) EV and it is great - I suspect there is a degree of wait and see in some if the present situation - they are doing enough to hang on in in the race before betting the farm on EVs - for lots of people a hybrid will do the job
Will be interesting when rates do start falling what they will bottom out too. Market conditions and supply chains are fragile and won't be recovering to 2010s resilience.
Anticipating some sort of energy shock over the couple of years (there are strong signs of this geopolitically and come from a couple different regions) will be another bump in the road.
Regarding Cook Strait ferries and the infrastructure required to let them dock, I tire of the rhetoric that talks of "taxpayers" footing the bill, or as Willis has said, "should not foot the bill". Investments like this do not cost the taxpayer. Yes, it's a state investment, with ultimate liability to the public purse if it were to fail. But that is not likely. When can we get away from this ridiculous neo-liberal rhetoric?
And this “taxpayer's money" mantra is such a sign of illiteracy. Taxpayer's money is the money left for a person after paying tax. Tax money is public money.
remember Mao tse tung (now called ze dong) and the Red Army (not so long ago) lined up all those they disliked and shot them (millions of them) and those they didn't shoot were sent to rural areas to produce food.
Besides mortgage costs, some food prices remain hideous. Any idea Bernard on whether food retailers and supermarkets are price gouging ?
Hi Tracy
A local supermarket is selling a NZ blue cheese for $131 per kg. A local cheese shop is selling the same blue cheese for $85 per kg. Of course the supermarkets aren't price gouging (s).
Comment in the news from Jarrod Kerr the Kiwibank economist “We'll see house price gains next year. That'll be good for a lot of Kiwis.” but bad for many others renting
https://figure.nz/chart/azFwYTVvUcrcxT3m-Cn6TyuSQBZ8Kacee
Rental trend: Looking back as far as 2010 rent increased steadily after the GFC pause, but the rate of increase has accelerated further since 2017. The fundamentals haven't changed for many years but recent legislative changes appear to have worsened matters. It points to needing more residential building encouraged for BOTH private and public providers.
the last Labour government encouraged building of new residential rentals by allowing mortgage interest deductibility from income for new rental builds and allowing no capital income tax to be payable for new rental properties sold after 2years of ownership.
And bad for their children...when the average house price is $2million in 10 years' time. Where does this end NZ????
This type of rhetoric is irresponsible. How many people are pushed into depression by this type of talk?
How the hell can further house price increase be good for our country?! “A lot of Kiwis” infers that it’s good for our society. It makes me so angry when economists and politicians and people in the media say things like that. And depressed. And antisocial.
A thought from Jenny Ruth:
'Our largest bank, ANZ Bank New Zealand, had directed 80.2% of its lending, excluding its institutional banking activities, into home loans at Sept 30, up from 78.7% a year earlier.... Not so long ago, at about the time we adopted the Basel ll rules in 2008, home loans accounted for roughly half the major banks' balance sheets. Obviously, a number of complex factors have contributed to our dysfunctional housing market and many drivers are nothing the RBNZ can control, such as immigration, building of new houses and land available on which to build houses. But it's undoubtedly also true that the rules the Reserve Bank has set for the banks are a major contributor to a pretty stuffed housing market.'
https://justthebusinessjennyruth.substack.com/p/bothersome-imbalances-in-banking
Kia ora Bernard. Are you up with the play on today's Substack action?
https://emilywrites.substack.com/p/substackers-against-nazis
https://davekarpf.substack.com/p/on-substack-nazis-laissez-faire-tech
there are some interesting thoughts around the 350,000 EVs not purchased if the clean car discount isn't continued - to purchase that many cars would require the importation of $21Billion worth of vehicles to save $900 million in fuel imports. WE already have a very large trade deficit so we are planning to spend money we dont have to import this fleet. To pay for the import of this fleet of vehicles we would need to export 7 Million tonnes of milk powder = that have been processed in coal fired driers. Unfortunately all of the income from milk powder exports is already spent - and some - and then the green faction of our political leadership want to reduce our diary herd further reducing our ability to pay for our imports.
It is also interesting to note that this same post incudes comment about how house price increases are going to make some sections of our community "wealthier" - it isn't - wealth of this kind is ephemeral - it is not earned through productive activity - it is bloat not substance - our economy has got "wealthy" through about one trillion dollars of property price inflation over the past three decades creating the mirage of "wealth" but the real indicator of our wealth is what we can afford to buy through trade across our border - and that picture looks grim. All the inflated property market has done is inflate our indebtedness and the Australian bank's profits - and delude us collectively that we are rich. We aren't, we are deeply in debt and it is going to get worse - at least while we adhere to the present neoliberal economic model.
The most straight forward way of getting off our addiction to fossil fuels is to convert our existing fleet of IC vehicles which we have bought and paid for - to biodiesel and synthetic methanol (even a 50/50 mix with of bio and fossil fuel would make a huge difference)- and using them less! The other/additional option is to get our road freight and long distance passenger transport onto to electrified rail.
Oddly enough all things Rob Muldoon was doing in the 1980's before the two clowns Lange and Douglas got their hands on the controls.
Just because you can think nice ideas like electrifying the vehicle fleet doesn't mean that idea is achievable - and the import cost doesn't take into account the need for/cost of all of the addition electricity generation required to run the fleet (about 7GW for 350,000 cars)
I own an EV and it is marvelous - and it will also pay for itself over its life in fuel cost savings but it is also clear that it is not the answer to our future transportation needs - it is an electrified version of yesterday's fuel guzzler - if we are to have EVs in the future - much more compact ones with modest performance is going have to be the model - Elon Musk's fantasies of searing high performance EV's is your electrified dinosaur in its death throes - there is absolutely no point in building electric vehicle capable of twice the legal speed limit and acceleration that rivals a drag racer for getting around city street.
Just picked up some shopping and more than half the vehicles in the car park twin cab Utes. Now I know at this time of the year the shopping trolley gets fuller but a Ute to go shopping? They should have increased the Ute tax for none business vehicles to help jolt NZ out of it’s chronic autobesity
Hi Andrew - what is interesting about the hate utes bit - I sold one (with 2.4l twin turbo diesel engine) before I got my EV is that the latest lot are actually very fuel efficient for its size - i regularly got between 7.5 and 9l/100km - and it was way more useful than a car with the same fuel consumption - also it is likely to be simpler to run diesel engines on biofuel than petrol. The bigger issue is that lots of people are buying ever bigger and more luxurious vehicles whether EV diesel or petrol - which again goes back the issue of the fake wealth our inflated housing market has created - many "wealthy" people in NZ have got wealthy by doing nothing productive - our former prime minister John Key being a great example. These activity of these people are a cost to our economy not a profit - meanwhile farmers - who actually do the productive work that creates real wealth upon which our economy is based are being driven to the wall. The wrong people in our economy are making all the money!
Absolutely
Agree. On a related note, I thought COVID lockdowns taught us that the people who produce and distribute our food, the people who ensure we have clean water and and functioning sewage systems, the people who collect and sort our trash, and the people who look after our sick and our elderly, and those who ensure our electricity and telecommunications work, are the ones who deserve top place (and better remuneration) in our society.
Definitely! but it is the Pharisees, the money changers and the courtesans to the king who have captured the nation's wealth! Nothing changes other than the methods for transferring wealth from the many to the few!
Looks like a list of the industries which would have had FPA’s
the grossly excessive profits being made in NZ by the "big" banks are severely damaging New Zealand's economy and society.
Electric kei cars! Shame the Japanese are still in the EV denial phase
Im not so sure - I drive a Lexus (Toyota) EV and it is great - I suspect there is a degree of wait and see in some if the present situation - they are doing enough to hang on in in the race before betting the farm on EVs - for lots of people a hybrid will do the job
The good news from COP28: The failure to agree on Article 6 carbon markets. Everything else is bad news.
https://reddmonitor.substack.com/p/the-good-news-from-cop28-the-failure
Will be interesting when rates do start falling what they will bottom out too. Market conditions and supply chains are fragile and won't be recovering to 2010s resilience.
Anticipating some sort of energy shock over the couple of years (there are strong signs of this geopolitically and come from a couple different regions) will be another bump in the road.
loving the dawn chorus of birds ..👍
Regarding Cook Strait ferries and the infrastructure required to let them dock, I tire of the rhetoric that talks of "taxpayers" footing the bill, or as Willis has said, "should not foot the bill". Investments like this do not cost the taxpayer. Yes, it's a state investment, with ultimate liability to the public purse if it were to fail. But that is not likely. When can we get away from this ridiculous neo-liberal rhetoric?
And this “taxpayer's money" mantra is such a sign of illiteracy. Taxpayer's money is the money left for a person after paying tax. Tax money is public money.
when there are no more neo-liberals.
remember Mao tse tung (now called ze dong) and the Red Army (not so long ago) lined up all those they disliked and shot them (millions of them) and those they didn't shoot were sent to rural areas to produce food.