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Business claims crisis as country approaches full employment and wages increase

Written By: - Date published: 8:29 am, July 12th, 2022 - 124 comments
Categories: Economy, employment, jobs, uncategorized, unemployment, workers' rights - Tags:

Anyone else getting tired of the media presenting the fact that New Zealand essentially has full employment is a very bad thing?

The country is in a situation it has not been in since the 1970s where it is approaching full employment and the repercussions are totally predictable.  It is harder for employers to fill jobs and the pressure is meaning that wage rates are increasing.

Sounds great doesn’t it.  Everyone has a job and they are earning more.

What could possible be bad about this?

Judging from the extreme positions taken by some in the media lots.

Heather Du Plessis-Allan expressed the thoughts of many small business owners when she said this:

The labour shortage is now so bad that everyone who wants a job has a job. Employers are now stealing workers off each other. For every business that finds a worker, another one loses a worker. It’s a pass the parcel of pain.

It says a lot that ANZ’s CEO Antonia Watson called on the Government to let workers in. She voiced her concern during the PM’s trip to Australia. It apparently went down like a lead balloon with the PM’s office. Watson was supposed to be a cheerleader not a truth talker.

But she’s right. We do “want a more productive economy” but it “will take years and investment” and “in the meantime… people are just crying out for staff”.

The Aussies have realised they need to do both at once: start to invest now in a longer term fix, while importing more crucial skills immediately.

We can’t let this carry on for years while productivity slowly catches up.

We all want Kiwis’ wages to lift. But for them to have wages, they need to have jobs. And for them to have jobs, there need to be thriving businesses creating jobs.

That’s now being prevented by the immigration reset.

Heather’s statement is of course internally contradictory.  We have to increase immigration so that businesses can create more jobs and wages can then increase so that we can counter the current situation where … pretty well everyone has a job and wage rates are increasing.

Heather’s solution will increase unemployment and thanks to market forces drive down wages.  It is weird that right wingers hate market forces when they improve the plight of ordinary workers but are fine with them when they cause misery.

And Heather’s doom and gloom analysis for the country’s economy?  The latest Treasury data where tax revenue is greater and crown spend and debt levels are below what was anticipated would suggest that things are better than Heather is claiming.

This is not an exclusively a New Zealand phenomenon.

And there has been a whole stream of negative comment about how bad it all is.

But here is the thing.  There has been no balance in the presentation of the issue and I am looking at you Radio New Zealand.

For every business owner complaining that their business has been adversely affected they should also interview a worker who now has a greater ability to pay their bills or a family whose children now have better living conditions so their ability to benefit from education has improved.

And these businesses are the very same ones who complained about Covid restrictions affecting their bottom line.  Now that Covid is wide spread and many workers are taking time off to recuperate they are complaining about not having enough workers.  Massive own goal there business owners.

These wall to wall tales of woe without any counter stories of the decency of earning a living wage is class war.

Currently the country is enjoying something that is very good for ordinary people.  The media should present both sides of this story not just tales of woe from employers who in the past have benefited from employing cheap imported labour.

124 comments on “Business claims crisis as country approaches full employment and wages increase ”

  1. Sanctuary 1

    It shouldn't surprise anyone to discover the MSM is basically a servant of capitalism.

    • Patricia Bremner 1.1

      yes Yes Sanctuary, and so Business and MSM "Sing from the same song sheet".

    • Scotty 1.2

      Found this gem in a sea of Nat/Act voters.

      HT, gnx |interest .co 12th Jul 22, 3:13pm

      It’s looking like we not only built an economy around borrowing money to buy each other’s houses….. we built an economy around borrowing people from overseas.

      not the most resilient in hindsight

      I see the EMA and Business NZ is cranking up the advocacy around staff shortages and the need to bring back immigration. At what point do staff start to push back and say where is the training, the career pathways and commitment to local staff.

      And what's the point of working for a company if you can’t buy a house…..the whole thing is a bloody mess.

      At what point do member companies start to ask what has been going on with these organisations to allow this….?

      I read the other day that sealord can’t get staff and will be short a few hundred this season for hoki….and at the end of the article it said they could invest in automation but it would cost $100m and they don’t want to spend the bucks. And there’s your problem….we are just sweating old assets. It’s not really enticing to a new generation of workers who could be more productive.

      and then the ceo of ANZ comes out and parrots the same rubbish and says in the long run we will need to invest in productivity….but it will take time and money…..but hey let’s just get some immigrants quickly and we can go back to bidding up our houses off each other and put off the investment side.

      i know everyone here bags the government but from my experience the business organisations have been corrupted by the banks, corrupted by the National party and have been taking the easy options….they have been ripping their members off and now the chickens are coming home to roost.

      Look at the Chamber as well….what would Simon Bridges know about business ffs? He’s never worked in one, started one or owned one. And now he’s the CEO?

      Kiwis are too naive. Time to start asking some hard questions of where we are heading with all of this.

      • KJT 1.2.1

        Why invest capital in making a business more productive, effeciant or innovative, when you can make money more easily by screwing down staff wages, or even better, simply by hoarding land.

        Low wage economies don't succeed. There is no incentive to ensure staff are well trained and productive.

        A foolish own goal for businesses. Employees are also customers.

        Kicking the "can down the road". "Lets not invest in employees and productivity now, later". The same argument farmers gave against cleaning up rivers and AGW mitigation. It is always too hard, right now.

  2. PsyclingLeft.Always 2

    Nats and croni……SUPPORTERS are well conflicted. Must be a terrible thing to have a Booming Economy..AND Full Employment…under a Labour/Green Govt. Nice.

    • DavidJ 2.1

      That tends to happen when you borrow/print tens of billions of dollars, pump it into the economy, and virtually close the borders. There will be a day of reckoning, it's coming soon and it won't be pretty.

      • joe90 2.1.1

        There will be a day of reckoning, it's coming soon and it won't be pretty.

        Do tell.

        • DavidJ
          1. Inflation is currently running at a shade under 7%. That is the highest in 30 years. This eroding asset values, and the purchasing power of wages and salaries.

          2. In response to the rise in inflation, the RB has been hiking interest rates, which will (further) reduce disposable incomes and suppress economic activity.

          2. According to the ANZ, "The economy is transitioning from domestic demand that was overstimulated (with the benefit of hindsight), to a rapid withdrawal of monetary stimulus in order to tame the inflation beast. "

          3. The economy shrank 0.2% in the March quarter, with real disposable incomes falling 0.5%. The significance is not the result as much as it is that this fall went against prevailing economic predictions. ANZ economist Miles Workman said that Domestic economic momentum was starting to slip. Quote "Interest rates are lifting, house prices are falling, inflation is eroding household incomes, migration is negative, and consumer confidence has tanked,"

          4. The impact of more recent increases will cause further contraction.

          5. Higher interest rates will make put some mortgage lending into an 'at risk' category. Given the substantial climb in house prices over a prolonged period, some mortgage holders will find themselves unable to sustain mortgage payments, leading to mortgagee sales. That part of the property cycle significantly disadvantages lower income/net worth individuals.

          None of this ends well.

          • joe90

            Inflation is currently running at a shade under 7%.

            And Australia is closing in on 6%, the UK, Euro Area, and the US are all running at over 8%. It's what happens during global calamities.

            the RB has been hiking interest rates,

            As is most every other Central bank so hardly unique.

            The economy shrank

            As is every other economy in the world so again, hardly unique.

            The impact of more recent increases will cause further contraction.

            Your reckons don't count.

            Higher interest rates will make put some mortgage lending into an 'at risk' category.

            We've turned property into a commodity and now you're complaining about the greater fools being caught with their pants down. Grow up.

            But I'm sure the sewer pigs would appreciate your 20/20 hindsight whinge about the actions of a government who gave a rats and decided to prioritise the well being of people.

            • PsyclingLeft.Always

              Exactly. Some would have had us with Covid Plan B. And Thousands dead. They can fuck off.

            • DavidJ

              And the countries you're referring to have central banks who made the same mistakes ours did. This is not unique to NZ. It won't end well for them either.

              "We've turned property into a commodity and now you're complaining about the greater fools being caught with their pants down. Grow up."

              Who are these 'greater fools'? Young couples who have clawed their way into a home? Families who have stretched themselves to achieve home ownership to get out of paying the landlords mortgage? As I said, "That part of the property cycle significantly disadvantages lower income/net worth individuals."

            • DavidJ

              Right on cue:

              Tony Alexander: Businesses are going to fail – but who’s to blame?, All things property, under OneRoof

              'None of us truly felt that our central banks would take such an irresponsible attitude towards inflation risks last year. Only in the past few months have central banks admitted they should have started taking away excessively loose monetary conditions last year and now they are playing catch-up and driving an interest rates shock through the world economy."

              "If your business is failing or soon to fail, be aware that it is not all your fault. You have been caught in a maelstrom of factors including the incompetence of our own central bank."

          • KJT

            If you think this is bad, imagine the clusterfuck if National/ACT had been in power during covid.

            But. You don't even have to imagine. Bungling Boris, in the UK, graphically showed us the bullet we dodged, by not having the entitled Tory twits in charge here during covid.

            • DavidJ

              It's not a competition KJT. The reality is we'll never know whether the RB would have behaved any differently under different political circumstances, or how a different set of politicians would have responded. It’s easy to pontificate in opposition, far more difficult to actually make the hard decisions when your in the hot seat.

              • KJT

                We have ample evidence of how NZ's right wing would have responded to COVID, from their own statements. And past actions.

                And we already know their ideas on bringing in as much cheap labour as possible, and keeping wages down.

                You really think they would change their spots.

                A narrow thinking corporate stooge as PM, obligated to the idiots in ACT, will make things much much worse.

                • pat

                  Migration has been apolitical


                  Indeed it peaked just prior to Covid under Labour.

                • DavidJ

                  What statements? I would prefer to look at what other political parties actually did when in government. NZ's response to the 2008 GFC saw NZ have a shallow recession and a solid economic rebound.

                  • KJT

                    In the GFC, Loosened monetary policy, didn't they?

                    The opposite of what you want.

                    However current National MP'are not as pragmatic as Key and English were.

                    “What statements”. Where have you been the last two years?

                    • DavidJ

                      "The opposite of what you want."

                      No, it's not. It's a matter of degrees. Loosening monetary policy is a legitimate policy tool when done properly.

                    • KJT

                      Showing your true colours.

                      "Fine if National does it, but not if Labour does it".

                    • DavidJ

                      ""Fine if National does it, but not if Labour does it"."

                      It's not necessarily political. It can come back to to the actions of the central bank. NZ's central bank have got it wrong, and we'll pay the price.

                    • KJT

                      It is the reserve Bank Act that requires the RBNZ to kill our economy, when it shows signs of revival.

      • PsyclingLeft.Always 2.1.2

        There will be a day of reckoning, it's coming soon and it won't be pretty.

        Riiight. Where have I seen that right wing shite before? Really channelling that Nactional mind aren’t you.

        • DavidJ

          Do you think that a substantial increase in debt, rising inflation and interest rates, and a negative growth rate are good things? I happen to see them as the natural consequence of our central bank running a monetary policy that was too loose. Along with many other central banks.

          • KJT

            We don't have to have rising interest rates.

            That is a consequence of the Neo-liberal abomination the Reserve Bank Act. At least now the reserve Bank has to consider other factors in economic health before they have to apply the wrecking ball.

            Tighter monetary policy during COVID would have caused recession and multiple business failures and unemployment.

            As it will now.

            You are still living in cloud cockoo land, like most of the Deficit Hawks. Ignoring the economic lessons of the last century.

            • DavidJ

              "Tighter monetary policy during COVID would have caused recession and multiple business failures and unemployment."

              Depends what you mean by 'tighter'. There is a balance and we exceeded it, as did many other central banks BTW. That will lead inevitably to an adjustment, how hard will depend on a range of factors, and that 'adjustment' will likely cause recession, business failures and unemployment.

              • KJT

                The results show the balance was not exceeded.

                However the too fast tightening by reserve banks, now, are going to cause an inivitable crash.

                Using demand side solutions to supply side inflation is going to crash the entire world economy. But the banks will do it anyway.

                • DavidJ

                  "The results show the balance was not exceeded."

                  The results show the balance WAS exceeded.


                  • KJT

                    How about finding a more credible source than a internally contradictory word salad, real estate article. From an “economic commentator” whose main conclusion is that he basically doesn’t have a clue what is going to happen. ?

                    Are you saying Labour should have let those businesses fail during covid?

                    Instead of propping them up.

                    Or the reserve bank, and the Government should have completed covid’ s destructive path through the NZ economy, by causing a deep recession.

                    • DavidJ

                      Tony Alexander is a reputable source, even if you don't like what he says.

                      You are seeing this as a binary, when it simply isn’t.

                  • KJT

                    If that incoherent rambling, and opinion without supporting evidence, is your idea of a a "reputable source" then I can see why you have a problem.

                    One of his opinions agree with yours.
                    Doesn’t make either of you right. Then he contradicts himself. If it is all “unpredictable”, then how can anyone, including him, predict the results. Or say what approach was correct.

                    • DavidJ

                      It's not incoherent. He's very clear about what he's saying, and he's not alone in his comments. Former RBNZ Chairman Arthur Grimes warned in late 2020 that "…asset price inflation is taking off. People are using cheap debt to pile into the property market, chasing yield there, as well as in the share market". “It’s a real danger that the Reserve Bank is just destabilising asset prices, which is going to come home and really hurt the economy down the track,” What he said then was right on the money. House prices rose on the back of artificially cheap money, and those with wealth became wealthier.

                      Then in early 2021, Grimes urged the RB to begin to gradually tighten money supply, saying "The RBNZ loosened monetary policy too much through 2020, causing soaring house prices (as well as other asset prices) which is very damaging for disadvantaged New Zealanders and for the next generation."

                      Edit: Here’s an article from Feb 2021 that claims the RBNZ warned the government ‘repeatedly’ about precisely those impacts.

                    • KJT

                      The house price inflation has been occurring for a long time. It even occurred in the 80's despite sky high interest rates.

                      Interest rates were a small part of the drivers of land prices.

                      Both are totally neglecting what would have occurred if monetary policy had been tightened during covid. An inivitable recession and disastrous numbers for business failures and unemployment.

                      As relevent now as it was back then..

                      KJT. Random musings on all sorts of things.: The Reserve Bank, Debt and the Property Market (kjt-kt.blogspot.com) "Now, every time the New Zealand productive economy struggles off its knees, the reserve bank delivers another knockout".

                      Then there is the question of how effective interest rate rises will be in curbing inflation, which is almost entirely driven from outside NZ.

                    • pat

                      Interest rates are but one tool….credit availability and for what purpose, tax incentives and regulation are others….as stated earlier the 3 arms have to coordinate…..and they have (in the main) for the past (roughly) 3 decades.

                      Real estate inflation has run well ahead of general inflation over that period hence the increasingly stretched ratio to median incomes since the 1980s

                    • DavidJ

                      "Both are totally neglecting what would have occurred if monetary policy had been tightened during covid. An inivitable recession and disastrous numbers for business failures and unemployment."

                      Again, you're seeing this only as a binary. The tap is not simply either on or off. The flow can be controlled. The alternative is what we're seeing now, a sharp rise in interest rates that will hit the people who can least afford it the hardest.

                  • DavidJ

                    "Interest rates are but one tool….credit availability and for what purpose,"

                    That's a great point, Pat. For what purpose. IMHO business assistance should have been in the from of grants that were then assessed at a later time to establish whether or not they had been a) required and b) applied to maintaining jobs. If not, the grants should have crystallised into loans that were repayable. To be fair, the government had some tough decisions to make, and often were making those decisions in an information vacuum (not of their own making).

  3. James Simpson 3

    a worker who now has a greater ability to pay their bills or a family whose children now have better living conditions so their ability to benefit from education has improved

    Do you have any evidence to show that is correct?

    Any modest wage increases have been more than eaten up with fueling the car to get to work and paying for the groceries.

    • Puckish Rogue 3.1

      If we ignore it then maybe it will go away

      • James Simpson 3.1.1

        It just to seems to be devoid of all reality.

        Due to the imported inflation, there is no one who has a greater ability to pay their bills now than they did 2 years ago.

        • Puckish Rogue

          They know this, they just want power more than they want to help the people that vote for them.

        • Stuart Munro

          Not quite true – those who've been able to return to full-time work now that the market is not altogether saturated with migrants, though hardly rolling in it, have at least got out from under the Umbridge types at Winz – a huge improvement in quality of life.

        • mickysavage

          Que? When wages go up workers ability to pay their bills increase. Some other event may mean that their ability to pay their bills decreases but this does not affect the beneficial effect of them receiving a wage increase.

        • KJT

          If National/ACT were in power.

          We would still have the imported inflation.

          With pay cuts, and another 300 000 imported workers filling up the jobs.

    • Patricia Bremner 3.2

      That is pure exaggeration.

      The difference between being on unemployed money,( in the face of competing overseas cheap labour), and being fully employed in a climate of increasing wages would need inflation to be in the order of 30% not 6.9%. to make those families as badly off as you point out.

      This kind of misleading hyperbole is common. Further the Government is compensating the most affected with a payment in August. Granted Benefits should automatically rise to cover inflation, but the reverse happened under National. Every one on a benefit except pensioners, was hit by Paula's cuts.

      No one in National seems to have tied huge corporate and bank mortgage profits plus landlords' higher rentals as drivers of inflation…. "No no! It must energy costs workers wages or the Government's Health strategy.

      Like kids with jam all over their faces they cry "Not me !! I didn't do it It's them!.

      Just look at their profits!! Huge!! They used the Government assistance to enrich themselves, complaining all the way.
      Never waste a crisis.!!

      • Patricia Bremner 3.2.1

        I got called away and missed putting. These huge profits should provide room for training retention payments and innovation costs. … Waiting!!devil

      • RedLogix 3.2.2

        landlords' higher rentals as drivers of inflation

        Just a good moment to point out that for many landlords fixed costs are rising too – rates, insurance, R&M are now frequently accounting for somewhat more than 50% of the rental income. A large chunk of your rental goes straight to those costs – the same costs you would be paying if you owned the place. And that is before any mortgage payments.

        Most landlords would be lucky to be making $5 – 10k pa pre-tax profit on an asset worth the thick end a $1m. The idea that your landlord pockets your whole rent and lives the life of Riley on it doesn't stack up in reality.

        At most you can point to the capital gains but then that is a different business model which depends on constantly buying, borrowing and selling property – which is emphatically not what you want for the long term residential rental sector.

        • KJT

          Doesn't explain why rents have been steadily increasing around 6 to 8% year on year, despite more recent lower mortgage interest rates. And cost inflation about 2%.

          Pure profit taking by landlords expecting tenants to buy their houses for them.

          • RedLogix

            The relevant cost increases are rates, insurance and maintenance. Not to mention govt mandated improvements.

            The fixed cost inflation I am seeing is a lot higher than 2%.

            You can imagine pure profit taking all you like, my real world data says otherwise.

            • KJT

              My real world data shows that rents were rising by similar amounts when costs were going down.

              In the last couple of months rent rises decreased, despite all the moaning about increased costs. Which suggests, along with the above inflation increases over several decades, that costs have little relationship with rent rises.

              • RedLogix

                when costs were going down.

                I have hard evidence that says that fixed costs are going up:

                Rates for example.

                Insurance up 150% in a decade, 5.6% in a year

                And these are just the big two. Maintenance and mandatory improvements increase every year by similar amounts. Combined these are now consuming more than 50% of the rental income. And this is before the variable costs of the mortgage – which in case you have not noticed have also increased this year.

                And one of us has skin in this game.

                  • RedLogix

                    You claimed fixed costs had been going down and yet when I provide clear evidence to the contrary you shift the goal-posts rather than honestly acknowledge the point.

                    Do you imagine I have not seen this before?

                    • KJT

                      No. I said that the rate of rent rises had decreased recently despite, supposedly, costs going up.


                      And that rents were steadily rising even when costs were, (‘were’ meaning, in the past) low or dropping.
                      Which leads to the obvious conclusion, that like so much of the present rises in food and other costs, rent rises are driven by excessive profit taking, not costs!

                    • KJT

                      And are.

                      You arguing against something I have clearly not said, “Strawman”.

                      Where have I seen this before?

                      In fact arguing against a mythical “Left” of your own creation seems to be your favourite form of debate.

                    • RedLogix

                      And that rents were steadily rising even when costs were, (‘were’ meaning, in the past) low or dropping.

                      Which costs? Rates? Insurance? Maintenance and improvements?

                      I produced two references. It is not unusual to see rates rise well above inflation, often in the range of 5 – 10%. Insurance has risen 150% in a decade. Together with R&M these are not minor items and form the bulk of the fixed costs.

                      You are claiming these have been very low or falling which frankly seems delusional to me.

                    • KJT

                      I said rents were still rising even at the times, in the past! when costs were falling.

                      If you are not going to bother to read what I wrote, and going to continue to argue against things I haven't said, as you usually do, there is not much point in talking to you.

                    • RedLogix

                      You claim rental costs were falling. Which ones?

                      You seem incapable of answering even the simplest question,

                  • RedLogix

                    So I looked at your referenced article. The highlighted text box the author has chosen to highlight reads:

                    The classic example of rent-seeking is that of a feudal lord who installs a chain across a river that flows through his land and then hires a collector to charge passing boats a fee (or rent of the section of the river for a few minutes) to lower the chain. There is nothing productive about the chain or the collector. The lord has made no improvements to the river and is helping nobody in any way, directly or indirectly, except himself. All he is doing is finding a way to make money from something that used to be free.

                    In this context this can only mean that residential rentals are simply a way of making money from houses that should be free.

                    Or if not – what is your point?

                    • RedLogix

                      Again you evade the question. You linked to an article whose central point in this context was that houses should be free. Do you agree with this or not?

                      If you think I am straw manning this then now is a good moment to make your point.

                    • KJT

                      The central point is that someone should be adding something productive for the common good, before they make a profit on it,

                      Rentiers do not add anything. They simply hoard assets so they can charge rents on them.

                      If landlords built houses specifically to rent, which some do,, I don't have a problem with them. They are adding to the stock, which will ultimately decrease rents.

                      Our society has a problem with speculators buying up existing assets. Pushing the price up beyond what most can pay, so they can then rent them back to the same people they have shut out of the market. Morally no different from hoarding toilet paper and reselling it at $100 a roll. Then the same people expect others, who pay taxes on all their income, to support with rents, infrastructure and subsidies their largely tax free profit, sorry, capital gains.

                      Because you are one of them, you seek out a moral justification for something that is basically immoral.

                      My other point, which you strawmanned by saying I claimed costs were currently going down, when I said nothing of the sort, is that rent rises over a long time period, according to the graph I supplied, have been constantly increasing by amounts exeeding general inflation, independently of any cost fluctuations. A characteristic of a market driven by profit taking, not “cost plus”.

                    • pat

                      Could I suggest this is a pointless argument?….the conditions that have been in place over the past few decades were what drove real estate/rent inflation, it was by design and some were in a position to benefit from them (not all by design, some were accidental beneficiaries) and most people given the opportunity would seize those benefits…..the actions of individuals didnt create the problem, it was systemic and there is no going back and changing the past however so we have to address the problem that exists today.

                    • RedLogix

                      If landlords built houses specifically to rent, which some do,, I don't have a problem with them.

                      Well this is precisely what we did. An apology is in order.

                      As I have seen so often before you consistently fail to make the distinction between property speculation and residential rental businesses. I have already made this point above at 3.2.2:

                      At most you can point to the capital gains but then that is a different business model which depends on constantly buying, borrowing and selling property – which is emphatically not what you want for the long term residential rental sector.

                      We run a residential rental business that we heavily funded, built (hands on) and operates long-term rental units. In 20 years of doing this we have not sold a single unit for capital gain.

                      But nonetheless you claim our profits are tax free. Maybe we need a better accountant – because each year he sends us an IRD tax bill in error it would seem.

                    • RedLogix

                      Rentiers do not add anything. They simply hoard assets so they can charge rents on them.

                      I recall that you potter about in boats for a living; maybe quite big ones that charge for their service. I think their owners just hoard these ships, do not add anything of value, and they really should be provided free.

                      Or am I missing something here?

                    • KJT

                      As I said, I don't have an issue with those who are in the business of building and supplying additional housing.

                      So. You have the apology.

                      However you have been defending the speculators, which is nowadays most landlords in NZ.

                      I have continually here and elsewhere criticised our national over reliance, on capital gains tax "farming".

                      In housing, farming and other businesses, that are not in the business of producing anything, but simply in the business of constantly bidding up the prices of existing assetts. This is destroying our economy and country.

                      And more to the point. Destroying any chances of a sustainable "circular economy" when increasing monetary wealth is so dependent on the "greater fool" principle.

                    • KJT

                      @Pat. ."the actions of individuals didnt create the problem".

                      It is the actions of individuals. Individuals lobbied against capital gains taxes. Individuals chose to add to their houses instead of investing in a real business. Individuals decided to decimate our social housing and subsidise private landlords instead.

                      I made a personal choice. To create a productive business, instead of leveraging a dozen houses, which I could have easily done. I didn't want to be part of the problem.

                      To say it is not individuals, when we all have choices to act morally and socially responsibly, is not accurate.

                    • pat


                      Individual's actions WITHIN the system….ultimately real estate inflation is driven by the availability of credit to the sector….something controlled by banks, central banks and government policy (in collusion).

                    • RedLogix

                      I have continually here and elsewhere criticised our national over reliance, on capital gains tax "farming".

                      Well finally something we can agree on. Indeed this is exactly why I strongly supported the ideas TOP were promoting that tackled this exact issue head-on with a CCT and major taxation reform to shift investment from capital to production.

                      You are free to quibble the details of their policy, but there is no denying their intention and my support on it.

                      As for property price inflation – from my perspective it is nothing but a pain in the arse. It means our ROI is ridiculously low and the margins have become wafer thin. With fixed costs now consuming 50% or more of the income, it means there is little room to move if interest rates continue to rise.

                    • KJT


                      Which consists of individuals, do they not?

                    • pat


                      Lol..everything boils down to individuals…but they are not the individuals you are seeking to nominate.

                      The reality is those 'individuals' have changed over the period of the system…consider how many RBNZ governors there have been, bank ceo's and politicians…and yet the system remained in place largely unchanged.

  4. RedLogix 4

    An economy requires multiple inputs to function well. Labour, technology, security, energy and capital are the big broad categories that come to mind. If any one of these is insufficient then productivity will fall creating real poverty.

    Labour and capital also have the odd property that if they exist in a surplus then other perverse effects come into play – low wages and inequality, or hyper-inflation for example.

    NZ right now is in the odd situation of having a bit too much capital (from the COVID binge) which is pushing the inflation button, while running low on labour (also from the COVID immigration reset) which is hitting the productivity brake. This is pushing us into what has been called the stagflation zone, where the tension between falling productivity and and rising inflation has no easy, immediate solution. Importing more workers merely suppresses wages and sharpens the impact of inflation, while constraining capital raises interest rates and that directly hits costs.

    It is my sense, and I stand to be corrected, is that no nation has worked out how to handle this scenario in a painless fashion. The only good news is that stagflation seems to be an unstable state and after a messy, unhappy period – it resolves itself.

    • mpledger 4.1

      It's not too much capital fueling inflation, it's world events. Inflation is pushing up the cost of living everywhere. If it were the settings particular to NZ then it would only be happening here. We can't control the energy and food crisis that the war in the Ukraine, and the second order effects, have created.

      • RedLogix 4.1.1

        It's not too much capital fueling inflation, it's world events.

        Well yes – that is certainly driving the component of inflation we import. I also had in mind the rise in property that been happening domestically for some time now. In addition the retirement of the boomer generation is pushing hard on labour costs everywhere.

        If you drill down into the weeds there is a complex tangle of cause and effect going on – but in one short comment above I was stepping back and looking longer term.

        • Nic the NZer

          Can you elaborate on why 'too much capital' could be fueling inflation?

          One would think that increased capital (if the term has any meaning) is associated with high productivity and would therefore lower inflation. Or by capital do you just mean a short hand for money or credit, though clearly technically they are quite separate concepts.

          • RedLogix

            You are quite right to pull me up on that. I was using the word capital loosely as a shorthand for credit.

  5. Sanctuary 5

    NewsTalk ZB in particular is increasingly an ambient proto-Fascist space.

    The presentation of selected voices of capitalist interests by ZB dollar store media demagogues like Du Plessis-Allan as that of "the voice of the people" reminds me of Umberto Eco's seminal 1995 essay "Ur-Fascism" in which he observed that:

    "…Ur-Fascism is based upon a selective populism, a qualitative populism, one might say. In a democracy, the citizens have individual rights, but the citizens in their entirety have a political impact only from a quantitative point of view – one follows the decisions of the majority. For Ur-Fascism, however, individuals as individuals have no rights, and the People is conceived as a quality, a monolithic entity expressing the Common Will. Since no large quantity of human beings can have a common will, the Leader pretends to be their interpreter. Having lost their power of delegation, citizens do not act; they are only called on to play the role of the People. Thus the People is only a theatrical fiction. To have a good instance of qualitative populism we no longer need the Piazza Venezia in Rome or the Nuremberg Stadium. There is in our future a TV or Internet populism, in which the emotional response of a selected group of citizens can be presented and accepted as the Voice of the People…"

  6. higherstandard 6

    I must be missing something as the MSD figures don't support a position that we're approaching full employment.


    I can also confirm the current situation in primary and secondary care in NZ is shambolic not due to covid and winter respiratory illnesses per se but due to the disastrous lack of HCPs (doctors, nurses and paramedics) – the government and its ministries continue to pretend that they have matters in hand, they are either misinformed or they are lying.

    • Descendant Of Smith 6.1

      I suspect a few reasons why that is a contradiction.

      1. The labour market has grown and is larger than pre-COVID

      1,060,195 jobs May 2019
      1,131,220 jobs May 2022

      71,025 more jobs

      This means that even if the number of unemployed remained the same the percentage would drop slightly

      2. Some/many of those jobs have been taken by people returning to NZ during COVID-19 and are often skilled jobs e.g. growth in web-site building as businesses developed an on-line presence, increased number of medical staff (hospital or otherwise), increases in the building industry or jobs have been filled through migration from places like Auckland to regions leaving locals still unemployed.

      3. Regional differences are quite spread – those producing food are less affected than those dependent on tourism

      4. Part of the economy such as low paid tourism and low paid cafe work has yet to recover.

      5. It is the off season for low-paid seasonal work.

      6. People who are caring for children are risk averse due to COVID-19 so are not seeking work whereas they might have been previously e.g. parents with disabled children. Labour force survey excludes those not looking for work by only counting those who have applied in the last four weeks as unemployed.


    • lprent 6.2

      I must be missing something as the MSD figures don't support a position that we're approaching full employment.

      Of course you are. But really you just need to learn to read more carefully.

      Once you remove the people who significant disabilities for work, ie solo parents, people taking care of their elderly, and people with Jobseeker with a health condition or significant disability, then the % of the population who are available for work is hitting somewhere between 3 and 4% and closer to 3% than 4%. This is the traditional area where employer start having to hunt for staff.

      Then lok at the maps and you will find that the places with least percentage of people on benefits of any kind are – well they are where the jobs are. Auckland, Wellington, Canterbury and Southern – which coincidentally are where all of the whining employers seem to be as well.

      What this dumbarse pamphlet doesn't show is the important information, like residence time on Job-seekers for people who are 'work ready'. Some of that can be gleaned from the excel spreadsheets.




      Where you will find a precipitous drop in people on benefits who have been on them for less than a year in areas with work, as lower drop in people who have been on benefits for longer in those areas, and limited changes in other areas.

      It is pretty obvious what is going on.

      People who are ready and able to work and who are in areas with work are getting jobs. People who have been on benefits for longer periods have adapted to living on a pittance, and aren't willing to move to more expensive housing where there is work or don't have the capability (ie a car or pubic transport) to go to poorly paid jobs to work – so they don't.

      Employers aren't raising wages high enough to tempt people to increase their costs to work at jobs in a different town or different area where there is work. They also don't want to work on improving productivity with plant, training, or better management.

      Plus of course there is that stupid punitive stand down period that WINZ still has. That massively increases the risks for people starting new jobs because the economically rational course of action is to not take jobs that carry any risk of losing them in the short-term.

      That bit of policy stupidity is only there to satisfy right fools like yourself who get their jollies from hitting people while they're down with moralistic ignorance (and a lack of ability to read numbers).

      • dv 6.2.1

        Good analysis Lpent

        Thank you

      • Patricia Bremner 6.2.2

        Thank you Iprent. Expressed as I never could. yes

      • higherstandard 6.2.3

        Good Lord Lynn – did it take you all day to come up with that just so you could have a dig at me, how sad.

        I think this article in stuff from earlier in the year covers matters quite succinctly,


        Instead of the government and opposition spouting spin at each other it'd be a pleasant change if someone presented a coherent plan for getting different sectors up and running again.

        I'm most interested in health where there are long term structural issues and immediate staffing problems that require more attention than flippant nonsense from whomever is the current Minister and/or Director General of Health.

        • Descendant Of Smith

          Part of the reason for the shortage is the growth in health-care and social assistance jobs since COVID-19.

          234,321 jobs pre-COVID
          261,265 jobs now.

          So more people are employed but demand continues to increase. It hasn't helped that DHB's were filled with English managers putting in the same time and motion, just in time type practices that they had previously instigated in UK hospitals – which they complain about as turning into rubbish while at the same time implementing in NZ the very same policies that deteriorated the UK hospitals.

          Which sectors do you think aren't up and running.

          Agriculture has gone from 96,007 jobs to 99,000 and was as high as 113,487 at seasonal peak.

          Manufacturing has gone from 232,878 pre-COVID-19 to 236,067.

          Construction from 171,566 to 201,457 jobs in May. Even wholesale trade has lifted by 4,000 jobs and retail trade by 10,000 jobs.

          Professional science and technical services has gone from 168,464 jobs to 191,391 jobs.

          The losses are in the food industry and then only 3,000 jobs, transport another 3,000 jobs, media and telecommunications 1,000 jobs, admin 2,000 jobs, and arts and recreation 3,000 jobs.

          Out of 19 sectors that stats NZ use only five have less jobs now than pre-COVID and the many of that five are low paid – something that has been warned about for years as contributing to keeping productivity down.

          I'd trade the extra 23,000 professional jobs for the 3,000 food jobs any day. Isn't that what we want to happen – a move to better paying jobs.

          • Descendant Of Smith

            "National Party leader Christopher Luxon blamed the rise on “the subtle prejudice of low expectations”."

            I'd also say Luxon is almost right on this but he's pointing the fault in the wrong direction. It is a prejudice of low expectations by employers – their unwillingness to (re)employ Maori, women, Pacific Peoples and those with disabilities let alone pay them the same wages.

            This was evident in the recovery after the GFC and history is repeating with the after COVID period. The employers will try and blame the people but it is them, the employers, own failings to employ and train these different groups that is the problem.

          • Ad

            Good post DoS keep it coming.

    • Craig H 6.3

      There are some excellent replies already posted, and to add to those, Stats NZ have done some work on the relationship between unemployment statistics and benefit numbers using their own surveys, government data from the Integrated Data Infrastructure and MSD data. To quote Stats NZ:

      We found that levels of unemployment and JS-WR should not be assumed to indicate a single pool of unemployed JS-WR recipients, even when at a similar level or moving in the same direction, as many unemployed people are not in receipt of JS-WR, and many JS-WR recipients are not unemployed.

      JS-WR = Jobseeker Support – Work Ready i.e. beneficiaries.

      A further quote from the summary:

      Linked HLFS-benefit receipt data consistently shows no more than a third of unemployed people are in receipt of JS-WR, even as benefit numbers swelled during COVID-19. As such, we should not assume there is a single group of unemployed JS-WR recipients, even when at a similar level or moving in the same direction.

      HLFS = Household Labour Force Survey.

  7. Adrian 7

    There is a world- wide shortage of doctors and nurses because modern health practices can solve many, many more conditions than ever before. If the Us and Europe need to import nurses from Asia and Africa, where arguably they are needed much more then the local problems need a local solution but “ encouraging “ young people into medicine by dickheads who should know better by “ selling “ the career as “ overwhelmed, hellish, burnt out and chaotic “, that is stupid in the extreme.

    You are right Mickey, it is our success that is causing the labour shortage, here in Marlborough there is a company building electric, AI guided tractors from the ground up, others developing high tech components and materials for battery technology and others developing all sorts of products including complete engines for vintage aircraft. Nationally it is the same, NZ has a spacecraft in Moon orbit, not a failed NASA satellite but the NZ RocketLab vehicle that got it there has taken over the role of testing the orbit for a manned space station in the future. These are incredible successes but we hear bugger all about them because the fucking media is operating like a wartime Fifth Column and that is disgusting and treasonous.

  8. Reality 8

    The rampant negativity on all issues in most media would make one think NZ is on a par with Ukraine or Sri Lanka. Covid is causing many difficulties, but business and opposition parties are the ones who do not want any public health restrictions so yes, many more people are getting sick with Covid or flu. They can't have it both ways.

    Spent several hours at Wellington Hospital yesterday. Everything functioned extremely well. No complaints whatsoever, even though again the media makes out health is totally collapsing.

    • Visubversa 8.1

      New Zealand has always been part of an international market for health professionals. We train a lot of overseas students here in medicine etc as well as Kiwis who may or may not take their talents offshore. We may be getting more health professionals from the USA with the removal of "Roe" and as the Philippines exists on remittences from their biggest export which is the labour of their diasphora, we get their nurses etc. There has been a pandemic sized spanner in the works of this market over the last couple of years and it will take some time to resolve.

    • mpledger 8.2

      Unfortunately, business has learned that if they are squeaky wheel then they will get hand-outs. So, they are squeaking for all they are worth.

    • Mike Bond 8.3

      Glad that you think everything is working just fine at Wellington hospital. You fail to mention that all elective surgery has been canceled. You fail to mention the 6 hour minimum waiting time at ED. You fail to mention the hundreds of outpatient clinics that have been cancelled. But glad it went well for you.

      [Only when you use your pre-approved e-mail address will your comments appear here – Incognito]

  9. Poission 9

    Immigration constraints due to covid ,( and subsequent high international travel costs) have seen significant falls in unemployment in developed countries,and significant wage growth in the US at the blue collar end.

    The blue collar wage growth was higher in non white,and lower educated (high school level) as participation rates grew.The elasticity in the US jobs market,will also dampen recessionary layoffs (due to unfilled positions,remaining unfilled) a similar position we will see here (as jobs decrease and disappear in the service and low productive sectors)

    • KJT 9.1

      Funny how all those who used to insist that immigration and temporary visa's, didn't affect local employment and wages, have gone quiet.,

      • Poission 9.1.1

        Housing costs,rents etc.

      • Craig H 9.1.2

        The Productivity Commission inquiry into immigration settings found that "On average, immigration is not driving down wages nor displacing local workers."

        In the actual report, they acknowledge that won't necessarily be the case at all times in all regions or sectors (another point in the summary was "The use of Labour Market Tests, Skill Shortage Lists and tying migrants to employers can suppress wages and productivity"), but on average across the economy and labour market, not so much.

        • Stuart Munro

          Yeah but – how objective were they really.

          Many of us know a large employer with few or no kiwi employees, paying rock bottom (or less), and constantly whining about a labour shortage, that kiwis don't want to work, and generally wailing and gnashing their teeth.

          And why wouldn't they – this profitable fiction has worked for them for decades.

        • Poission

          Nah the PC inquiry was mostly word salad,citing mostly their own reports,and with little rigor such as models etc. ( writing a 123 page report to provide very little is an unproductive exercise)

          The US fed also looked at this and provided some clear evidence that it does affect wages at the bottom end of town.

          Taken together, Charts 3 and 4 suggest that the reduced supply of foreign labor caused employers to raise wages to attract workers. These trends align with previous studies showing a non-positive relationship between immigration and wages (Card 1990; Borjas 2003). As immigration declines, wages rise, as the reduced labor supply drives employers to raise wages to attract more workers.


          • Craig H

            The USA is somewhat different to NZ, with different immigration laws and employment laws and standards (or lack of). Do you have any examples of NZ research showing that?

            • Poission

              The US does have access to high quality data (often over very short times),it also does have some strong employment laws ( overtime mandated for incomes under 60k at rate 1.5) Immigration is always part of the US economy,and where forced restrictions such as Covid did occur we did see increases where there were inverse demand constraints.

              The best other demand shock in NZ was over the period post the CHCH eq,where International students and temporary migrants left town,and both participation and wage growth in Canterbury were around twice the level of the rest of NZ (rbnz study) some internal migration for skilled labour,but the participation rate increase ( outside of construction) was in the older part of town in both PT and FT employment (over 55).

        • KJT

          On average.

          Then COVID came along and showed graphically that the idea that immigration doesn't affect local wages and job opportunities is nonsense. Which working people knew all along.

  10. barry 10

    The problem with immigration is that the immigrants require services, and that requires more labour. Instead we need more training and higher productivity.

    Successive governments have created an environment where there is not incentive to raise productivity, which in turn has kept GDP growth down, and meant that we are a a low age economy.

    We learned last year that there were 200 000 people here with houses, jobs, schools etc who had no reasonable expectation of PR or citizenship. The government has allowed them to stay. Now the employers want to get back to the situation where we invite in another 60 000+ every year.

    We will need them to build enough houses for all the immigrants to live in.

    The answer is not unconstrained immigration (some is necessary and good), but training and investment in technology to help people become more productive (and better paid).

    • KJT 10.1

      Never happen, while New Zealand businesses are so wedded to competing to see who can pay the lowest wages, fed by Governments who use imported labour to give an illusion of growth, rather than investing in training, efficiency, capital machinery and innovation!

    • foreign waka 10.2

      Perhaps some of the companies should start sharing the benefit (profits) and providing training, higher wages, provide infrastructure that mostly benefits them anyways. There are reports of unprecedented profits since the pandemic begun and of cause the shareholder wants ever improving returns. This has started with the billion dollar payout at the start of the pandemic with the return curve going bananas. Corporate welfare at its finest, the unabated greed and dishonesty by far to many (not all), the ruthlessness being worn like a badge of honor whilst those who have to actually pay for it all are once more taken to the cleaners. Surprised? Not really, because underneath a thin veneer the beast is easy to see.


      • Patricia Bremner 10.2.1

        yes the missing link. Training retention payments and profit share to encourage productivity.

    • Craig H 10.3

      Absolutely right. Something that usually gets ignored by employers complaining about labour shortages is that migration is normally a poor solution to a general labour shortage because migrants also create additional demand and therefore jobs in the form of their spending.

  11. Descendant Of Smith 11

    We've been here before.


    In its entry on the Black Death, the 1347–50 outbreak of bubonic plague that killed at least a third of Europe’s population, this chronicle from the English city of Rochester includes among its harrowing details a seemingly trivial lament: Aristocrats and high clergymen not only had to pay triple wages to those toiling in their fields, but, even worse, they themselves had to perform manual labor.

    Beware the capitalist though.

    Yet there was a great deal of deliberate (in)action behind these developments. Rather than supply some of the needed labor themselves, landowners turned to solutions that might produce the kind of world they were capable of imagining. In England they created first the Ordinance (1349) and then the Statute (1351) of Labourers, which froze wages at pre-plague levels, compelled workers not otherwise engaged in fixed, long-term employment into year-long contracts with the first employer who demanded it, and established penalties to ensure compliance.

  12. Jenny how to get there 12

    It is a crisis profits (oops), growth could be seriously affected.

  13. " Heather’s solution will increase unemployment and thanks to market forces drive down wages. It is weird that right wingers hate market forces when they improve the plight of ordinary workers but are fine with them when they cause misery.

    Greed and control ?

    Neo liberal policies don't allow for pandemics and other crises that capitalism has created when it comes to pay the serf's more and an increase in employment.

    The sooner the flood of slaves are admitted to Aotearoa and the inevitable drop of the pittance paid to working people who are expected to survive on miserable wages the happier Heather and the bulk of business in little ole neo liberal non union paradise of NZ will be

  14. Binders full of women 14

    Urgently need more DJs and less nurses.

  15. DB Brown 15

    In a world where people are going full postal more and more often, these puppets of the press pay no heed to the mobs surrounding them. No, indeed they fancy themselves above such affray…

    They'd boil babies if there was money in the fat.

    And simultaneously, they look down their noses at those trying to help.

    It's not going to end well.

  16. Ad 16

    +1000 Mickey

  17. Obtrectator 17

    " ….we will need to invest in productivity….but it will take time and money…..but hey let’s just get some immigrants quickly and we can go back to bidding up our houses off each other and put off the investment side …. "

    Same old story with any course of action known to be necessary but distasteful: "yes, great idea, but …. not in my lifetime, O Lord".

  18. Scotty 18

    I doubt this establishment has trouble attracting staff.

    Some Queenstown Businesses should take note!


  19. Corey Humm 19

    Its great that we're nearing full employment and employers have to compete for employees not the other way around, and seeing major wage increases, I desperately wish this had of happened before COVID and global inflation apocalypse because, if we lose the next election, we'll lose millennials and gen z to this neoliberal experiment, because they'll think full employment always leads to inflation.

    Today , if they interviewed a worker for every business owner, the workers would complain angrily about the cost of living and how they feel they are going backwards.

    Many would say they struggle to buy food, they can't fill up their tank and are struggling to keep the lights on and or find a house to rent outside of Auckland.

    It wouldn't be a ringing endorsement, the cost of living crisis is the major crisis facing this government, it will be the cost of living that decides the next election, it won't be COVID, the health system, environment, Maori issues, abortion, it'll be about the cost of living in NZ.

    Right wing neoliberal policies will not help a damn bit and make everything worse but the fall out will just be blamed on labour.

    I hope the left are ready , for the first time in my entire lifetime, to fight an election based on economics and class.

    Next year looks set to be a battle royal between left wing economics and right wing economics.

    Can Jacinda Arderns Labour fight an election based on progressive economic policy? In 2017 she argued for making the existing neoliberal system fairer and mostly coloured between the lines, in 2020 she campaigned on practically nothing, she didn't need to, the most left wing thing she did was argue for a pathetic 3% increase to the top tax after ruling out things like capital gains taxes and wealth taxes.

    I think she could. I think she can win if she runs a campaign that looks beyond the status quo of which she is apart of based on universalism and getting out the vote of the worker, the unemployed, the middle class out.

    But she'll have to be more exciting economically, we need the "capitalism has failed " Jacinda of 2017 not the "I categorically rule that out" Jacinda of 2019- present

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