Written By:
advantage - Date published:
1:00 pm, May 20th, 2024 - 51 comments
Categories: economy, elections, unemployment -
Tags:
It is sickening to see how economic power is being used against ordinary New Zealanders right now.
After the deliberate planning and execution of a recession by the Reserve Bank in the last year of the Labour government and this year, and the deepening of that recession by the National government through mass layoffs this year, there are now forecasts of untold thousands further losing their jobs in the private sector.
Anyone who thinks this is going to top out at 5.1% unemployed by the end of the year needs their head read.
This deliberate recession for hiring is at least as acute at that around the GFC.
It is disgusting that people in power are deliberately doing this to New Zealanders.
The current rise of populism challenges the way we think about people’s relationship to the economy.We seem to be entering an era of populism, in which leadership in a democracy is based on preferences of the population which do not seem entirely rational nor serving their longer interests. ...
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The inevitable response to excessive borrowing. Very ugly chooks coming home to roost.
Tax cuts for the rich are more important than public services.
Like NACT borrowing 15 billion for tax cuts for housing scalpers?
This kind of understanding is one of the mechanisms by which National gets away this their often terrible economic policy. The government doesn't rely on its borrowing for anything related to payments. It is entirely there so that the RBNZ can maintain higher interest rates.
The recession is entirely voluntary and will likely worsen the budget in percent of GDP terms to the extent that the government budget position comes out further in deficit than if the country avoided the recession by boosting government spending to begin with. That is to state the well known (even in mainstream economics) concept that cutting into a recession is bad economic policy.
Exactly, we need politicians with enough intelligence to find another way of defeating inflation, of course it doesn't help that the coc hates wellington civil servants , poor people, the unemployed ,workers and tenants
Governments usually criticise opposition parties for talking the economy down.
Perhaps for the first time in history we have a ruling government talking the economy down.
My suspicious cynical little mind tells me that National are setting us up for a thumping black budget. Black for anyone who is not a landlord, or wealth speculator or is on the rich list – that is. They wouldn't be doing this for no reason.
I predict that a GST rise will be announced in the budget.
See if I'm wrong.
The economy was in trouble well before the current government took over.
According to the Swiss Institute for Management and Development (IMD) annual rankings of competitiveness, NZ has fallen from 16th in 2017 to 31st in 2022. Our economic performance has fallen from 22nd to 47th, government efficiency has fallen from 7th to 17th. New Zealand’s economy a shadow of its former self | The New Zealand Initiative (nzinitiative.org.nz)
Our productivity has declined significantly since 2019 Geoff Simmons on X: "This graph is pretty striking: New Zealand's productivity performance is historically poor and now looks shocking h/t @dskilling https://t.co/eNZaPcQYF6" / X.
And the previous government left a series of financial time bombs or failing policies, including one just announced around Kainga ora. Bombshell Kāinga Ora review finds agency 'not financially viable', new chair, board 'refreshed' (msn.com).
One day the story of the last government will be written, and it won't be pretty.
Something like a low rate of death during the pandemic years and then a lot of people leaving New Zealand after the government fell behind in the polls in early 2023 – 50,000 leaving 2023-2024, then again 2024-2025 and onto 2025-2026. Because everyone could see there would no longer be an effort to match incomes (increases in MW FPA etc) and housing costs – less new homes being built, less secure tenancy and rents rising faster than incomes.
Good story, however here's the migration outflow since 2001. Migration | Stats NZ. Outflows have not shifted much over the years, however they were on an upward trajectory from February 2021 (at least partly due to pent up demand during covid).
My figures are the net migration of citizens.
A record loss in the year to Sept 2023 of 44,000. The previous record in 2012.
https://www.stats.govt.nz/news/record-net-migration-loss-of-new-zealand-citizens/
The story gets even more credible, when the figures rose to 50,000 in the year to March 2024.
Most expect it to be 50,000 again by March 2025.
https://www.1news.co.nz/2024/05/15/stratospheric-exodus-of-skilled-workers-huge-loss-for-nz-expert/
Your comment was about 'a lot of people leaving', not net migration.
Have a look at the same graph. The arrivals (which increased significantly from mid to late 2022) masked the full impact of the departures, which began to rise from early 2021.
So you took nothing from the 50,000 leaving in the year to March 2024.
It could and does relate to only one thing the net loss of 50,000 citizens.
It has been news in past week or so.
What I take is a trend. You stated:
"a lot of people leaving New Zealand after the government fell behind in the polls in early 2023…" and…
Because everyone could see there would no longer be an effort to match incomes (increases in MW FPA etc) and housing costs – less new homes being built, less secure tenancy and rents rising faster than incomes.
What I'm pointing out to you is that the increase in departures began in 2021. Under the last government, and before any poll changes in 2023.
The previous departure trend was because of end of lockdown – and return to easier travel.
The one I referred to was more recent – and is one of citizens leaving to live overseas.
The largest net outflow of citizens ever, and the next largest was back in 2012.
And yet it is one which is expected to occur again in the year ahead because …
I stated above the departure trend would have begun due to covid release. But the trend continued, and by late 2022 the rolling annual numbers were up at 100,000. The 2024 figures are just a continuation of that trend.
Others have noted three things
1.more locals coming and going since the end of lockdown, with travel back on
2.the large number of worker migrants 2022-2023
3.and most recently the large number of citizens leaving April 2023- March 2024 to live elsewhere, most ever in a year. More than the previous high in 2012.
No surprise that decades of neo-Liberal mis management has stuffed NZ.
This lot doing more of the same, in spades, will inevitably make it even worse.
I am not even taking satisfaction in"I told you so" because the consequences for so many will be dire.
The NZ, comically named "Initiative" already tried and failed solutions, however are proven prescriptions for disaster, as the UK found with Trussonomics.
The deterioration in NZ's economic position took place under the last Labour government. We are still finding out just how bad things got. There is nothing for you to say "I told you so" about.
Rubbish.
Take the partisan blinkers off.
Government measures under Covid left us better off than comparable countries.
And improving by most measures, including the ones you quote.
We can see Nationals engineered recession biting right now. Real business confidence is dropping, as shown by the lack of investment. Unemployed and low waged customers don't buy much.
A return of borrowing, for tax cuts for the wealthy and house scalpers, with reduced spending on infrastructure, essential services and the future. The main cause of our ongoing issues.
As usual we will see lack of State investment pulling us down. A return to selling houses to each other, which only overseas banks, and a few NACT cronies, really profit from. Along with a sugar fix of excessive immigration to keep wages low and house prices high. The selling off of income earning assets for short term gain for a few.
Environmental and social vandalism which a few years of progressive Government will struggle, as usual, to fix.
The material I posted consisted of comparisons with other countries who also faced covid. The productivity comparisons are particularly damaging, given the decline in NZ's productivity was continuing when others were recovering.
As for Covid, we fared ok. At the time the stats stopped being collected (April 2024) we had the 94th highest deaths per capita out of 231. Not bad, not great.
https://www.worldometers.info/coronavirus/
The headline for Kāinga Ora should read.
"National reacts with shock when they find house building, to replace the ones they flogged off, costs money!"
Did you read the article?
It found the social housing system is not socially or financially sustainable.
A report by the Treasury and the Ministry for Housing and Urban Development found Kāinga Ora's level of debt had grown from $2.7 billion in 2018 to $12.3 billion in June 2023.
Which is during the term of the last government.
The review said the agency has been reporting operating deficits before tax over the past four years.
Again, during the term of the last government.
The review made two broad findings:
"First, Kāinga Ora is underperforming and not financially viable without significant savings as well as funding and financing changes. Second, the wider social housing system is not delivering the results New Zealand needs, and is lacking in transparency and accountability, coupled with a poor understanding of tenant outcomes," Bishop said.
Bombshell Kāinga Ora review finds agency 'not financially viable', new chair, board 'refreshed' (msn.com)
Why did I know you wouldn't get the irony.
What kind of psycho thinks social housing should be profitable?
It’s not about being profitable, Nic, it’s about accountability for tax payers money allocated to the particular activity. This type of mismanagement became a bit of a habit under the last government.
A narrative to persuade the gullable. Like you!
An example is perfectly normal time limited funding, which NACT is also doing as we speak, characterised as “fiscal cliffs”.
A narrative of fiscal responsibility is not for the gullible. The past Chair and a number of Board members of KO are finding that out.
One of the persistant, well financed, propaganda memes, is the right wings "fiscal responsibility".
In reality, statistics over time show anything but!
But. Repeat bullshit often enough…
This problem was the fault of Key's Government. Their stupidity in getting rid of public housing is why we now have the several billion dollar bill to fix it, that NACT have “discovered”. Obviously they havn't been paying attention while in opposition.
Now. This coalition of clowns is going down the same track. A short sighted track which will cost many more billions to fix in future. Denying reality is "sad and pathetic".
This has nothing to do with any previous National government. This is about a government entity being allocated budget monies over which its oversight has been abysmal. And this was a pattern of the Ardern government. Te Pukenga. 3 Waters. The InterIslander project.
Bullshit.
This is spending on necessary infrastructure, which National is again. "kicking down the road".
Just like future proofing rail ferries and polytechnics which NACT has now abandoned.
"This is spending on necessary infrastructure…"
That was not managed appropriately within budget constraints.
According to the arson who fucked up state housing during the previous National Government.
So it turns out the correct answer to my question is "former Prime Minister Bill English". I'm pretty sure Chris Bishops public statements are already impossible to implement while having Kainga Ora return funds to the government (English previous policy on the budget for social housing) so he will soon be repeating his performance as minister for dancing on the head of a pin, but good on him for being willing to say he was "ruling things out".
The review was conducted by a panel, led by Bill English, alongside Ceinwen McNeil and Simon Allen. The panel uncovered issues of significant financial mismanagement, including a lack of financial sustainability, and a lack of transparency and efficiency in asset procurement. Here's one comment:
We found that Kāinga Ora is not financially viable, under current settings and this is further compounded by limited attention to value for money and opaque apportionment of costs and revenue within Kāinga Ora, making it difficult to identify the underlying drivers of financial results.
Independent Review of Kainga Ora.pdf (beehive.govt.nz)
I already put my finger on the issue. Bill English believes that Kainga Ora should be returning money to the central pool each budget. There is no other way for this department to be made compatible with the governments budget stance than shrinking social housing provision, because given its client base its not going to be made profitable based on the rents it can charge.
You can throw about words like financial miss-management all you like and claim this has a tangible meaning, by all means fool yourself all you want. The only thing which has changed here is the governments budget commitment to expanding the provision of social housing in line with social need for it (which has gone away).
The review has nothing to do with what anyone 'believes'. The review was carried out by a panel of 3 and included consideration of formal and informal submissions. The scope of the review is set out on page 5 (Independent Review of Kainga Ora.pdf (beehive.govt.nz)).
And the oversight issues relate to monies voted in past budget allocations. I'll quote from pages 14 and 15:
"Budgets provided to the board are not sufficiently clear or detailed
For example, in the May 2023 board budget pack:
• there was no Statement of Financial Position
• the budget assumes that new lending of several billion dollars from the government will be approved (My emphasis added).
• the build pipeline includes a line entitled “Zero Net Growth” describing disposals of an indeterminate kind of over 3,000 homes per year
• does not provide a budget scenario where Kāinga Ora is limited to the funding agreed by the government
If you don't want to read the entire report, just read the Executive Summary.
So you're just blindly believing old double dipton when he turns up with a report the suits nationals narrative??
Well if you have an alternative analysis, you are welcome to present it.
Well if national had got someone independent rather than there last pm I might give it more weight than the paper I just flushed
The review was the work of a panel, led by Bull English with Simon Allen and Ceinwen McNeil. If you have any concerns about the quality of the review or the findings and recommendations, you can argue them.
"Bull English" Freudian slip there as Double Dipton is soooo honest.
One day the story of how many people would have died if National had been in power during the COVID crisis will be written, based on the opposition they voiced to so many of Labour's measures.
That won't be pretty either.
That would be a story of hypotheticals.
Your story would be one of hindsight.
Yes, that is the way reviews are conducted.
No a GST would hold up inflation and mortgage rates – this lot want an increase in property values.
Yes, of course it’s deliberate to maximise mass misery in NZ. Because this will cause inflation (CPI) to fall and since this coalition government has indexed benefits to CPI this means that the Social Welfare cost to the government will drop significantly. Cui bono?
The narrative of "waste" has been sold to the electorate, as the cause of inflation. (Waste by Labour).
The cure according to the current COC story tellers is austerity.
Oh but wait, they self correct, what they are doing is not austerity, it is a recession, a necessary correction.
Wait up… a recession is two quarters of negative growth.
We are in the fourth quarter of negative growth according to published statements on interest.co.nz
So yes it is deliberate calculated, and at the risk of being boring, Jane Kelsey has written books describing this type of economic manipulation, especially "The Fire Economy"
PM Luxon to the converted "Labour are arsonists!! They are complaining we are putting the out fire they lit ".
Hold on, "The Fire" started in Dec 2023 a quarter after Luxon gained office, and they have poured petrol on the recession with all the sackings and now we are heading for a depression.
The Polls show a dawning recognition of the pattern, and a faltering belief in the "medicine" provided by the three COC members.
Rates Insurance Transport and dare I say it, Water costs were not mentioned in the sales pitch. I think we know why.
They have undermined our confidence security and futures, and they blame ordinary folk who are leaving in droves, voting with their feet.
Why are we expected to believe this is "good" for our futures when it seems dystopian and gloomy.
Selling off a large volume of those houses (say 30000) would correct the books.