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Being stupid on the economy

Written By: - Date published: 10:02 am, February 23rd, 2009 - 20 comments
Categories: economy, employment, wages, workers' rights - Tags:

Brian Fallow  has some extraordinarily good analysis of the economic situation in his piece today. Here’s some important passages (and my, unfortunately, extensive comments):

“We are really talking about two recessions back to back,” AXA Global Investors chief economist Bevan Graham said. “Last year it was a domestic one, that we needed to have. There were excesses in the housing market and consumption that needed to be worked out. But then we get hit by this global storm.”

We had a very strong period of growth from 1999 to 2007. While policy was part of the reason for this (Labour’s full employment policy, for example, bedded in high domestic demand) there was an underlying demographic reality – the baby-boomers have been middle aged for the last decade, this means they’ve been at their peak earnings without dependents and looking to build a retirement nest-egg. And what’s safer than houses?

The wealth effect created by all this investment in housing added to high employment and high wage growth to fuel demand, which added inflationary pressure (leading to higher interest rates) and caused the trade balance to worsen as we imported more. You’ll recall that during this period National was demanding Labour throw more fuel on the fire through tax cuts, which would just have been more inflationary, while at the same time complaining that interest rates were too high because the Reserve Bank was trying to contain inflation. The real solution would have been to try to deflate the housing bubble and the accompanying wealth effect early and slowly with a capital gains tax on second homes but neither National nor Labour would go there. They were fixated on keeping the good times rolling forever. But you can’t remain at above-trend growth forever, eventually there needs to be a correction, and although that point had been put off both by good fortune and Labour policy a small, short recession primarily caused by the collapse of the housing bubble (and the drought and oil prices) was inevitable.

“For much of last year it was hoped that by now the economy would be in an export-led recovery. Instead world trade is shrinking.”

Unfortunately, the rest of the developed world had also been in a long-term boom and it came to a crashing halt with the collapse of other housing bubbles and record prices for oil and commodities (the relationship between the commodities spike and the housing collapse will be an interesting topic of study for economists). The global finance sector was greedily geared towards permanent boom times. When things started to go bad, people couldn’t afford their mortgage payments which underpinned the value of trillions in investments. The finance sector went into meltdown sending the broader world economy into recession (we had earlier seen something similar on a small scale with the collapse of finance companies here).

In theory, with low interest rates, a lower dollar, lower house prices, ‘spare capacity’ in the labour market, and stimulus from Labour’s tax cuts and 2008 Budget spending, we should be set for recovery but the international situation, particularly the shortage of credit and falling demand for our exports is blocking that. Instead, all the money we borrowed from overseas on the back of the housing wealth effect so we could buy more imports leaves us dangerously exposed now the lending has dried up, and we have a negative wealth effect from people seeing the value of their assets (houses, shares) fall. This is leading to more people becoming unemployed.

“The year started with 105,000 people or 4.6 per cent of the workforce unemployed. Forecasters expect it to be closer to 7 per cent by the end of the year [the New Zelaand Insitute is saying up to 11.2%]. Every percentage point increase represents around 23,000 people. The effects spread beyond those who lose a job or cannot find one, and their families. The fear of losing their jobs encourages people to spend less and reduce debt or build up precautionary savings. The risk is a vicious circle where cautious consumers spend less, leading businesses to invest less and employ fewer people, leading to a further contraction in spending.”

We need to head off this secondary round of contraction by stopping unemployment reaching high levels (the current 4.6% is still lower than we ever had between 1987 and 2003 but hours worked are falling sharply). That’s what the rest of the world is trying to do with massive stimulus programs like the trillion dollars and more the US, the EU, and China are each injecting into their economies this year and next. It might work (frankly, if those economies do start to grow as a result of their packages, I suspect it’ll just spark another oil spike, slamming the world back into recession). What won’t work is doing nothing, which is essentially what National is doing – sure it has moved forward by a year or two a few roading projects but it also reduced its tax package, slashed Kiwisaver and R&D tax credits, has signalled spending and wage freezes for the public sector, and made only a token increase to the minimum wage, all of which are de-stimulatory compared to business as usual.

During the election campaign, Helen Clark said her focus if re-elected would be “jobs, jobs, jobs” and the new Government has picked up the mantra. But we’ve yet to see any action; any actual net stimulus to create jobs. It would be straining optimism to the point of foolishness to expect anything out of this week’s Jobs Summit but something needs to happen and it needs to happen quickly. While the rest of the world works over-time to protect their economies, we’re sitting on our hands and watching the jobs evaporate.

20 comments on “Being stupid on the economy ”

  1. ieuan 1

    A capital gains tax on property would be very unpopular. A better option to slow down the housing bubble would have been to phase out the tax incentives that exist for negatively geared property.

  2. which also would have been unpopular. but I agree that would also have been an option.

    It’s often forgotten that only 8% of people have investment properties, but they are wealthy baby-boomers, so they punch above their weight politically. Both Labour and Natioanl too desperate to get their votes.

  3. Rich 3

    How many property investors would every contemplate voting Labour? 0.1%?

    If Labour had brought in housing market deflation measures in ’06, they’d probably have lost the election, but that happened anyway. They might have even done better if National voters had been flushed out of the country.

  4. djp 4

    Steve: Where does the govt get its money to “create” jobs?

    If it takes money from the productive to create jobs for the unproductive then our economy as a whole will be less productive.

    “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”

    It is also amusing to note that you give Labour credit for strong growth in 1999 to 2007.. do they get any credit for 2008 and beyond?

  5. djp. I didn’t give Labour credit, I said they had a minor positive effect – the underlying causes of the long period of growth are far bigger than New Zealand and economic policy, it comes down to demographics. And I know you’re desperate to blame Labour for the recession but you’re dreaming the ideologue’s dream.

    The Government can raise revenue by borrowing at low sovereign rates or by raising government income. Everyone else is borrowing and we can afford to do some borrowing too, if we spend the moeny wisely, we’ll create a better economy in the end to pay off the debt, rather than just sitting on our hands while things get worse.

    I love the ‘it ain’t real’ quote marks you put around ‘create’, you better rush off and tell every economist in the world that they’ve got it wrong.

  6. “If it takes money from the productive to create jobs for the unproductive then our economy as a whole will be less productive.”

    This is such a poor piece of reasoning I’m not going to deal with it but I quote it merely so others can gaze on it and think ‘there but for the grace of God go I’

  7. Matthew Pilott 7

    How many property investors would every contemplate voting Labour? 0.1%?

    Rich, you have missed the latest talking points. Landlords are not wealthy people, they’re just ordinary people trying to get by. At least that was the angle when we were all talking about tenant v landlord legal contracts.

    Now that we’re talking about something else, they’re all ‘property developers’?

    Umm… and you do realise that property developers err…develop… property and sell it, don’t you?

  8. Pascal's bookie 8

    Steve, you forget that ‘productive’ and ‘unproductive’ are permanent states. They are things inherent to a person. People are either leeches or randian supermen (even if they are womenz!).

    A equals A’ etc ad funking nauseum.

    When you forget this you run the risk that the productive will get sick of the society that has enabled their productivity, and run off and form a glorious new society where they can all sit around being fabulously wealthy together, swapping real estate, doing each others hair, having sex on beds of banknotes and sneering at how much the rest of miss us them. It’s all right there in the bibble. Atlas Shags.

    To which I can only say, please. No one’s a stopping ya.

  9. Matthew Pilott 9

    PB – hilarious…

  10. ropata 10

    My friends were burned by artificially inflated house prices, they bought a cheap place with a “welcome home” loan for $200K. I reckon its true value in the current market is $150K. They only have an average income with 2 kids and mum only working part time. They are stuck with a 30 year mortgage based on the faulty assumption that house prices would inflate for eternity and they could sell at any time. The speculation and greed and property mania would have been GREATLY reduced by removal of the sacred property tax advantages. NZ governments need “the guts to do what’s right” for those disadvantaged by a heavily tilted playing field.

  11. Around 50 million jobs have evaporated globally in the last year.
    In the US over half a million jobs disappear every month at the moment.
    Over 10.000 people a day go into foreclosure every day.

    To think that NZ can get by with minor job creation projects is laughable.

    As to the fairytale that NZ went to a little recession followed up by the global tsunami is even more ridiculous. the first signs of recession in NZ where directly related to the global collapse we are now witnessing. Just because most Kiwi’s where not aware of it happening doesn’t mean it didn’t.

    The global economy started to tip over in early 2007 and showed in New Zealand in the rise of the dollar against the US dollar as speculators used their money in the NZ dollar and the Iceland dollar to make quick profits while the economy started to tank. That made export more difficult putting the breaks on the NZ economy.

    You guys perhaps don’t remember a wood mill going under as the result of the strength of the NZ dollar and the downturn of building projects being commissioned in the US but it went down in 2007 and it was one of the first victims of the US collapse.

    This is a quote from John Key’s speech at the APEC top about cheap foreign credit flooding New Zealand in the last 10-15 years:

    Over the past decade or so the global economy was fuelled by a private sector credit boom (Banks of course are private sector) made possible by a combination of large macroeconomic imbalances with and between economies, relatively low global inflation, new waves of financial innovation, and huge amounts of leveraging by hedge-funds and other financial institutions.

    Macro economic imbalances is John Key’s speciality of course. It’s called gabling with currencies and manipulating the imbalances between them to make loads of money. Not only that, according to this interview John Key was running the department responsible for all these flashy new financial instruments and Merrill Lynch was one of the first to see the importance of big secretive hedgefund manipulations of which John Key was well aware

    (Key explains: “I had a whole lot of people working for me who were at the cutting edge of delivering quite complex and new and innovative products. They tended to either be a new product or into a new market, usually the emerging markets, Russia, Brazil, Argentina. I wasn’t the guy sitting there dreaming it all up, but I was the guy who was responsible for those people.” Did he foresee the problems which resulted in the sub-prime crisis? “Was it hard to predict? Not really.”)

    according to this interview.

    Next he goes on saying:

    Again, New Zealand’s case is illustrative. We have in recent years experienced a housing market boom built on easy credit. (Not on increased population, decrease of housing or increase of wages, the normal real world economic parameters which control the value of a scarce resource but cheap money, at least that what our golden boy himself says)

    For well over a decade a glut of global credit created an illusion of almost limitless liquidity that in turn fuelled an unsustainable credit boom. This capital was mainly sourced from offshore.(I rest my case, Our golden boy knew full well what was fuelling our unsustainable house prices)

    The result of these seemingly unlimited foreign-capital flows was that New Zealanders were able to rely on cheap fixed-rate debt, which in turn drove house prices ever higher.

    This is an interesting remark of course. John Key was working in Wall street where all cheap credit originates from and his bank was one of three collapsing as a result of it’s irresponsible gambling in derivatives. Oh, oops the same derivatives trade John Key ran for Merrill Lynch.

    And here is another one:

    While the Reserve Bank worked hard to lean against these trends, the credit glut weighed against our Reserve Bank’s power to contain demand through monetary policy adjustments.

    Many of you will have had similar experiences. As a result, governments and central banks around the world are turning their minds to what they can do to prevent, or at least alleviate, such soaring booms, and their resulting busts, in the future.

    So while the Reserve bank tried to stop the totally out of control and not based on real increases in value housing boom John Key and his mates happilly flooded the market with cheap money, bubbling away and this is what John Key ends with:

    So now the party is over and the taxpayers of the world are left to underwrite – in one form or another – the liabilities and obligations of banks and, by extension, their hedge-fund clientele.

    For those of you interested in more of his thoughtful gems here is the whole speech

  12. Sorry, about the length of the previous comment.

    I just get so angry when John Key spells his role in and knowledge about the pending disaster out and nobody of our esteemed fourth estate has the gumption to ask the man some serious questions.

    Someone please just please let me at him.

  13. Pat 13

    John Key must be the worlds greatest ever evil mastermind if he can single-handedly set in motion the downfall of the global financial system some 6 or 7 years in advance, then hide away in a small country’s political system waiting to seize power when his plans come to fruition.

    His fall down the stairs and clumsy dancing with Tras-sexuals was all designed to mask his evil cunning.

    Maybe his arm wasn’t even broken at all.

  14. djp 14

    Steve:


    The Government can raise revenue by borrowing at low sovereign rates or by raising government income. Everyone else is borrowing and we can afford to do some borrowing too, if we spend the moeny wisely, we’ll create a better economy in the end to pay off the debt, rather than just sitting on our hands while things get worse.

    So we are facing govt debt of 30+ percent of GDP or something right.. so the solution is to borrow more to get out of debt?


    I love the ‘it ain’t real’ quote marks you put around ‘create’, you better rush off and tell every economist in the world that they’ve got it wrong.

    Yeah I love it too :), why dont you appeal to logic instead of authority? For every job the the govt “creates” they take a job away from some other sector. Somebody has to pay the bill for that new job, and that somebody now cannot fund a job that would actually have benefited him.


    “If it takes money from the productive to create jobs for the unproductive then our economy as a whole will be less productive.’

    This is such a poor piece of reasoning I’m not going to deal with it but I quote it merely so others can gaze on it and think ‘there but for the grace of God go I’

    If you do that too often I might start to suspect you are dodging the point… if it is totally stupid then you ought to be able to point holes in my logic easy enough, come on!

  15. Pat,

    I make no such suggestion. John Key did not set the global collapse in motion. He was however very much part of the investment banker class that did. IAs the quotes from some of his speeches and interviews show but I understand that this is a little to much for your little Kiwi brains nor used to actually having to think about the fact that we are part of the rest of the world but perhaps a little education would help.

    Why don’t you read these very interesting articles on the history of the New York Federal Reserve from 1987 and their nice little policies that made the coming collapse possible.

    The only way NZ will be able to deal with what’s coming is either Nationalise our money supply (I.e. print it ourselves) and our resources or sell our country to the highest bidder, i.e. the international financial predators. You decide what is likely to happen.

    What you reckon Pat? Will John Key stand for NZ or will he happily sell us to the highest bidder?

  16. Quoth the Raven 16

    As Nobel prize winning economist Paul Krugman said recently, in relation to the Employee Free Choice Act in the the US, there is a way to stimulate the economy without spending any of the taxpayers money, but obviously right wingers would never consider it and would wish to do the complete opposite, merely because they hate free markets so much. What is it? Strengthen the unions. New Zealand could do this simply by removing the regulations that fetter unions.

  17. @ work 17

    C’mon Steve sort your act out, haven’t you heard, the ghost of Roger Douglas is handing out a chocolate fish for every time you can write “Decade of Deficits” on your blog, for the whole rest of JK’s first 100 days!

  18. vto 18

    QtR, such as what particular regs … ?

    Curious, as labour is in many ways a form of capital and should be able to move as a free market item like any other. According to particular doctrine..

  19. RedLogix 19

    the real solution would have been to try to deflate the housing bubble and the accompanying wealth effect early and slowly with a capital gains tax on second homes but neither National nor Labour would go there.

    I do have a genuine question. Can anyone actually define for me exactly what they have in mind when they say ‘Capital Gains Tax’? It’s a fair ask.

  20. Quoth the Raven 20

    vto – There are numerous bits of regulation on forming a union, striking, bargaining &c. Much of it could go, some of it seems reasonable, but you could question the need for it after all a contract is a contract. Of course the situation isn’t nearly as bad here as it is in the US.

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    More Than A FeildingBy David Slack
    3 days ago
  • This smells
    RNZ has continued its look at the role of lobbyists by taking a closer look at the Prime Minister's Chief of Staff Andrew Kirton. He used to work for liquor companies, opposing (among other things) a container refund scheme which would have required them to take responsibility for their own ...
    No Right TurnBy Idiot/Savant
    3 days ago
  • Major issues on the table in Mahuta’s  talks in Beijing with China’s new Foreign Minister
    Foreign Minister Nanaia Mahuta has left for Beijing for the first ministerial visit to China since 2019. Mahuta is  to  meet China’s new foreign minister Qin Gang  where she  might have to call on all the  diplomatic skills  at  her  command. Almost certainly she  will  face  questions  on what  role ...
    Point of OrderBy tutere44
    3 days ago
  • Inside TOP's Teal Card and political strategy
    TL;DR: The Opportunities Party’s Leader Raf Manji is hopeful the party’s new Teal Card, a type of Gold card for under 30s, will be popular with students, and not just in his Ilam electorate where students make up more than a quarter of the voters and where Manji is confident ...
    The KakaBy Bernard Hickey
    3 days ago
  • Make Your Empties Go Another Round.
    When I was a kid New Zealand was actually pretty green. We didn’t really have plastic. The fruit and veges came in a cardboard box, the meat was wrapped in paper, milk came in a glass bottle, and even rubbish sacks were made of paper. Today if you sit down ...
    Nick’s KōreroBy Nick Rockel
    3 days ago
  • Gordon Campbell on how similar Vladimir Putin is to George W. Bush
    Looking back through the names of our Police Ministers down the years, the job has either been done by once or future party Bigfoots – Syd Holland, Richard Prebble, Juduth Collins, Chris Hipkins – or by far lesser lights like Keith Allen, Frank Gill, Ben Couch, Allen McCready, Clem Simich, ...
    3 days ago
  • CHRIS TROTTER:  Te Pāti Māori’s uncompromising threat to the status quo
    Chris Trotter writes – The Crown is a fickle friend. Any political movement deemed to be colourful but inconsequential is generally permitted to go about its business unmolested. The Crown’s media, RNZ and TVNZ, may even “celebrate” its existence (presumably as proof of Democracy’s broad-minded acceptance of diversity). ...
    Point of OrderBy poonzteam5443
    3 days ago
  • Bryce Edwards: Shining a bright light on lobbyists in politics
    Four out of the five people who have held the top role of Prime Minister’s Chief of Staff since 2017 have been lobbyists. That’s a fact that should worry anyone who believes vested interests shouldn’t have a place at the centre of decision making. Chris Hipkins’ newly appointed Chief of ...
    Democracy ProjectBy bryce.edwards
    3 days ago
  • Auckland Council Draft Budget – an unnecessary backwards step
    Feedback on Auckland Council’s draft 2023/24 budget closes on March 28th. You can read the consultation document here, and provide feedback here. Auckland Council is currently consulting on what is one of its most important ever Annual Plans – the ‘budget’ of what it will spend money on between July ...
    3 days ago
  • Talking’ Posey Parker Blues
    by Molten Moira from Motueka If you want to be a woman let me tell you what to do Get a piece of paper and a biro tooWrite down your new identification And boom! You’re now a woman of this nationSpelled W O M A Na real trans woman that isAs opposed ...
    RedlineBy Admin
    4 days ago
  • More Māori words make it into the OED, and polytech boss (with rules on words like “students”) ...
    Buzz from the Beehive   New Zealand Education Minister Jan Tinetti is hosting the inaugural Conference of Pacific Education Ministers for three days from today, welcoming Education Ministers and senior officials from 18 Pacific Island countries and territories, and from Australia. Here’s hoping they have brought translators with them – or ...
    Point of OrderBy Bob Edlin
    4 days ago
  • Social intercourse with haters and Nazis: an etiquette guide
    Let’s say you’ve come all the way from His Majesty’s United Kingdom to share with the folk of Australia and New Zealand your antipathy towards certain other human beings. And let’s say you call yourself a women’s rights activist.And let’s say 99 out of 100 people who listen to you ...
    More Than A FeildingBy David Slack
    4 days ago
  • The Greens, Labour, and coalition enforcement
    James Shaw gave the Green party's annual "state of the planet" address over the weekend, in which he expressed frustration with Labour for not doing enough on climate change. His solution is to elect more Green MPs, so they have more power within any government arrangement, and can hold Labour ...
    No Right TurnBy Idiot/Savant
    4 days ago
  • This sounds familiar…
    RNZ this morning has the first story another investigative series by Guyon Espiner, this time into political lobbying. The first story focuses on lobbying by government agencies, specifically transpower, Pharmac, and assorted universities, and how they use lobbyists to manipulate public opinion and gather intelligence on the Ministers who oversee ...
    No Right TurnBy Idiot/Savant
    4 days ago
  • Letter to the NZ Herald: NCEA pseudoscience – “Mauri is present in all matter”
    Nick Matzke writes –   Dear NZ Herald, I am a Senior Lecturer in the School of Biological Sciences at the University of Auckland. I teach evolutionary biology, but I also have long experience in science education and (especially) political attempts to insert pseudoscience into science curricula in ...
    Point of OrderBy poonzteam5443
    4 days ago
  • So what would be the point of a Green vote again?
    James Shaw has again said the Greens would be better ‘in the tent’ with Labour than out, despite Labour’s policy bonfire last week torching much of what the Government was doing to reduce emissions. File Photo: Lynn Grieveson/Getty ImagesTL;DR: The Green Party has never been more popular than in some ...
    The KakaBy Bernard Hickey
    4 days ago
  • Gas stoves pose health risks. Are gas furnaces and other appliances safe to use?
    This is a re-post from Yale Climate Connections by Sarah Wesseler Poor air quality is a long-standing problem in Los Angeles, where the first major outbreak of smog during World War II was so intense that some residents thought the city had been attacked by chemical weapons. Cars were eventually discovered ...
    4 days ago
  • Genetic Heritage and Co Governance
    Yesterday I was reading an excellent newsletter from David Slack, and I started writing a comment “Sounds like some excellent genetic heritage…” and then I stopped.There was something about the phrase genetic heritage that stopped me in tracks. Is that a phrase I want to be saying? It’s kind of ...
    Nick’s KōreroBy Nick Rockel
    4 days ago
  • BRIAN EASTON: Radical Uncertainty
    Brian Easton writes – Two senior economists challenge some of the foundations of current economics. It is easy to criticise economic science by misrepresenting it, by selective quotations, and by ignoring that it progresses, like all sciences, by improving and abandoning old theories. The critics may go ...
    Point of OrderBy poonzteam5443
    4 days ago
  • Geoffrey Miller: New Zealand’s Middle East strategy, 20 years after the Iraq War
    This week marks the twentieth anniversary of the Iraq War. While it strongly opposed the US-led invasion, New Zealand’s then Labour-led government led by Prime Minister Helen Clark did deploy military engineers to try to help rebuild Iraq in mid-2003. With violence soaring, their 12-month deployment ended without being renewed ...
    Democracy ProjectBy Geoffrey Miller
    4 days ago
  • The motorways are finished
    After seventy years, Auckland’s motorway network is finally finished. In July 1953 the first section of motorway in Auckland was opened between Ellerslie-Panmure Highway and Mt Wellington Highway. The final stage opens to traffic this week with the completion of the motorway part of the Northern Corridor Improvements project. Aucklanders ...
    4 days ago
  • Kicking National’s tyres
    National’s appointment of Todd McClay as Agriculture spokesperson clearly signals that the party is in trouble with the farming vote. McClay was not an obvious choice, but he does have a record as a political scrapper. The party needs that because sources say it has been shedding farming votes ...
    PolitikBy Richard Harman
    5 days ago
  • As long as there is cricket, the world is somehow okay.
    Rays of white light come flooding into my lounge, into my face from over the top of my neighbour’s hedge. I have to look away as the window of the conservatory is awash in light, as if you were driving towards the sun after a rain shower and suddenly blinded. ...
    Nick’s KōreroBy Nick Rockel
    5 days ago
  • So much of what was there remains
    The columnists in Private Eye take pen names, so I have not the least idea who any of them are. But I greatly appreciate their expert insight, especially MD, who writes the medical column, offering informed and often damning critique of the UK health system and the politicians who keep ...
    More Than A FeildingBy David Slack
    6 days ago
  • 2023 SkS Weekly Climate Change & Global Warming News Roundup #11
    A chronological listing of news articles posted on the Skeptical Science Facebook Page during the past week: Sun, Mar 12, 2023 thru Sat, Mar 18, 2023. Story of the Week Guest post: What 13,500 citations reveal about the IPCC’s climate science report   IPCC WG1 AR6 SPM Report Cover - Changing ...
    6 days ago
  • Financial capability services are being bucked up, but Stuart Nash shouldn’t have to see if they c...
    Buzz from the Beehive  The building of financial capability was brought into our considerations when Social Development and Employment Minister Carmel Sepuloni announced she had dipped into the government’s coffers for $3 million for “providers” to help people and families access community-based Building Financial Capability services. That wording suggests some ...
    Point of OrderBy Bob Edlin
    6 days ago
  • Things that make you go Hmmmm.
    Do you ever come across something that makes you go Hmmmm?You mean like the song?No, I wasn’t thinking of the song, but I am now - thanks for that. I was thinking of things you read or hear that make you stop and go Hmmmm.Yeah, I know what you mean, ...
    Nick’s KōreroBy Nick Rockel
    6 days ago
  • The hoon for the week that was to March 19
    By the end of the week, the dramas over Stuart Nash overshadowed Hipkins’ policy bonfire. File photo: Lynn GrieveasonTLDR: This week’s news in geopolitics and the political economy covered on The Kākā included:PM Chris Hipkins’ announcement of the rest of a policy bonfire to save a combined $1.7 billion, but ...
    The KakaBy Peter Bale
    6 days ago
  • Saving Stuart Nash: Explaining Chris Hipkins' unexpected political calculation
    When word went out that Prime Minister Chris Hipkins would be making an announcement about Stuart Nash on the tiles at parliament at 2:45pm yesterday, the assumption was that it was over. That we had reached tipping point for Nash’s time as minister. But by 3pm - when, coincidentally, the ...
    PunditBy Tim Watkin
    7 days ago
  • Radical Uncertainty
    Two senior economists challenge some of the foundations of current economics. It is easy to criticise economic science by misrepresenting it, by selective quotations, and by ignoring that it progresses, like all sciences, by improving and abandoning old theories. The critics may go on to attack physics by citing Newton.So ...
    PunditBy Brian Easton
    1 week ago
  • Jump onto the weekly hoon on Riverside at 5pm
    Photo by Walker Fenton on UnsplashIt’s that time of the week again when and I co-host our ‘hoon’ webinar with paying subscribers to The Kaka for an hour at 5 pm. Jump on this link on Riverside (we’ve moved from Zoom) for our chat about the week’s news with ...
    The KakaBy Bernard Hickey
    1 week ago
  • The Dream of Florian Neame: Accepted
    In a nice bit of news, my 2550-word deindustrial science-fiction piece, The Dream of Florian Neame, has been accepted for publication at New Maps Magazine (https://www.new-maps.com/). I have published there before, of course, with Of Tin and Tintagel coming out last year. While I still await the ...
    1 week ago
  • Snakes and leaders
    And so this is Friday, and what have we learned?It was a week with all the usual luggage: minister brags and then he quits, Hollywood red carpet is full of twits. And all the while, hanging over the trivial stuff: existential dread, and portents of doom.Depending on who you read ...
    More Than A FeildingBy David Slack
    1 week ago
  • This station is Karanga-a-Hape, Chur!
    When I changed the name of this newsletter from The Daily Read to Nick’s Kōrero I was a bit worried whether people would know what Kōrero meant or not. I added a definition when I announced the change and kind of assumed people who weren’t familiar with it would get ...
    Nick’s KōreroBy Nick Rockel
    1 week ago
  • Greens don’t shy from promoting a candidate’s queerness but are quiet about govt announcement on...
    There was a time when a political party’s publicity people would counsel against promoting a candidate as queer. No matter which of two dictionary meanings the voting public might choose to apply – the old meaning of odd, strange, weird, or aberrant, or the more recent meaning of gay, homosexual ...
    Point of OrderBy Bob Edlin
    1 week ago
  • Ask Me Anything about the week to March 17
    Photo by Joakim Honkasalo on UnsplashIt’s that time of the week for an ‘Ask Me Anything’ session for paying subscribers about the week that was for the next hour, including:PM Chris Hipkins announcement of the rest of a policy bonfire to save a combined $1.7 billion, but which blew up ...
    The KakaBy Bernard Hickey
    1 week ago
  • Slow consenting could create $16b climate liability by 2050
    Even though concern over the climate change threat is becoming more mainstream, our governments continue to opt out of the difficult decisions at the expense of time, and cost for future generations. Photo: Lynn Grieveson/Getty ImagesTLDR: Now we have a climate liability number to measure the potential failure of the ...
    The KakaBy Bernard Hickey
    1 week ago
  • THOMAS CRANMER: Challenging progressivism in New Zealand’s culture wars
    Thomas Cranmer writes  Like it or not, the culture wars have entered New Zealand politics and look set to broaden and intensify. The culture wars are often viewed as an exclusively American phenomenon, but the reality is that they are becoming increasingly prominent in countries around the world, ...
    Point of OrderBy Bob Edlin
    1 week ago
  • Gordon Campbell on firing Stuart Nash, plus a music playlist
    Here’s an analogy for the Stuart Nash saga. If people are to be forgiven for their sins, Catholic dogma requires two factors to be present. There has to be a sincere act of confession about what has been done, but also a sincere act of contrition, which signals a painful ...
    1 week ago

  • District Court Judges appointed
    Attorney-General David Parker has announced the appointment of Christopher John Dellabarca of Wellington, Dr Katie Jane Elkin of Wellington, Caroline Mary Hickman of Napier, Ngaroma Tahana of Rotorua, Tania Rose Williams Blyth of Hamilton and Nicola Jan Wills of Wellington as District Court Judges.  Chris Dellabarca Mr Dellabarca commenced his ...
    BeehiveBy beehive.govt.nz
    5 hours ago
  • New project set to supercharge ocean economy in Nelson Tasman
    A new Government-backed project will help ocean-related businesses in the Nelson Tasman region to accelerate their growth and boost jobs. “The Nelson Tasman region is home to more than 400 blue economy businesses, accounting for more than 30 percent of New Zealand’s economic activity in fishing, aquaculture, and seafood processing,” ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • National’s education policy: where’s the funding?
    After three years of COVID-19 disruptions schools are finally settling down and National want to throw that all in the air with major disruption to learning and underinvestment.  “National’s education policy lacks the very thing teachers, parents and students need after a tough couple of years, certainty and stability,” Education ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Free programme to help older entrepreneurs and inventors
    People aged over 50 with innovative business ideas will now be able to receive support to advance their ideas to the next stage of development, Minister for Seniors Ginny Andersen said today. “Seniors have some great entrepreneurial ideas, and this programme will give them the support to take that next ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Government target increased to keep powering up the Māori economy
    A cross government target for relevant government procurement contracts for goods and services to be awarded to Māori businesses annually will increase to 8%, after the initial 5% target was exceeded. The progressive procurement policy was introduced in 2020 to increase supplier diversity, starting with Māori businesses, for the estimated ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Continued progress on reducing poverty in challenging times
    77,000 fewer children living in low income households on the after-housing-costs primary measure since Labour took office Eight of the nine child poverty measures have seen a statistically significant reduction since 2018. All nine have reduced 28,700 fewer children experiencing material hardship since 2018 Measures taken by the Government during ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Speech at Fiji Investment and Trade Business Forum
    Deputy Prime Minister Kamikamica; distinguished guests, ladies and gentlemen. Tēnā koutou katoa, ni sa bula vinaka saka, namaste. Deputy Prime Minister, a very warm welcome to Aotearoa. I trust you have been enjoying your time here and thank you for joining us here today. To all delegates who have travelled to be ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Government investments boost and diversify local economies in lower South Island
    $2.9 million convertible loan for Scapegrace Distillery to meet growing national and international demand $4.5m underwrite to support Silverlight Studios’ project to establish a film studio in Wanaka Gore’s James Cumming Community Centre and Library to be official opened tomorrow with support of $3m from the COVID-19 Response and Recovery ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Government future-proofs EV charging
    Transport Minister Michael Wood has today launched the first national EV (electric vehicle) charging strategy, Charging Our Future, which includes plans to provide EV charging stations in almost every town in New Zealand. “Our vision is for Aotearoa New Zealand to have world-class EV charging infrastructure that is accessible, affordable, ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • World-leading family harm prevention campaign supports young NZers
    Associate Minister for Social Development and Employment Priyanca Radhakrishnan has today launched the Love Better campaign in a world-leading approach to family harm prevention. Love Better will initially support young people through their experience of break-ups, developing positive and life-long attitudes to dealing with hurt. “Over 1,200 young kiwis told ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • First Chief Clinical Advisor welcomed into Coroners Court
    Hon Rino Tirikatene, Minister for Courts, welcomes the Ministry of Justice’s appointment of Dr Garry Clearwater as New Zealand’s first Chief Clinical Advisor working with the Coroners Court. “This appointment is significant for the Coroners Court and New Zealand’s wider coronial system.” Minister Tirikatene said. Through Budget 2022, the Government ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Next steps for affected properties post Cyclone and floods
    The Government via the Cyclone Taskforce is working with local government and insurance companies to build a picture of high-risk areas following Cyclone Gabrielle and January floods. “The Taskforce, led by Sir Brian Roche, has been working with insurance companies to undertake an assessment of high-risk areas so we can ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • New appointment to Māori Land Court bench
    E te huia kaimanawa, ko Ngāpuhi e whakahari ana i tau aupikinga ki te tihi o te maunga. Ko te Ao Māori hoki e whakanui ana i a koe te whakaihu waka o te reo Māori i roto i te Ao Ture. (To the prized treasure, it is Ngāpuhi who ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Government focus on jobs sees record number of New Zealanders move from Benefits into work
    113,400 exits into work in the year to June 2022 Young people are moving off Benefit faster than after the Global Financial Crisis Two reports released today by the Ministry of Social Development show the Government’s investment in the COVID-19 response helped drive record numbers of people off Benefits and ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Vertical farming partnership has upward momentum
    The Government’s priority to keep New Zealand at the cutting edge of food production and lift our sustainability credentials continues by backing the next steps of a hi-tech vertical farming venture that uses up to 95 per cent less water, is climate resilient, and pesticide-free. Agriculture Minister Damien O’Connor visited ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Conference of Pacific Education Ministers – Keynote Address
    E nga mana, e nga iwi, e nga reo, e nga hau e wha, tena koutou, tena koutou, tena koutou kātoa. Warm Pacific greetings to all. It is an honour to host the inaugural Conference of Pacific Education Ministers here in Tāmaki Makaurau. Aotearoa is delighted to be hosting you ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • New $13m renal unit supports Taranaki patients
    The new renal unit at Taranaki Base Hospital has been officially opened by the Minister of Health Dr Ayesha Verrall this afternoon. Te Huhi Raupō received around $13 million in government funding as part of Project Maunga Stage 2, the redevelopment of the Taranaki Base Hospital campus. “It’s an honour ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Second Poseidon aircraft on home soil
    Defence Minister Andrew Little has marked the arrival of the country’s second P-8A Poseidon aircraft alongside personnel at the Royal New Zealand Air Force’s Base at Ohakea today. “With two of the four P-8A Poseidons now on home soil this marks another significant milestone in the Government’s historic investment in ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Further humanitarian aid for Türkiye and Syria
    Aotearoa New Zealand will provide further humanitarian support to those seriously affected by last month’s deadly earthquakes in Türkiye and Syria, says Foreign Minister Nanaia Mahuta. “The 6 February earthquakes have had devastating consequences, with almost 18 million people affected. More than 53,000 people have died and tens of thousands more ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Community voice to help shape immigration policy
    Migrant communities across New Zealand are represented in the new Migrant Community Reference Group that will help shape immigration policy going forward, Immigration Minister Michael Wood announced today.  “Since becoming Minister, a reoccurring message I have heard from migrants is the feeling their voice has often been missing around policy ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • State Highway 3 project to deliver safer journeys, better travel connections for Taranaki
    Construction has begun on major works that will deliver significant safety improvements on State Highway 3 from Waitara to Bell Block, Associate Minister of Transport Kiri Allan announced today. “This is an important route for communities, freight and visitors to Taranaki but too many people have lost their lives or ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Ginny Andersen appointed as Minister of Police
    Prime Minister Chris Hipkins has today appointed Ginny Andersen as Minister of Police. “Ginny Andersen has a strong and relevant background in this important portfolio,” Chris Hipkins said. “Ginny Andersen worked for the Police as a non-sworn staff member for around 10 years and has more recently been chair of ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Government confirms vital roading reconnections
    Six further bailey bridge sites confirmed Four additional bridge sites under consideration 91 per cent of damaged state highways reopened Recovery Dashboards for impacted regions released The Government has responded quickly to restore lifeline routes after Cyclone Gabrielle and can today confirm that an additional six bailey bridges will ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Foreign Minister Mahuta to meet with China’s new Foreign Minister
    Foreign Minister Nanaia Mahuta departs for China tomorrow, where she will meet with her counterpart, State Councillor and Foreign Minister Qin Gang, in Beijing. This will be the first visit by a New Zealand Minister to China since 2019, and follows the easing of COVID-19 travel restrictions between New Zealand and China. ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Education Ministers from across the Pacific gather in Aotearoa
    Education Ministers from across the Pacific will gather in Tāmaki Makaurau this week to share their collective knowledge and strategic vision, for the benefit of ākonga across the region. New Zealand Education Minister Jan Tinetti will host the inaugural Conference of Pacific Education Ministers (CPEM) for three days from today, ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • State Highway 5 reopens between Napier and Taupō following Cyclone Gabrielle
    A vital transport link for communities and local businesses has been restored following Cyclone Gabrielle with the reopening of State Highway 5 (SH5) between Napier and Taupō, Associate Minister of Transport Kiri Allan says. SH5 reopened to all traffic between 7am and 7pm from today, with closure points at SH2 (Kaimata ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Special Lotto draw raises $11.7 million for Cyclone Gabrielle recovery
    Internal Affairs Minister Barbara Edmonds has thanked generous New Zealanders who took part in the special Lotto draw for communities affected by Cyclone Gabrielle. Held on Saturday night, the draw raised $11.7 million with half of all ticket sales going towards recovery efforts. “In a time of need, New Zealanders ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Government delivers a $3 million funding boost for Building Financial Capability services
    The Government has announced funding of $3 million for providers to help people, and whānau access community-based Building Financial Capability services. “Demand for Financial Capability Services is growing as people face cost of living pressures. Those pressures are increasing further in areas affected by flooding and Cyclone Gabrielle,” Minister for ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Education New Zealand | Manapou ki te Ao – new Chair and member
    Minister of Education, Hon Jan Tinetti, has announced appointments to the Board of Education New Zealand | Manapou ki te Ao. Tracey Bridges is joining the Board as the new Chair and Dr Therese Arseneau will be a new member. Current members Dr Linda Sissons CNZM and Daniel Wilson have ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Scholarships honouring Ngarimu VC and the 28th (Māori) Battalion announced
    Fifteen ākonga Māori from across Aotearoa have been awarded the prestigious Ngarimu VC and 28th (Māori) Battalion Memorial Scholarships and Awards for 2023, Associate Education Minister and Ngarimu Board Chair, Kelvin Davis announced today.  The recipients include doctoral, masters’ and undergraduate students. Three vocational training students and five wharekura students, ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Appointment of Judge of the Court of Appeal and Judge of the High Court
    High Court Judge Jillian Maree Mallon has been appointed a Judge of the Court of Appeal, and District Court Judge Andrew John Becroft QSO has been appointed a Judge of the High Court, Attorney‑General David Parker announced today. Justice Mallon graduated from Otago University in 1988 with an LLB (Hons), and with ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • NZ still well placed to meet global challenges
    The economy has continued to show its resilience despite today’s GDP figures showing a modest decline in the December quarter, leaving the Government well positioned to help New Zealanders face cost of living pressures in a challenging global environment. “The economy had grown strongly in the two quarters before this ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Western Ring Route Complete
    Aucklanders now have more ways to get around as Transport Minister Michael Wood opened the direct State Highway 1 (SH1) to State Highway 18 (SH18) underpass today, marking the completion of the 48-kilometre Western Ring Route (WRR). “The Government is upgrading New Zealand’s transport system to make it safer, more ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Briefings to Incoming Ministers
    This section contains briefings received by incoming ministers following changes to Cabinet in January. Some information may have been withheld in accordance with the Official Information Act 1982. Where information has been withheld that is indicated within the document. ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Teaming up for a stronger, more resilient Fiji
    Aotearoa New Zealand Foreign Affairs Minister Nanaia Mahuta reaffirmed her commitment to working together with the new Government of Fiji on issues of shared importance, including on the prioritisation of climate change and sustainability, at a meeting today, in Nadi. Fiji and Aotearoa New Zealand’s close relationship is underpinned by the Duavata ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Investment in blue highway a lifeline for regional economies and cyclone recovery
    The Government is delivering a coastal shipping lifeline for businesses, residents and the primary sector in the cyclone-stricken regions of Hawkes Bay and Tairāwhiti, Regional Development Minister Kiri Allan announced today. The Rangitata vessel has been chartered for an emergency coastal shipping route between Gisborne and Napier, with potential for ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Next steps developing clean energy for NZ
    The Government will progress to the next stage of the NZ Battery Project, looking at the viability of pumped hydro as well as an alternative, multi-technology approach as part of the Government’s long term-plan to build a resilient, affordable, secure and decarbonised energy system in New Zealand, Energy and Resources ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Statement from the Prime Minister on Stuart Nash
    This morning I was made aware of a media interview in which Minister Stuart Nash criticised a decision of the Court and said he had contacted the Police Commissioner to suggest the Police appeal the decision. The phone call took place in 2021 when he was not the Police Minister. ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • CPTPP Trade Ministers coming to Auckland
    The Government’s sharp focus on trade continues with Aotearoa New Zealand set to host Trade Ministers and delegations from 10 Asia Pacific economies at a meeting of Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) Commission members in July, Minister for Trade and Export Growth Damien O’Connor announced today. “New Zealand ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Govt approves $25 million extension for cyclone-affected businesses
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