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Anyone seen the rockstar economy lately?

Written By: - Date published: 10:30 am, January 28th, 2016 - 56 comments
Categories: accountability, class war, economy, national - Tags: , , ,

National keeps claiming the reputation of the party that is “good with the economy”, but the facts tell a different story.

The “rockstar economy” was always a myth, and this week the bad economic news has kept on coming:

NZ Government books running $1.6 billion in the red as tax take disappoints

Lower than expected tax revenue has helped push up the Budget deficit to over $1.6 billion for the five months to the end of November. …

Some of that is probably hangover from working so hard to fake a tiny surplus last time. In other news:

Ratings agency downgrades NZ economy outlook

A leading international credit rating agency has downgraded its outlook for New Zealand’s economy, saying it doesn’t expect growth to be as strong as previously thought.

The latest ASB Housing Confidence Survey out today showed a 25 per cent drop in the number expecting rises.

It all started with the irresponsible tax cuts for the rich, and it all adds up to “More cracks in Government’s economic façade“…

56 comments on “Anyone seen the rockstar economy lately? ”

  1. mulling it over 1

    Dairy farming won’t be adding anything much to the economy, but it’s certainly adding pollution into the water, cadmium into soil and adding to greenhouse gases. Somehow we are being spun the line that dairy is an economic necessity. Surely that’s bullshit

  2. Ad 2

    I was considering doing a post on the political room that National has now left Labour, now that Key has taken transport off the table after yesterday.

    Anthony, I think you are on the right track here.

    If I were writing Little’s speech for Sunday, my attack lines would go something like this:

    – The rich are getting fewer, and the poor are getting poorer. We’re going to turn that around.

    – 10 years ago, half the crowd in front of me would have owned their own house, now, less than a quarter of you here would have a show of buying anything. We’re going to get you into your own house.

    – None of you have any protection anymore if your boss decides to chuck you out. Apart from the 19% of New Zealand who belongs to a union. And that’s going to stop. Hey Talleys, we’re coming for you.

    – All the buildings and cranes and flash mirror glass you see around you aren’t for 99% of us New Zealanders. They are for the usual fat cats from here and overseas who are just sucking this place dry. We’re never going to get a look-in ‘behind the mirror glass’ unless we change it. We’re going to smash that glass.

    – This government, ‘they smile at your face but behind your back they hiss’. All the charm in the world won’t bring back good, honest government.

    Stuff in general that emphasizes a better distributed, faster-escalating, and higher ownership society.

    • BM 2.1

      I certainly hope he says most of that nonsense.

      Not that any one will be there listening to him.

    • Colonial Viper 2.2

      Ad, good speech, it is a shame you aren’t Little’s speech writer.

      I think however that his speech will be far more anodyne, though full of well worn Labour grand rhetoric, but in the end providing no material challenge against big business NZ or transnational corporates.

  3. Detrie 3

    Yep, total reliance upon ye old, discredited ‘trickle down’ economics. Govt statements are like watching Fox News, showering us with our daily dose of Spin, lies and Bull**it…

  4. BlueSky 4

    Its tripping out on acid.

  5. alwyn 5

    “The latest ASB Housing Confidence Survey out today showed a 25 per cent drop in the number expecting rises.”

    Perhaps you would care to explain why the ASB material is bad news?
    The highlights are that there is a drop in the number of people expecting house price increases and that people expect interest rates to remain steady. There is also a drop in the number of people thinking it is a good time to buy. That of course ties in with an expectation of stable, or even dropping prices.

    Just what is bad about that? Unless of course you own a lot of properties in Auckland and were relying on rapid price rises to make your fortune.
    We should be welcoming this as good news and a recognition that the LVR changes are having an effect.
    http://reports.asb.co.nz/report/article/22077/28/0/fewer-expecting-house-price-gains-but-see-interest-rates-staying-low.html

    • Nick Nack 5.1

      I agree. I own properties in Auckland and I’m more than content for prices to stabilise for the sake of my (and other peoples) children’s property ownership ambitions.

      • b waghorn 5.1.1

        If your so concerned you could sell them to first home buyers for a $200k less than gv.

        • Nick Nack 5.1.1.1

          Why would I do that?

          • b waghorn 5.1.1.1.1

            I never thought for a moment you would, do you realise how long house prices in Auckland would have to stand still for ,for wages to catch up to the recommended level of a house being three times the average income.?

            • Nick Nack 5.1.1.1.1.1

              Where does that come from? It sounds fairly arbitrary to me.

              I purchased my first house in 1985 and the cost price was around 5-6 times what my wife and I were earning. The other factor is that interest rates reached almost 20% in the 1980’s, today they are under 5%.

              Also the home loan affordability index at http://www.interest.co.nz/property/home-loan-affordability has shifted from 36.6 to 38 over the past five years, a very small change that shows affordability has been relatively stable comparing 2010 with now.

                • Nick Nack

                  My question was where does your recommended number of 3x come from?

                  Your link seems to confirm Alwyn’s point below as to when the problem began to appear. This problem originates with Government inaction over supply in the 2000’s, exacerbated by a failure to act on non-resident investment until 2015.

                  • b waghorn

                    Third paragragh down points towards what I was getting at. ( won’t let me cut and paste for some reason).
                    Do some goggling and i think you’ll find that 3 x is an excepted level of what is a healthy level of mortgage v income.
                    BTW I wish I had of brought a house in Auckland 4 years ago instead of Taumarunui , I would of been trading up to some land about now if I had, as there is no other way for a chap like me to make $100 k a year tax free.

            • In Vino 5.1.1.1.1.2

              Nick Nack

              You and your ilk have already done the damage. Your faux concern ‘for the sake of my (and other peoples) children’s property ownership ambitions’ are vain and empty words unless you make a self-sacrificing gesture such as b waghorn suggests.

              Face up to what you have done and accept responsibility.

              • Nick Nack

                What ‘damage’ are you referring to? If you’re referring to the unaffordability of housing, I am not responsible. People have done what I do (invest in rental properties) for decades without any adverse effects. Blaming me out of some resentment for what I have may somehow make you feel better, but it will never help advance the discussion towards meaningful solutions.

                • In Vino

                  So you do not understand collective guilt? Only individual? (And don’t worry about me feeling better… I don’t need to.)

                  May I refer you to Bob Dylan’s song “Who killed Davy Moore?”

                  None so blind as those who do not want to see. Your faith in property investment has caused this problem, but no, you are OK because others did it too. Myopia.

                  • Nick Nack

                    Property investment is not the problem. If it was, the problem of rapidly escalating house prices would have manifest itself decades ago. There are a number of causes of the rapid escalation in house prices in Auckland. People like me owning a few rental properties isn’t one of them.

          • sabine 5.1.1.1.2

            Well i can understand that you would not sell your overpriced wood boxes to your neighbours kids after all profit you know.
            But surely you would not want to screw your kids over expecting them to pay you profit on your overpriced wood boxes?
            surely.

            .

            • Nick Nack 5.1.1.1.2.1

              The market will determine the ‘price’, not you, not me. We’ll determine if and how we help our kids with home ownership when the time comes.

              • sabine

                but of course you will decide how you will help your children into home ownership, as they will not make it without help as many adult children have found out over the last few years.

                however, if they can’t afford Auckland they can always move elsewhere, no?

              • In Vino

                Self-centred right wing market preacher proudly states how he will help his own children into the criminally distorted Auckland house market after expressing faux concern for a whole lot of other children as well. Of course, he will put the welfare of all those other children onto someone else’s debt ledger while he continues to perpetuate the immoral stupidity of the spiralling Auckland house prices. I am not an Aucklander – I will shed no tears if silly Nick-Nack’s bubble happens to burst. I might even crack a dry smile. Just deserts.

                • Nick Nack

                  I will ignore the il-informed personal attack, but I am interested in how the Auckland house market is “criminally distorted”. Care to elaborate?

                  • In Vino

                    It is criminally distorted because it is now too expensive for all those poor other peoples’ children that you will not help (but you will help your own) even though you so patronisingly expressed concern for them – see your first post. There is no social justice here – only the arrogance of the greedy because they think they were clever in abusing a system that favoured them.
                    I do, of course, expect a huge protestation of innocence… I suspect that you have only ever tried to make money, and that you think that anyone who tries for a system that is fairer to more people is some kind of off-planet creature. Myopic again. Sorry if you think that is personal. It means short-sighted. OK?

                    • Nick Nack

                      Price is determined by supply and demand. Unless you can demonstrate some illegality in the incompetence of successive governments to deal with either side of this equation, you use of the word “criminal” is misplaced.

                    • Nick Nack

                      “I suspect that you have only ever tried to make money, and that you think that anyone who tries for a system that is fairer to more people is some kind of off-planet creature. ”

                      Why would you suspect that? Our investment in property is a long term strategy designed to provide us with an income in retirement. We see it as ‘safe’, conservative if you like. And more productive than the share market. We are not greedy, and we are not abusing any system.

  6. Colonial Viper 6

    The worse the economy gets, the more votes National will secure.

    • One Anonymous Bloke 6.1

      That’s how it always works, eh. The economy gets worse, the government increases its popularity. Every single time. Totes.

      • Colonial Viper 6.1.1

        OAB lolz. You refer to the general case. I am referring to this case. Just watch and wait.

  7. Colonial Viper 7

    Are there any political parties with plans to rein in the big banks which are sucking $5B out of the NZ economy every year, or to cancel the massive amount of private debt that Kiwis are suffering under and which greatly hinders future household formation?

    No?

    • Sabine 7.1

      of course there are no other political parties that would meet your standard as you are happy to make us understand at every given opportunity.
      I am waiting for you to create your party so we can join.

      Yes?

      • One Anonymous Bloke 7.1.1

        Let’s you and me join and overthrow the other member 😈

        • McFlock 7.1.1.1

          Stop being mean to the Popular Front of Judea!

        • Sabine 7.1.1.2

          but will there be music? Cause i only revolutionize if there is music and dancing 🙂

          • One Anonymous Bloke 7.1.1.2.1

            The incumbent has sanctioned music (and dancing) as a way for revolutionary cadres to break down barriers and meet one another, while he sits in a corner and cries. Special privileges will be granted to anyone who sits with him.

    • Tautuhi 7.2

      Would have been good if we had been able to hold onto the National Bank of New Zealand, the Bank of New Zealand and the Rural Bank.

      If my memory is correct the National Bank of New Zealand was once a major shareholder in Lloyds Bank of London?

      The Government were real clowns selling BNZ and the Rural Bank, they were gold plated investments built up by generations of New Zealand taxpayers money?

  8. “Tiny, fake surplus”

    Killer line.
    I hope it gets used 🙂

    • Colonial Viper 8.1

      Perhaps English should create a real surplus by raising GST on your property rates, cutting hospital surgeries, and slashing the benefit?

  9. Rosemary McDonald 9

    “Anyone seen the rockstar economy lately?”

    Follow that boat…

    https://youtu.be/3nwnZYX4tB4?list=PL0t9EGylrgR1wPEOin6j1jkDOpo_LWWhC

  10. Mosa 10

    Rock star economy ? I think the band has left the stage due to a bad peformance and our tickets aren’t refundable.

    • In Vino 10.1

      And don’t forget what some witty person already pointed out – it must be a Rock Star economy because the managers have already absconded with all the money.

    • David H 10.2

      Or it’s in Hospital on Life support, after a huge Overdose.

  11. aerobubble 11

    Being tough with budgets, harming the poorest is regarded as vote winning.
    Really?
    Surely undermining social cohesion, undermines the economy and so financial markets.
    When there are few young workers, their impoverishment is increasingly problematic to future economic stability.
    Global financial mess, planetary pollution, dislocated disenfranchised youth turning terrorism… …that’s why we have a PM of more of the same! High polling!

    The disconnect between reality and politics is staggering.

    • Stuart Munro 11.1

      It’s American strategy – coded racism. In the US poor means black or ‘white trash’ – in NZ the Gnats mean Maori. Not a good country to emulate.

    • Tautuhi 11.2

      Just cut the benefit altogether?

      • aerobubble 11.2.1

        Yeah bring on revolution as masses starve, and middle earners save more to cover crisises and the now indebt world spirals into Marxist prediction of capitalism eating itself. Sorry bro we’re here to save wealth not destroy it.

  12. Tautuhi 12

    Key has introduced USA Politics and Economic thinking to NZ and is stuffing it down our throats!!!

    Unfortunately most New Zealanders are wannabe John Keys BBF with Ritchie McCaw and the Royal Family, holidays in Hawaii, golfing buddies with Barrack Obama etc etc…

    However the reality of the situation is all the less fortunate people in NZ want a job, food on the table, a roof over their heads and a solid health and education system.
    We had that in the 1970’s however we followed the rest of the world down the Neo Liberal path where the rich got richer and the poor got poorer, however our leaders still don’t realise whats happened. We also have economic and political commentators fabricating the real situation?

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