Explosive population growth means Government stimulus per person is much less than Budget 2023's reported stimulus to GDP, CPI; Spending restraint & capex starvation sets up infrastructure squeeze
May 22, 2023·edited May 23, 2023Liked by Bernard Hickey
Thanks Bernard. Now we're actually through the budget, I feel like political promises can start actually getting interesting (that is, provided Cuckson and co. can move on from their senseless 'opposition').
...Of course, all this is moot if the US don't pull a debt-agreement out of their hat in the next week -sounds like that could yet be rubbish-bins-through-shop-windows-people-waving-hands-while-running-around-on-fire levels of fun for the globe!
May 22, 2023·edited May 23, 2023Liked by Bernard Hickey
The more I've thought about this budget the less I've worried about how it could be inflationary. Yes the cyclone spending will probably increase aggregate demand, but also it's not like there's very much choice, we sort of have to do it so it's not worth worrying about.
But it's the "cost of living" measures, where we do have discretion, that I'm not as worried about anymore. The 20 hours for 2 year olds, pay parity for ECE, and other spending to encourage uptake of childcare services; these should all work to increase the supply of labour. Same as the half-price public transport. Sure those under-25s might be taking the cheap bus to spend money at the shops and increase demand; but it seems just as likely they'll take the cheap bus to go to a job.
We shouldn't only think about reducing demand to fight inflation, we should also work to increase supply! Two sides of the same coin.
(Scrapping the $5 co-payment is no brainer for other reasons already covered by The Kākā 🙂)
I note your note on using Maori name for Reserve Bank with the normal title in brackets. I prefer Reserve Bank, as we have known it for decades, first. Same with these suburb name changes noted in news yesterday.
Tony Alexander has been making that same prediction for over a year now - copy and paste. While the housing market is bound to rebound sooner rather than later, for migration reasons this Chorus has highlighted, I think we have a while to go yet before we can even talk about price increases.
We were told that a suburb we are looking to buy in had 140 listings in April, and only 8 sold. My observation is that vendors aren't willing to accept the prices people are willing to pay - when vendors actually start meeting the market (likely because they have to sell), then price falls will continue.
Does the analysis change if you factor in the increasing number of people aging out of the workforce and increasing demand on health sector and superannuation etc?
Across our three largest cities there were 90k work ready (not on disability) people at the end of 2022. The govt chipped in 61m to raise starting bus driver rates and we could not find 1000 of those 90000 to drive buses for $30 an hour whilst being paid to train. Do we simply have to accept that we have to pay for a percentage of society to never work?
It will be interesting to see if Treasury's chief analyst on the current high net migration rate is correct when he says it is viewed there as a 'surge' following opening of the borders over the last 9 months. The net rate may well be 100,000 for the full 2023 calendar year, but he (and I think Stats too, as a max) believe it will settle down next year to around 40,000pa, the average of the last 10 years. I hope he's right - like Bernard, I believe even that is too high and the composition is too skewed to cooking us meals and serving our lattes. One thing that might make that net forecast 'right'. which I regret, is a larger than expect surge to, and retention of kiwis in, Australia.
I think few realise you can work all your life in Australia, withdraw all your super from your fund after 60, where the employer has been putting 12% of your earnings from 2024, sell your house and come back here to receive the full NZ NatSuper. The 'normal' qualification period now of 20 years here after you are twenty, and five of them between 50 and 65, does not apply if you have been overseas in Australia. Then you can go back there and live for up to 6 months continuously in Aus on the NZ pension. If you had stayed in Aus, you would not normally have qualified for the Australian Age Pension, which is means-tested. When this penny drops fully, we might experience a higher drain to Aus than we otherwise would have. You can just come back at no cost when it gets too hot there.
is there a complete publicly available listing anywhere of the jobs/occupations that ALL of the immigrants into New Zealand are working at/in? (including those who are not working)
Quite reasonable to lead with te reo Māori terms in here, good shout.
However, this trend is out of hand at Auckland Transport now, with critical directional signage, and even EMERGENCY notices in Britomart elevators now showing reo first/bolded and English in lowly italics underneath.
"If you are experiencing shortness of breath...please hope you learnt fluent te reo or can remain conscious long enough to reach the bottom of this extensive paragraph on emergency procedures..."
Who are these people and WTF do they think they're going to achieve.
The global corporates who shift revenue to avoid paying higher tax really make me angry. I very much support the government (what ever colour) finding a solution for this. I appreciate it is hard, but surely with the amount of potential tax take at stake it'd be worth investing in a rather rapid solution. Bernard, has this been solved in other countries to your knowledge?
We’ve been told we need to decrease employment numbers and increase interest rates to curb inflation. Doesn’t this just drive a wedge between rich and poor even further? Why doesn’t taxation ever come on the table as a way to recoup some of the money poured into the economy. Does the young home owner have to pick up the bill through lower wages and higher mortgage payments, all the while shuffling the interest off to Australia? Seems like madness
Explosive population growth? We may need to wait and see the migration stats towards the end of the year and following the election first to establish if the population has been both 'explosive' and then, more importantly substantially sustained.
Thanks Bernard. Now we're actually through the budget, I feel like political promises can start actually getting interesting (that is, provided Cuckson and co. can move on from their senseless 'opposition').
...Of course, all this is moot if the US don't pull a debt-agreement out of their hat in the next week -sounds like that could yet be rubbish-bins-through-shop-windows-people-waving-hands-while-running-around-on-fire levels of fun for the globe!
The more I've thought about this budget the less I've worried about how it could be inflationary. Yes the cyclone spending will probably increase aggregate demand, but also it's not like there's very much choice, we sort of have to do it so it's not worth worrying about.
But it's the "cost of living" measures, where we do have discretion, that I'm not as worried about anymore. The 20 hours for 2 year olds, pay parity for ECE, and other spending to encourage uptake of childcare services; these should all work to increase the supply of labour. Same as the half-price public transport. Sure those under-25s might be taking the cheap bus to spend money at the shops and increase demand; but it seems just as likely they'll take the cheap bus to go to a job.
We shouldn't only think about reducing demand to fight inflation, we should also work to increase supply! Two sides of the same coin.
(Scrapping the $5 co-payment is no brainer for other reasons already covered by The Kākā 🙂)
I note your note on using Maori name for Reserve Bank with the normal title in brackets. I prefer Reserve Bank, as we have known it for decades, first. Same with these suburb name changes noted in news yesterday.
Tony Alexander has been making that same prediction for over a year now - copy and paste. While the housing market is bound to rebound sooner rather than later, for migration reasons this Chorus has highlighted, I think we have a while to go yet before we can even talk about price increases.
We were told that a suburb we are looking to buy in had 140 listings in April, and only 8 sold. My observation is that vendors aren't willing to accept the prices people are willing to pay - when vendors actually start meeting the market (likely because they have to sell), then price falls will continue.
Does the analysis change if you factor in the increasing number of people aging out of the workforce and increasing demand on health sector and superannuation etc?
Across our three largest cities there were 90k work ready (not on disability) people at the end of 2022. The govt chipped in 61m to raise starting bus driver rates and we could not find 1000 of those 90000 to drive buses for $30 an hour whilst being paid to train. Do we simply have to accept that we have to pay for a percentage of society to never work?
It will be interesting to see if Treasury's chief analyst on the current high net migration rate is correct when he says it is viewed there as a 'surge' following opening of the borders over the last 9 months. The net rate may well be 100,000 for the full 2023 calendar year, but he (and I think Stats too, as a max) believe it will settle down next year to around 40,000pa, the average of the last 10 years. I hope he's right - like Bernard, I believe even that is too high and the composition is too skewed to cooking us meals and serving our lattes. One thing that might make that net forecast 'right'. which I regret, is a larger than expect surge to, and retention of kiwis in, Australia.
I think few realise you can work all your life in Australia, withdraw all your super from your fund after 60, where the employer has been putting 12% of your earnings from 2024, sell your house and come back here to receive the full NZ NatSuper. The 'normal' qualification period now of 20 years here after you are twenty, and five of them between 50 and 65, does not apply if you have been overseas in Australia. Then you can go back there and live for up to 6 months continuously in Aus on the NZ pension. If you had stayed in Aus, you would not normally have qualified for the Australian Age Pension, which is means-tested. When this penny drops fully, we might experience a higher drain to Aus than we otherwise would have. You can just come back at no cost when it gets too hot there.
is there a complete publicly available listing anywhere of the jobs/occupations that ALL of the immigrants into New Zealand are working at/in? (including those who are not working)
Quite reasonable to lead with te reo Māori terms in here, good shout.
However, this trend is out of hand at Auckland Transport now, with critical directional signage, and even EMERGENCY notices in Britomart elevators now showing reo first/bolded and English in lowly italics underneath.
"If you are experiencing shortness of breath...please hope you learnt fluent te reo or can remain conscious long enough to reach the bottom of this extensive paragraph on emergency procedures..."
Who are these people and WTF do they think they're going to achieve.
Some of the questions raised in the clip below are worth following up this side of the Tasman as well.
Inflation & the Banks | Q+A - ABC News In-depth
May 23, 2023
https://www.youtube.com/watch?v=QRzUrMh-LX4
The global corporates who shift revenue to avoid paying higher tax really make me angry. I very much support the government (what ever colour) finding a solution for this. I appreciate it is hard, but surely with the amount of potential tax take at stake it'd be worth investing in a rather rapid solution. Bernard, has this been solved in other countries to your knowledge?
We’ve been told we need to decrease employment numbers and increase interest rates to curb inflation. Doesn’t this just drive a wedge between rich and poor even further? Why doesn’t taxation ever come on the table as a way to recoup some of the money poured into the economy. Does the young home owner have to pick up the bill through lower wages and higher mortgage payments, all the while shuffling the interest off to Australia? Seems like madness
Explosive population growth? We may need to wait and see the migration stats towards the end of the year and following the election first to establish if the population has been both 'explosive' and then, more importantly substantially sustained.