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Can We Prepare for 2023?

Written By: - Date published: 7:48 am, November 20th, 2022 - 69 comments
Categories: Deep stuff, economy, kiwisaver, tourism, wages, workers' rights - Tags:

2023 is going to hit New Zealanders hard.

Since the 2011 Christchurch earthquakes New Zealand has been beset by a new major crisis about once every two years. 2022 was our year off and get ready we are in for a strange and hard recession. It won’t likely be one in the usual form definition of two successive quarters of negative GDP growth, or even in a massive surge in unemployment. No, it will be in the price of everything.

Our Reserve Bank is set to deliver an unprecedented .75 raise in the base interest rate.

That is on top of the rises already pushing through into mortgages, rents, and everything else.

The United Kingdom government fresh into power has hiked tax rates and its public are facing an exceedingly fast corrosion of their spending power as inflation accelerates.

Central banks in Australia, United States, Europe and many others have also raised their base rates fast.

Deusche Bank has also forecast that Australia will enter recession next year.

This is an alarm bell for serious economic turbulence that New Zealand will not be able to shelter from. Deusche Bank’s analysis says that “We expect Australia’s unemployment rate to end 2023 at 4.5%, that is, one percentage point higher than the current unemployment rate at 3.5%.”

That diverges sharply from the Australian Reserve Bank’s forecast of 3.7% for end 2023.

Here is the first problem. When central bankers work this hard to slow the economy down, they often end up tipping into outright reverse.

The really bright stars on the New Zealand horizon are several. Our neighbour Indonesia is doing extremely well selling coal to the world and of course to power New Zealand.

The United States economy grew faster in the July-September quarter though we don’t yet know how bad the tech implosion in California will be. The United States economy, by some measure still the largest and most dynamic, is doing fine.

The other good news is that the entities this government taxes to make the money to redistribute to citizens in the form of subsidies and services, well they are fine. Employment is up. Bank profits are up. Energy company profits are up. Agricultural profits are up. Tourism related companies are up. Over the past three years New Zealand has relied more and more on its government to redistribute this awesome windfall tax income to keep people fed, employed, and otherwise functioning as a society. Minister Robertson is one of the safest pairs of hands in the world, and will continue to be so. There is no one in National or Act that gets close to understanding the scale of 2023’s impact.

The other good news is you can’t get a rental vehicle in Queenstown or Christchurch, all the flights are full, and there’s barely a bed to spare. Tourism is back. New Zealand’s core economic constraint is not enough workers, and that is our powerful protection against 2023’s global recession.

And now for the darkness. Which is pretty dark.

New Zealand’s primary private investment is in domestic real estate, and its average value has tanked 20% and continues to fall in the worst downhill roll since the 1990s and can’t yet see a floor to it. That’s most of our nest eggs, if one if fortunate enough to own one.

New Zealand’s savings in the form of Kiwisaver are tanking. Official advice on Sorted is “everyone keep calm, carry on with your long term investing.”

This year NZSuperFund lost $3.3 billion.

Our ACC fund lost a record $4.5 billion.

ACC suffers record $4.5 billion fall in the value of its investments | Stuff.co.nz

So there’s not a lot of calm evident in international share markets and not much “everyone keep calm” justified.

China’s economy is rapidly decelerating. Though our exports to China are remarkably recession-resilient it will be a test to see if our main exporters are nimble enough to switch markets. It’s just not going to be like it was pre-COVID.

The pressures on the New Zealand economy will continue from the Russian invasion of Ukraine which is set for at very least all of 2023. According to the NZ Treasury September 2022 analysis:

“…the invasion will reinforce a number of transitions in the global economy already underway from existing pressures on globalisation including China/US dynamics and the COVID-19 pandemic, alongside long-standing but increasingly time dependent challenges such as climate change and the need for a “green transition”.

New Zealand has no refining capacity and is one of the most car reliant countries on earth. About 40% of its energy in total comes from imported petroleum. We are only in the start of diesel-driven grocery price rises.

New Zealand’s government is getting to the limits of what it can do to shelter New Zealanders from the impacts of this impending hardship.

We are once again facing forces larger than the powers of our political order to cope with.

The question is not whether house price crashes, rent increases and food and fuel inflation will continue to hurt us.

The question for 2023 to prepare for is where else are we going to be hit and hit hard?

69 comments on “Can We Prepare for 2023? ”

  1. Tiger Mountain 1

    The above speculations/predictions are exactly the reason the Aotearoa NZ working class, middle class, alienated and super annuitants (not an inconsequential bunch in receipt of Govt. transfers) need an urgent political campaign along the lines of “For the many not the few”.

    This link shows some of the beneficiary numbers–“pensioners” usually detest being lumped in with dirty filthy bennies, but that is essentially what they are none the less.

    Contrary to the ADVANTAGE take, gouged corporate profits are not a positive for the majority of us. Particularly when they come from what should be publicly owned and controlled infrastructure.

    But who is going to advance the necessary campaign? We the people have to step up. The NZCTU is essentially a neutered, class collaborationist organisation, the NZ Labour Party is in thrall still to neo Blairism, and the small but impactful Marxist parties that Muldoon once demonised, are mainly online entities now.

    The shit is going to hit the fan but the hard reality has to be faced–it is time to retire the legacy of Rogernomics and Ruthanasia. ACT and Natzos will only support measures that ensure what loot there is keeps being shovelled “upstairs”. Ordinary people have to get involved in political organisation in their communities again. This includes extra Parliamentary politics which so many have never known in our era of Flybuys points and precarious employment and contracting out.

    The major problem for the tories and NZ Labour is so obvious–residential property “owners” with thumping great mortgages will descend into negative equity territory. Green Party has put up some good initiatives lately and this is the in imo for the Greens.

    There are obvious measures to take…
    • Rent Freeze, Rent Control
    • Mortgage freezes–use your bloated profits to tide you over banksters
    • Basic Income for all citizens paid via IRD–abated as any significant income rises
    • Retire MSD/WINZ, all transfer payments through IRD and a new agency for special needs groups
    • Free Dental and universal fare free public transport
    • Return power generation and supply to full public ownership and control
    • Rebuild a public works Dept. send Fulton Hogan and the rest of the bludgers packing.
    etc. etc.

    Capitalism will not solve this current situation to state the obvious. People have to take collective responsibility again.

    • bwaghorn 1.2

      I don't know about your dentist but mine is a dodgy charger, $280 for a clean and exrays took 20 minutes max, wants to do 2 fillings for $780 , but am sure she just does cosmetic fixes at times that she wants to do and calls it fillings, have had at least one other customer tell me the find the same. the bill might be to big for the country.

      • Anker 1.2.1

        Someone posted a link yesterday with the figure on $1 billion dollars a year for free dental treatment.

        Grant Robertson has said he can't afford that, but they did afford $11 billion over four years for the new health authority………

        Bureacracy before direct service provion never works for me.

        • weka

          are you suggesting they take $1B from the existing health budget?

          • Anker

            No, I am suggesting the Health re-structure funding, is wasted money. Sure it may bring some benefits (although a contact I have pretty high up in Health NZ is deeply sceptical) but I would prefer money to go to front line services e.g dentistry, rather than a re structure, especially during a pandemic

          • Anker


            RE the funding of our new health system $11 billion dollars allocated.

            That would fund a 11 years of free dentistry.

            I think if people had a choice they would go for free dentistry. IMO it is impossible to be certain of benefits steming from this re-structure.

            The most essential thing in health delivery is having a well staffed well resourced health work force who can deliver services that are either free or affordable.

            • Patricia Bremner

              One of the costs Anker was getting to where systems were compatible.

              During the pandemic it was discovered many Hospitals were separate silos, and General Practice was a lottery. Their computer systems were patchy.

              We sling off at so many things, but the mobilisation of a workforce to vaccinate and test was remarkable.

              Our maintenance of medical and medicine supplies well done, by propping up Air NZ.

              Now we bring services back after a pandemic which is still having high costs in lives lost and ongoing services.

              Improving systems, trying to get more equity into some areas means adjustments for some. Those who expected to privatise are not pleased.

              Dental was a goal, but the goal posts moved.

              • Anker

                I am not sure if this is what you are saying Patricia, but my impression was that the old DHBs stood up reasonable well during the pandemic. That would be another reason for me for pushing a very expensive re structure down the queue of must dos.

                I far rather see 11 years of dentistry funding that a new health bureacracy. How about you?

        • weka

          Of course dental should be free (or cheap/scaled like GP visits). Here's the real politik argument for why Labour won't do that currently. Various threads from Lew's tweet.

          The point being made is that between now and the election, there's little room to move. If Labour put out a free or subsidised dental policy and then can't deliver because of the pandemic and staff shortages, that risks them losing the election next year.

          • Anker

            Is there a crisis in work force numbers in dentistry? I didn't think so.

            • Incognito

              What is the basis of your opinion?

              • Anker

                Incognito, am assuming you mean the basis for my opinion about there not being a shortage of dentists?

                I would stand corrected if someone showed me stats that we are short of dentists and this may well be the case. But I have never heard it mentioned, nor does there seem to be any difficulty accessing dentistry if you are able to afford it (may be different in different areas).

                But funding dentistry is one thing. Having a shortage of dentists is another.

                • Incognito

                  Ok, thanks for confirming that there is no basis, i.e., a “preconceived opinion that is not based on reason or actual experience”.

                  • Anker

                    My actual experience is that I have never had trouble finding or booking to see a dentist.

                    Do you have any evidence to support that there is a shortage of dentists in NZ?

                    My comments weren’t really about the workforce in dentistry, but rather how imo the govt should have forgone the $11.1 billon dollars spend on a re structure and provided 11 years of free dental treatment. What do you think about that Incog?

                    • Incognito

                      I think that personal anecdotal evidence is of limited use in convos of this general nature and that drawing conclusions, connections, and (inferred) causations based on that is, at best, a fruitless exercise. Extrapolation based on one single point is not sound, not in mathematics & science, nor elsewhere. It is not my place to fill the gaps & blanks for you – you are free to do or not do this yourself, as you so choose.

                      I also think that comparing apples with oranges is not helpful. Also, reducing everything to alleged costs and dollars allocated/spent is oversimplification as it ignores crucial context. Weka already alluded to this (https://thestandard.org.nz/can-we-prepare-for-2023/#comment-1922088).

                    • Shanreagh

                      My actual experience is that I have never had trouble finding or booking to see a dentist.

                      But then you perhaps don't live in my home town of Wairoa. Dental Services have been precarious for several years.

                      The last full time dentist is 3 years younger than me. He advertised and advertised over the years for someone interested in a partnership who could take over when he retired. With no luck. he had to retire from work and was not able to sell the practice.

                      The point about dentistry is that even with a local dentist the cost can be prohibitive.


                      The health sector is in need of reform. In the 1990s there was work done around the intense silos that had grown up around hospitals and hospital care. Although this showed promise, and some of its features are in the new system it was not continued. So I don't think there is an automatic case for saying the cost of the reforms $$$$$ should be allocated to dentistry or hips or prostates. Ultimately this money can be wasted by inefficient base services.

                      The creakiness of the system was shown during the pandemic and relied hugely on central controls/guidelines and the wonderful unselfish and unstinting work done by our health professionals. This is not sustainable.

                      The real bugbear is that health is political. Our three year term does health reform no favours. This is another reason to ensure that Labout/alliances are voted in in 2023. This will enable health reforms to bed in and people will see the difference and not be tempted, hopefully, to support a party that says it will turn health on its ear again.

                    • Anker

                      Yes of course Shanreagh Wairoa is an a drastic state with health professionals. I understand there is no cardiologist there.

                      We disagree about what health money should be spent on.

                      No matter how much better the new health system operates, there will still need to be a. cardiologist found for Wairoa and more dentists and nurses.

                  • Anker

                    I asked a question about the dental workforce. I never stated it as a fact.

                    I stand by what I am saying about funding dentistry over a health re structure.

                    Govt money is govt money and they are the one who spend it.

                    Apples oranges, bananas tomatos………who cares. I am talking about access to dental care for the population.

                    But you don't seem to interested in engaging any sort of discussion with me about any issues, but appear to be very interested in actively critiquing all I say on here.

                    What's up with that?

                    • Yes there is a shortage of dentists in NZ. More critical in some areas than others – but a shortage overall.

                      ATM, this is largely managed by cost – i.e. dental treatment is expensive, so pretty much only the relatively well off, or those in acute pain, sign up for treatement.

                      Instituting universal free dental would open the flood-gates – and the existing dental workforce would be very rapidly overwhelmed by demand – and close their books to new patients.

                      There's little point in making something free, if you actually can't get it at all.



                    • bwaghorn

                      @Belladonna, if dentists could be trusted dental work could very simply be triaged and only necessary work be done on the government tab, but you can guarantee it'll be rorted to hell

                    • Anker

                      I think the shortage of dentist and making dental work free are two separate issues.

                      I wonder what Andrew Little and Health NZs plans are to increase the supply of dentists?

                      And as Bwagon pointed out, like with hospital services, things can be triaged.

                    • Incognito

                      What’s up with that?

                      I think it is clear enough and I made my point and it is pointless to spend more time & space on this under this Post.

                    • weka

                      I think the shortage of dentist and making dental work free are two separate issues.

                      Only if you ignore the real world practicalities. In Lew's thread there is a clear explanation for why Labour can't commit to free/subsidised dental services. If Labour say yes, we will do this, and they don't deliver because there is a staff shortage and there are too many difficult things going on from the pandemic, then Nact will be in next year and then we won't have free dental care. Labour don't have a magic wand.

                      What they could be doing is working towards it, and they could be sorting out their messaging. The whole 'you can get $ from WINZ' was idiotic, given how hard it is to get $ from WINZ for dental work. They could fix that system. But, like many other people and organisations, the government has been under a lot of stress in the past three years. They've got the same problems as everyone else with sickness and staffing and people doing jobs they're not trained for. Plus they have to run the country and win next year's election.

                      I'm not saying we should excuse them something, I'm saying it's time to adapt to the long term stress the country is under and start coming up with different solutions.

                    • weka

                      What's up with that?

                      I can't speak for Incog, but from my pov, the sub thread was about real politik deriving from worker shortages. Making an argument that it's not a problem because you are not aware of the shortages is kind of fail here because we then end up having a conversation based in something that isn't true.

                    • Shanreagh

                      There has not been a cardiologist there for many years. In the 1950/60s my father needed cardiology care and he needed to go to Napier for it.

                      In those days specialties often had days per week there or month. I think they still do this. Wairoa had a hospital with a competent general surgery (with surgeons) programme in the olden days. Now it is a triaging and staging place and that is OK most of the time. As long as helicopters. ambulances can get in and out and they have enough on hand specialists to stabilise people.

                      I see the DHB is now providing dental care and this is a good move and could/should continue. Traditionally dental care for adults was provided through the private sector. This did not continue in Wairoa with one of the local Iwi stepping in to work with the HB DHB. As with everything provided by Iwi health-wise this will be available to all on the basis of need.

                      Again if you look at the saying that how the poorest in the population are cared for as a measure of the health/wealth of the country then the opportunity is there for improvement.

                    • Incognito []

                      Bit hard to get a cardiologist anywhere here in NZ, not helped by not putting the role on the Green List.


          • Anker

            re your comments below about free dental when Labour may not have the workforce to supply. I don't buy that rationale.

            Labour promised big in mental health delivery. They didn't have the workforce, but they had the will. They signalled their intention and because they set that as their intention, they acted accordingly eg. the worked with NZAC to allow that workforce to work in DHBs. While there is an unmet need and a lot to do, there has been progress.

            Labour also did it with the recent announcement about making early child care available and then low and behold there were people who worked in the industry saying "we don't have the staff".

            So I don't think not having the staff really is a sufficient reason.

            Setting dental care as a free service means that if National gets in, they have to deliberately roll it back. As it would likely be a very popular service, it would be one National would can at their peril.

            • weka

              So I don't think not having the staff really is a sufficient reason.

              It's not the reason. The reason is that this close to the election they can't take on an additional big policy and one that is likely to fail in the time frame.

              You are assuming that it's possible to get free dental care in place and functioning before the election. It's not that National would roll it back, it's that it wouldn't be up and running in time. It's not going to happen before Christmas, which means that Labour have a couple of months to develop the policy and get Treasury to cost it so that they can include it in the 2023 budget. This isn't my area of knowledge, but I can't see how that is possible given all the things.

              We should of course be calling for free dental care, and Labour should be making encouraging signals. I just think the real politik needs to be considered too in our discussion.

              • Anker

                I didn't make a case that there was no dentist shortage. Someone else raised it and I asked a question "Is there a crisisin workforce numbers in dentistry? I didn't think so. It was a geniune question.

                Incognito then said something like a preconceived idea that isn't based on anything including experience. So I replied that my experience was I could get to see a dentist pretty easily.

                I wasn't denying there was a shortage of dentists.

            • weka

              Labour also did it with the recent announcement about making early child care available and then low and behold there were people who worked in the industry saying "we don't have the staff".

              And is it true they don't have staff?

              When was the policy developed? Was it in this year's budget? Or will it be in next year's?

              Free dental care is a much bigger policy shift.

              • Anker

                I am reporting what I saw reported on the news re not enough staff, but it would make some sense wouldn't it, because the policy would increase access so more staff would be needed. I think the policy is due to kick in in April next year. So they will have to work out whether it is doable or not. Or at how much of it is doable.

                Free dental care is a big policy shift, but we also have a workforce up and running, even if it doesn't have capacity (I would be interested to know how much of dentists case work is on cosmetic dentistry.

                I don't think Labour have the will to implement the policy. their call.

                I remain unconvinced that Heath NZ will make improvements of any significant nature (with the expection of anything they do to increase and support the health work force. But that's just my opinion

                • weka

                  I haven't looked at HNZ closely, but it's very clear that there have been serious problems with inconsistency of services across the country arising out of the DHB system. And that some DHBs have been struggling. I'm not a fan of centralisation in many areas, but high tech and ambulance at the bottom of the cliff medicine does seem like an area that would do better with an overarching structure.

            • Belladonna

              So, looking at the bit of the dental system which is already free – services to children.
              This is already falling over because of lack of staff. And was in crisis even before Covid hit (my kid aged out of the school dental program before Covid – but was not seen by the school service for the last 3 years of his primary schooling. I had to make other arrangements.)


              Parents are being told to enrol their kids at dentists – if they want dental treatment. Many dentists won't take children and teens – as the government payment is much less than they can make from adults. And many parents can't arrange time off work, etc. to take their kids to routine dental appointments.

              Announcing a huge policy (and free dental would be a significant change) – when they *know* there isn't the staffing to deliver on it – simply hands a huge political stick to the opposition. "Labour's failure to deliver, yet again"

              I'm not opposed to free dental services – in fact, I think it's an excellent idea. But the country quite simply doesn't have the resources to deliver.

              Not having the staff, is actually a sufficient reason.

              • Anker

                Thanks Belladonna. I accept there is a dental shortage, although I wasn't aware of it prior to this thread. I have a close relative who is a dentist and he's never spoken of it, although again I guess it depends somewhat on where you are practicing.

                One of the problems with Govt payments to dentists is if they are at a lower rate than they can charge, why would they prioritize subsidized work? People moan a lot about dental charges, but listening to my relative talk, the costs involve in denstry are significant. Filings, support staff, even the cost of the dental chair is huge. Dentists have horrific student loans, so given this why should the provide a subsidized service.

                Govt has done this with funding counsellors as well (not this govt, but back around 2006 – 07). A scheme run through the PHOs really undercut counsellors wages. In this field, what that meant was that anyone who was a good therapist, wouldn't bother taking the subsidized clients. They didn't have to.

                "when they know there isn't staffing to deliver on- certainly hands a big stick to the opposition. Indeed. This is what happened in mental health.

                Labours likely failure is that there doesn't appear to be any sort of plan to increase the health workforce or make training in these valuable jobs very attractive and easy. Labour were told five years ago by Dr Ian Powell that there were three problems with the health service "workforce shortages, workforces shortages and workforce shortages". This has got considerably worse under their watch. Covid is no excuse. While we were covid free we had a golden opportunity to recruit all those burnt out staff who were nursing covid around the world.

                IMO it is another case of the Professional Managerial Class (and their party of choice, Labour) thinking they were the most important part of the health system and that they knew best)

      • weka 1.2.2

        Consumer did this test once, they had the same person go to five different dentists. That person got five different diagnoses. Something like that (it was a while ago).

        If dental was free and universal, people could get second opinions and go with the least invasive procedure. Who wants a root canal when a filling will be enough?

        • bwaghorn

          My nect nearest dentist is about 50 mins away, which makes it a half day operation, I'm time poor most of the time as it is

          • weka

            ae, country life. Thing is, with low cost dental care, other people can do the second opinion hunting and this will change the culture of over egging that exists in the dental sector.

      • mary_a 1.2.3

        Do you live in Auckland bwaghorn (1.2)? I ask because before hubby and I moved from suburban Auckland to Central Otago just over five years ago we were paying horrific prices for our dental services up there. I guess high overheads could be partially to blame,

        Prices and (the dental work carried out) down here are pretty good in comparison to our previous Auckland dental experiences, particularly the cost.

        For instance, last Wednesday I paid $130 for a # tooth filling plus an xray and a clean. Previous dental work done locally has cost about the same. Can’t complain about that.

    • mary_a 1.3

      Thanks TM (1) you got it in one there. Well put.

    • Darien Fenton 1.4

      NZCTU neutered class collaborationist? FFS. Have you seen their FPA campaign going on right now from town to town? Have you ever met Tali Williams CTU Strategic Director ? Daughter of a militant Seafarer, FIRST Union activist and leader. Organiser in many campaigns. https://esra.nz/people-learn-using-power-interview-tali-williams/

      [typo fixed in e-mail address – Incognito]

      • Tiger Mountain 1.4.1

        First, Unite, Etū and Maritime Unions and Meatworkers etc. are great unions–the dead weight on the CTU is the state sector, the PSA in particular. This partly arises out of the State Sector Act–an essential part of Rogernomics and the enduring neo liberal Parliamentary consensus.

        FPAs are a great development–but no strikes–so it is a class peace trade off that will potentially assist thousands of non union members, like National awards catered for compulsory union members for decades, which is a different category from class left active members.

        • Darien Fenton

          I work for the PSA with a fixed term role; you have this image of them as a union for the Wellington elite. I used to think that, but I was wrong. Right now we have just settled an agreement for our border security workers ; along with E Tu and NUPE. You know what they do eh? They stand for hours every day as you go through the airport and have to follow the Airport company and international instructions around airport security, They can't even get a proper 10 minute break. During COVID, many were sent off to MIQ. Then there are all those other PSA members who are there when you arrive ; from Customs and MPI. Some of our members start work at 2am or 3am to suit the incoming flights (and you could say the elitist demands from travellers). And the abuse is terrible. Can I ask you to have a look at the community membership of the PSA as well, including home care workers? There’s no doubt PSA, NZEI and NZNO are active members of the CTU, but they also have members who are struggling to earn Living Wage. And they work actively with other unions, PS I am a Life member of E Tu.

  2. bwaghorn 2

    Most kiwi savers haven't lost a thing . my 12 year 0ld one is at 2.5% lifetime gain,(better than it would have got in the bank, as I can't access it for 14 years it'll probably do better than that, mines in growth mode, anyone one coming up to retirement should be in conservative so its just negative to beat the doom drum .

  3. Gabby 3

    On the bright side (?), real estate is still vastly overpriced so there's room for more 'tanking' there.

  4. “How do we get through 2023?”

    The basic home garden will help if you plant silverbeet onions courgettes lettuce cherry tomatoes carrots cabbage and rhubarb.

    Growing parsley mint and chives, rosemary and sage, all help.

    If you don't have room try the bucket garden idea. The first 4 of these grow easily, and are able to be used in most dishes.

    If that is not possible for you…

    Look for wartime recipes. They made a great deal with limited ingredients.

    Look up recipes like Empire meat loaf.

    You get twice the product for the meat used. The recipe can be made into a variety of other products. (Chick peas and refried beans to replace meat.)

    Look for their meatless recipes, eggless recipes, and ways to get sweetness when sugar was scarce.

    Simple ginger loaf. (never fails) and can have fruit added to change it up.

    Have a good supply of spices and herbs salt and pepper. Most are in the $2 to $3 range. Golden syrup to help with the egg costs when baking. Also I have discovered a small packet of dried coconut milk, great in stir fries and no waste.

    Flour and derivatives may get scarce, so to have at least 5kg on hand in a sealed container. Plain is best, you can use it more ways. Yeast powder, baking soda and baking powder as rising agents are needed as well.

    Lookup "In season fruit and vegetables" the look for recipes using them, as they are usuall cheaper.

    Clean out your cupboard and use stored stuff first, freeze left overs for putting in stews casseroles soups or pies.

    Others will have other useful ideas I am sure.

    • Anker 4.1

      A good time for us all to make sure we are not wasting food (by buying to much perishable stuff) . We need to be doing this anyway for the plannet.

    • Tiger Mountain 4.2

      –Feed a whole street on 1kg of mince–as ACT MP Muriel Newman used to blather on about. But I get where you are coming from Patricia, practical measures to help us get by in these tough times are definitely required.

      Solar panels and inverters should be installed all across the country, and rain water collection systems too–but with the likes of private/corporatised water companies, and power companies, they can actually penalise users for doing the above!

      • I have saved $80 per fortnight, using some of these recipes. If we still had a garden I could have saved more. It all helps.

        Another thing we do is write a list of what we need from one weekly/fortnightly town visit using our small car. Often a loop to do 4 or 5 things to limit driving.

        I am not one for austerity, and believe a little of what you like keeps life from being dull, so we plan our treats into each week.

        We buy the coffee we like, but don't buy coffees out as we feel they are overpriced, and we have until lately had lunch at an outdoor verandah of a cafe with friends, though rising covid infections have stymied that.

        We use price comparisons and have donated/sold anything we no longer use, and even a few items sold aids the budget in tighter times on a benefit or pension.

        Many look for a "one off fix" in tight times, like selling a vehicle boat or other larger item to clear smaller debts, but a bit of careful planning does help keep up with price rises.

        Those who lose work if a firm fails have different issues. A tightening economy affects employment sadly. We all need to help each other more than ever as a community, and not fall for the NACT dialogue and false premise of individual bootstrap politics.

        Thanks for your replies Tiger Mountain and Anker.

  5. RedLogix 5

    Peter Zeihan on Twitter and the rising cost of capital. He accurately predicted all of this years ago:

    • SPC 5.1

      Paul Krugman does not agree

      What all this suggests to me is that the era of cheap money is not, in fact, over. A few years from now, we’ll probably be back to a situation in which too much saving is chasing too few investment opportunities, and interest rates will be revisiting their old lows.


      • RedLogix 5.1.1

        I am interested – but paywalled. What is the gist of his argument?

        • SPC

          The basic answer is that since 2000 and especially since the global financial crisis, businesses have persistently been unwilling to maintain a level of investment spending that used all the money households wanted to save, unless interest rates were very low. This condition has the unfortunate name “secular stagnation” — unfortunate because it’s widely and wrongly construed as an assertion that it means slow growth, not low interest rates. The idea of secular stagnation was introduced in the 1930s, but the postwar boom made it seem irrelevant. Then Japan began experiencing persistent weakness and very low interest rates in the 1990s, and in the aftermath of the 2008 financial crisis, the whole advanced world found itself in a similar condition.

          What causes secular stagnation? The best guess is that it’s largely about demography. When the working-age population is growing slowly or even shrinking, there’s much less need for new office parks, shopping malls, even housing, hence weak demand. And as you can see in this chart, America’s prime-working-age population, which grew rapidly for many decades, began stagnating just about the time interest rates began sliding:

          And these demographic forces aren’t going away. If anything, they’re likely to intensify, in part because the rate of immigration has dropped off. So there’s every reason to believe that we’ll fairly soon go back to an era of low interest rates.

          In that case, however, why have rates shot up? Well, the Fed is raising rates right now to fight inflation. But this is probably temporary: Once inflation is back down to 2 to 3 percent, which will probably happen by the end of next year, the Fed will begin cutting again. In fact, real long-term interest rates, which reflect expectations of future Fed policy, are up from their pandemic lows, but still only about what they were in 2018-19. That is, the market is, in effect, betting that the era of cheap money will be coming back.


        • SPC

          The above is from the previous article he wrote on this.

          “We’re still probably feeling the effects of pandemic spending: Households saved much of the aid they received, and consumer demand has stayed strong as they spend down those savings. But eventually, the boost to the economy from pandemic aid will fade away.

          And once that happens, we’ll probably be back where we were before the pandemic, with weak private investment demand holding interest rates down.

          Why will investment demand be weak? Last time I wrote about this I stressed demography — the drastic slowdown in growth of the working-age population — plus what looks like disappointing rates of technological progress. That’s still my story, but let me now put it a different way.

          One well-known concept in macroeconomics is the accelerator effect. This says that investment spending generally reflects not the level of G.D.P. but the expected change in G.D.P. The logic is that investment spending is only high when businesses want to increase their capacity, which happens only when demand is growing.

          This tells us that investment spending will only remain high if we expect rapid economic growth. And what we know now doesn’t support that expectation.”


          • SPC

            He goes on to add that growth is likely to be less in future. Partly because of USA demography (both lower fertility and immigration) and partly because the gain of what he calls a midlife crisis in technology. Saying the gain from computers and networks has been realised.

            I might offer a negation – government demand for money to pay out make social security payments and an end to net savings inputs as baby boomers retire (thus his 2025ish forecast being countered with this other effect by 2030).

            • RedLogix

              Thanks for this. Apologies for the late response.

              I would enjoy seeing a debate between Krugman and Zeihan. Both are smart people and bring differing viewpoints to the argument. Krugman would be obviously more grounded in economics per se, but Zeihan brings a deeper set of drivers around geography, demography and security to the table, that I think conventional economists have overlooked for much of the post WW2 era.

  6. Poission 6

    Since the 2011 Christchurch earthquakes New Zealand has been beset by a new major crisis about once every two years. 2022 was our year off and get ready we are in for a strange and hard recession.

    2022 was when the narrative changed with covid,and the government relaxed to a dying with Covid Policy,we have lost more to Covid then Soldiers in Gallipoli.

    Reducing policy such as masks on planes,and vaccine requirements for international visitors was an over extension,that increased demand on primary health care,hospitals and delayed selective surgery,with all its concomitant problems.

    The excess death toll this year in NZ, will be around 15%,and will most likely see the first decrease in life expectancy in 50 years.

    The reserve funds (for covid resurgence) have been siphoned off for 3 waters,and this is all debt funded pork bone politics.

    Government debt is already 9 billion ahead of budget,(in the first 3 months) difficulty with borrowing has meant housing corp debt will now come directly from government borrowing,interest rates will finish next year at around 6% ( margin over US fed 5-5.25%)

    Not seeing anyone providing solutions to remove cost from the economy.



    • Adrian 6.1

      I think your doom and gloom on death toll is bullshit. You are confounding "with Covid "and OF Covid ". NZs life expectentcy has risen by approx 18 months since Covid struck and medical advances have cut the Covid toll dramaticly.

      Most people, as we have been told for a while now who have or are dying WITH covid, already had co-morbidities and therefore don't shift the excess deaths ratio that much.

        • Incognito

          Yes, under-reporting is an (known) issue but not all excess deaths have Covid-19 as contributing or even causative factor. There was an uptick in other respiratory viruses as well.

          • Poission

            Other respiratory viruses including influenza,did not have the mortality rate that is apparent now,even due the 2017 influenza epidemic that saw over 800 deaths across Australasia and had significantly lower ED admissions.

            As we have similar population demographics,diet,climatology,we can use Australian data to map onto NZ.As deaths from Homicides,vehicles,and water are fairly stable,we can pose that deaths are either from other causes or that there is simply a reversion to the mean.

            The excess death toll in Australia and NZ are similar and we will see a decrease in life expectancy in both Jurisdictions,which at present seems to be a neat acturial fact,

            • Incognito

              Thanks for that interesting info. Unfortunately, I don’t have the time to dig up the data but the excess deaths in NZ are much higher than explained by Covid-19 as contributing or causative factor. So, the other likely (!) causes of death are other respiratory illnesses such as the flu, which caused lower death rates in the previous couple of years, and possibly (!) other medical causes of death, e.g., because of postponed care in other health areas. I don’t think anybody really knows at this stage – the data are collected and undoubtedly being analysed. My main point is that excess death cannot all be contributed to Covid-19 in NZ (and elsewhere).

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