CTU – Put the cost of fixing inflation on those who caused it, not on working people

Written By: - Date published: 5:29 pm, January 23rd, 2023 - 104 comments
Categories: cost of living, Economy, Unions, workers' rights - Tags:

Working full time required us getting food parcels… With our children unable to afford to go and see grandparents I haven’t seen my mum in 5 years. We live in the same island. Never in my life have I been so poor”

That’s one of the many heartbreaking comments we got back from respondents to our fifth annual mood of the workforce survey. Heartbreaking but unsurprising when more than three quarters of working people who responded told us that their income had fallen behind the cost of living.

That’s five percent more than last year when COVID was at its peak, and a more than fifty percent increase on the survey before that.

At the same time just over half got a pay rise in the last year and 61% say increasing wages is the best fix for them and their whānau for fighting these cost increases. Which is why Fair Pay Agreements are so very important. Again unsurprisingly, the two biggest contributors to budget pressures are basic necessities – rising food and housing costs.

Through all of the data one thing stands out: it’s working people who are already paying the price for inflation.

But some people seem to think that working people aren’t paying enough.

Recently a bunch of bank economists claimed that we need increased unemployment and reductions in real wages to beat inflation. These same economists didn’t say much about the record billions of dollars in profits the banks themselves had extracted or the destructive property speculation that enabled it. Perhaps inflation doesn’t apply to banks?

In the meantime, the main opposition party is spending a lot of energy to find politically palatable ways to reduce tax for the wealthiest in our society. They put their incredibly expensive and brutally inequitable top tax bracket cut back in the top drawer for another day when they realised it was political poison.

But they haven’t taken their almost-as-ridiculously-expensive tax cuts to property investors off the table. They seem to think inflation doesn’t apply to property investors?

Our economist, Craig Renney, costed those tax cuts- they’re $2.5bn over three years and it will be paid for by cuts to public services. Most likely the public services that help working people most like health, education, and family support and childcare. There’s just not enough to cut elsewhere.

So working people are already paying for inflation and it seems that a lot of the wealthiest New Zealanders and their political advocates want them to pay even more.

Is there another option?

Of course there is. We released just such a plan – our Inflation and Incomes Act – late last year. That outlines an approach to inflation that doesn’t rely on raising working people’s mortgages and cutting their pay to bring inflation under control, but instead looks at the real drivers.

It aims to share the burden of inflation more fairly and, importantly, recognises that inflation is driven by bigger long-term economic imbalances. Look at our current cost of living crisis for example.

This crisis didn’t come about because we all got paid too much or too many of us have got jobs.

It’s the result of weak and deregulated supply chains collapsing because of COVID, of an overreliance on oil that skyrocketed in price because of a war on the other side of the world, of property speculation that went unchecked and rents that were uncontrolled, of a supermarket duopoly that makes at least twice as much profit as is normal for the international supermarket sector, and of financial institutions stripping billions of dollars in profit every year.

And it’s because of a labour market that relied on bringing skills in from overseas rather than investing in developing them ourselves.

Given the real causes of high inflation, the idea that the answer to inflation is to cut wages, cut employment, and cut public services is ridiculous.

It’s more than ridiculous. It’s immoral.

Tell the respondent who wrote to us “We’re getting less and less for our money. We are not able to afford some of the basic necessities now, and our children are missing out.”, that she should now get paid less because we won’t regulate supermarkets. Or that she should lose her job because we’ve overcooked the economy by letting people make windfall profits buying and selling the same houses to each other.

Explain to the respondent who wrote “I was ill with cancer and would have liked a break from work while I dealt with chemo but the sickness benefit wouldn’t cover my rent.” that this is a good thing because otherwise we’d have to implement rent controls or tax capital gains. Tell them they should take a pay cut to help out the economy.

Now find a way to say to the mother who wrote “There’s something wrong with the state of things when I’m weighing up the cost of taking myself or my kids to the doctor and buying food… No one should ever have to choose between these two things.” that she should put even more aside for her healthcare so we can afford tax cuts for the very wealthiest.

We know what’s caused inflation. It’s not a secret and it’s not the people who are currently paying the price.

As a nation we have to make a political decision to address the real problem rather than making working people pay.

Again.

That wouldn’t be a bad start for the new Prime Minister.

Melissa Ansell-Bridges – CTU Secretary

104 comments on “CTU – Put the cost of fixing inflation on those who caused it, not on working people ”

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  1. Thinker 1
    23 January 2023 at 5:45 pm

    Is the report publicly available, please? If so, where?

    Thanks.

  2. PsyclingLeft.Always 2
    23 January 2023 at 5:54 pm

    BusinessNZ chief executive Kirk Hope, who told Morning Report he would like some "moderation" in future minimum wage hikes.

    "We need a reset in some of the industrial relations area. We've had a massive shift in minimum wage – it will contribute to inflation as business costs rise, so we really need to have a reset in the industrial relations area.

    https://www.rnz.co.nz/news/political/482935/incoming-prime-minister-chris-hipkins-singles-out-global-inflation-pandemic-as-priority

    I'm sure he would ! However…

    A spokesperson for Minister of Workplace Relations and Safety Michael Wood told RNZ there was no evidence its minimum wage hikes have had any significant impact on inflation.

    "When the government considered the latest increase to the minimum wage, analysis by MBIE estimated there would be only a 0.15 percent inflationary impact," they said.

    https://www.rnz.co.nz/news/political/482935/incoming-prime-minister-chris-hipkins-singles-out-global-inflation-pandemic-as-priority

    This will be a test. I'll await with interest. Mr Hipkins..dont let us down.

    • Tiger Mountain 2.1
      23 January 2023 at 6:07 pm

      Watch PM Hipkins indeed–if you ever go into a duopoly supermarket–basic cheese at $20 kg is not far off…price gouging is rampant. Some local markets are still good value though.

      Govt. needs to keep subsidy on petrol, bring in fare free public transport, GST off food etc. but will they? The invisible hand will not save you Chippy.

      • PsyclingLeft.Always 2.1.1
        23 January 2023 at 6:13 pm

        Consumer NZ chief executive Jon Duffy​ said supermarkets took more than $1 million in excess profits every day.

        “These profits are twice what they should be. We need more competition to drive down prices and give New Zealanders a fairer price at the checkout.

        https://www.stuff.co.nz/business/128586011/a-slap-in-the-face-consumer-nz-calls-for-end-to-excess-supermarket-profits

        And…i would say their employees…arent on a massive wage ! Probably the least the duopolists can get away with.

        • Maurice 2.1.1.1
          24 January 2023 at 9:11 am

          As 'profits' that will be taxed at 28% pouring close to $280,000 in to Government coffers each day to be used for paying outgoings such as welfare. Remove the profit and the tax take disappears along with the ability to pay out welfare.

          • PsyclingLeft.Always 2.1.1.1.1
            24 January 2023 at 9:29 am

            You seem fixated on welfare. And do you also think the duopoly are …performing some kind of public service paying…tax? Corporate philanthropy? lmao.

            • Maurice 2.1.1.1.1.1
              24 January 2023 at 2:34 pm

              Would "government expenditure" be better?

              The article notes that a base profit of 5.5% is the historic norm. Now unfortunately with 7%+ inflation (loss of value for the money) a return in excess of 12% is required to return the same value at year end. Anything less than the rate of inflation as a return results in reduction in capital in real terms and eventual bankruptcy – whence we no longer have Supermarkets to sell us food.

              Just pointing out that "excess profits" also result in increased Government tax revenue.

  3. Muttonbird 3
    23 January 2023 at 6:10 pm

    This crisis didn’t come about because we all got paid too much or too many of us have got jobs.

    It’s the result of weak and deregulated supply chains collapsing because of COVID, of an over-reliance on oil that skyrocketed in price because of a war on the other side of the world, of property speculation that went unchecked and rents that were uncontrolled, of a supermarket duopoly that makes at least twice as much profit as is normal for the international supermarket sector, and of financial institutions stripping billions of dollars in profit every year.

    Bravo, Melissa.

    If student politicians Seymour and van Velden are anywhere near policy later this year, working people will pay the most horrendous cost for their bizarre ideological experiment.

    • PsyclingLeft.Always 3.1
      23 January 2023 at 6:16 pm

      Hell yes. Also…a thing I have NEVER understood, is the "average" wage worker..who hates Labour. And likes the Nats. Ignoring their Labour given pay increases, extra holidays,etc etc. Go figure…

      • Muttonbird 3.1.1
        23 January 2023 at 6:27 pm

        That average wage worker has issues with one or more of the following:

        • Vaccines
        • Women
        • Māori
        • Transgender people
        • PsyclingLeft.Always 3.1.1.1
          23 January 2023 at 6:37 pm

          Sad but true. In my working life (quite a time period)…I have tried on different occasions,to get workers to stand together against bullying "managers", poor or dangerous working conditions etc etc….. I have heard SO many reasons they cant/wont.

          Some i got..but sadly, mostly, they didnt want to cause a problem. Like they werent working FOR the problem ?

          Anyway..I really hope nact dont get back..because of some who cant see how bad it will be !

          Workers..deserve pay increases. End of

          • KJT 3.1.1.1.1
            24 January 2023 at 3:43 pm

            Workers know all to well, that they have no power and "standing up" or even joining a Union, will only result in no job or other individual Ill treatment.

  4. observer 4
    23 January 2023 at 6:55 pm

    The TV/media vox pops today used reports like this to create an entirely false picture, namely – people are doing it tough, therefore government bad, therefore opposition in.

    With the obligatory soundbite of Luxon saying "we need change" and not one fricking reporter asking him or telling the public what that "change" entails.

    Do we have to wait until October before they bother?

  5. adam 5
    23 January 2023 at 8:11 pm

    The CTU is to be congratulated.

    Now NatAct will come rushing to defend their Lords and Peers

    Least they have to care about weak and the poor – not their problem.

    • Gosman 5.1
      24 January 2023 at 1:01 pm

      The proposed solutions in that piece will make things worse not better for those at the bottom.

      • Incognito 5.1.1
        24 January 2023 at 9:59 pm

        You would say that but your comment lacks supportive analysis and sound argument, as usual, and thus has zero credibility and validity aka you’re wasting our and your own time here, as usual. At least over at KB you’ll score some ‘likes’ with your nonsensical troll-like comments. How’s that for value for money and ROI? Any intelligent free-market disciple would count their losses and run but not you!?

  6. tsmithfield 6
    23 January 2023 at 8:52 pm

    I agree that there is a lot of imported inflation. But I think the government also has a lot to answer for so far as inflation goes.

    One area is government fuel levies. The government did the right thing to reduce their tax take on fuel. In reality the government was creaming it due to the fact that the GST take increased substantially with fuel prices. But reducing the levy had an anti-inflationary effect.

    However, now, they intend to reverse that change and put the levy back on. The effect will be to bump inflation up. I think the government should keep that levy reduction in place while there is a cost of living crisis and inflation is high. That would leave a lot of money in the pockets of kiwis.

    Another area is immigration. Due to the tight immigration settings wages were artificially inflated with no productivity benefits for employers. In fact, employers have been screaming out for immigration settings to be loosened for a long time now. There has been a highly detrimental impact on productivity due to the difficulty in finding workers.

    We have experienced that in my business. It certainly hasn't been easy.

    My company is in the "unemployment business". That is, our business operates in the field of automation. So, when labour costs get too high, businesses look to automate to reduce their labour costs. Ultimately, that leads to lay-offs and higher unemployment.

    Wage increases are great. But they need to be driven by increased productivity, otherwise the labour costs are seen as increased costs that need to be reduced through gains in efficiency, such as automation.

    This is not only in the area of factory automation. But also, in automation of office processes, and cost-reduction methods such as moving call centres overseas.

    At the moment, wage increases have been due to artificial government-induced stresses in the supply of labour. This will end in a cycle of both lower profits for businesses, continued inflation, along with a recession. In other words, stagflation, which is far worse than ordinary inflation.

    And, what to say of the incompetence of the Reserve Bank. They pumped way to much cash into the economy. This had the predictable effect that asset prices would be driven dramatically higher.

    And now that they see the folly of their ways, they are punishing consumers by ratcheting up interest rates dramatically.

    This has had the disastrous effect on those who had to pay over-inflated prices for those who needed a house, especially first home buyers, in that a lot of those will now be underwater with negative equity, and many may end up losing their homes.

    • Muttonbird 6.1
      23 January 2023 at 9:01 pm

      Same old story as described in the new post by the CTU. You lot want ordinary Kiwis to suffer so that you can make outsized profits which feed the child you gave 20K to as a 19 year old.

      How about thinking of the greater good rather that your own immediate family?

      • tsmithfield 6.1.1
        23 January 2023 at 9:04 pm

        Why do you assume outsized profits? Most businesses in NZ are small to medium sized enterprises, many just trying to survive.

        Think about the poor retailers and hospitality businesses who have just gone through Covid lockdowns. And just when things are coming right in the Covid respect, they are now facing having to get through a recession.

        Many of us have mortgaged our houses to fund our businesses. My brother and I, who run our business actually pay ourselves less than some of our employees.

        Unless you have actually tried to run your own business, you really have no idea about the sort of stresses that business face.

        • Muttonbird 6.1.1.1
          23 January 2023 at 9:11 pm

          I am self employed. I know what it means to live day to day. Oh to be able to leverage property against borrowing.

          This is where you nut jobs lose the centre…

          • tsmithfield 6.1.1.1.1
            23 January 2023 at 9:16 pm

            It is the fact that some of us have the ability to do that which allows us to grow our businesses and employ people. But there are big risks with that as well.

            I think banks need to change their attitudes to lending for self-employed though. It is really hard to get a bank to give a loan to someone who is self-employed compared to someone in a job, even if the self-employed person is doing really well.

            So, if you are in that situation, I do sympathise with you, because I don't think it is really fair.

            • KJT 6.1.1.1.1.1
              24 January 2023 at 3:31 pm

              Why would banks lend to a productive business when they can make more, without risk, by lending to property speculation

    • KJT 6.2
      24 January 2023 at 3:27 pm

      "were artificially inflated with no productivity benefits for employers."

      Employers have benefited for decades by wages that were artificially depressed by immigration policies and Union busting. Increasing the wealth of capital at the expense of workers.

      Wages are still nowhere near the percentage of GDP, they were in the 60's.

      Employers will just have to get out of the habit of having employees subsidising their marginally profitable business and work at making it more efficient.

    • Incognito 6.3
      24 January 2023 at 10:09 pm

      Due to the tight [loose] immigration settings wages were artificially inflated [suppressed] with no productivity benefits for employers.

      FIFY

  7. Stuart Munro 7
    23 January 2023 at 9:27 pm

    Go the CTU – needs to be said.

  8. PsyclingLeft.Always 8
    24 January 2023 at 7:53 am

    Banks, energy companies post huge profits as households struggle

    Meridian is up 55%, Mercury 42% and Genesis is up from a $31 million profit to $221 million, a near 600% increase.

    https://www.1news.co.nz/2022/08/25/banks-energy-companies-post-huge-profits-as-households-struggle/

    Fucks sake Labour ! : Re-Nationalise NZ Power ! And NZ Rail ! Get rid of Kiwirail and the white-anters within it….

    Better to 'bite the bullet' and get rail work done quickly, Transport Minister says

    https://www.rnz.co.nz/news/national/482965/better-to-bite-the-bullet-and-get-rail-work-done-quickly-transport-minister-says

    And yea….about Business profits…

    Vodafone NZ has lifted profitability and edged closer to the $2 billion revenue mark in the year to 31 March, 2022.

    https://www.reseller.co.nz/article/701709/revenue-profit-grow-vodafone-nz-simplifies-its-business/

    Banks keep economic headwinds at bay with $1.7b profit in last quarter

    https://www.rnz.co.nz/news/business/475169/banks-keep-economic-headwinds-at-bay-with-1-point-7b-profit-in-last-quarter

    And despite the Labour commies ( Jacinda, I miss you : (…..

    Despite significant ongoing global turmoil, New Zealand agricultural producers are positioned for another profitable year in 2022, according to a just-released report by agribusiness banking specialist Rabobank.

    This would represent the sixth consecutive year of general profitability for the country’s agricultural sector.

    https://www.rabobank.co.nz/media-releases/2022/220203-new-zealand-ag-sector-looking-to-another-profitable-year-ahead-rabobank-2022-outlook/

    Despite the hate-on towards Labour….there are many more making heaps. So, whining employers, Kirk Hope, et al..fuck off

    • Gosman 8.1
      24 January 2023 at 8:32 am

      The government would need to borrow billions more to re-nationalise the energy companies and likely case a massive capital flight similar to the one that led to Liz Truss's political demise.

      • Incognito 8.1.1
        24 January 2023 at 9:04 am

        Speculation on speculation plus a little fearmongering but no real genuine analysis or effort whatsoever, which is your MO.

        • x Socialist 8.1.1.1
          24 January 2023 at 10:09 am

          Speculation? Of course capital flight would become a reality. There's no money in a communist nationalised state.

          [headsup that you are on your last warning. You have a history of bans and warnings for trolling, Māori bashing, and quoting without linking. The next ban will be until well after the election. We’re having a clear out so that TS is in good shape for the election period and to reduce moderator workload. – weka]

          • weka 8.1.1.1.1
            24 January 2023 at 11:08 am

            mod note.

          • Incognito 8.1.1.1.2
            24 January 2023 at 12:49 pm

            So few words yet so much ignorance on display!

            The capital flight must have been enormous when we re-nationalised NZ Rail and Air NZ, for example, and we descended into a “communist nationalised state”.

        • Gosman 8.1.1.2
          24 January 2023 at 10:41 am

          How would the government re-nationalise the energy companies unless they borrowed billions of dollars?

          • Incognito 8.1.1.2.1
            24 January 2023 at 12:49 pm

            Government is already borrowing billions. Has this led to capital flight? What does Liz Truss got to do with this? Is she your new benchmark for quality arguments?

            Put some effort into your piss-poor comments!

            • Gosman 8.1.1.2.1.1
              24 January 2023 at 3:03 pm

              Liz Truss's experience is useful because it illustrates what would occur if a government decides to ignore fiscal discipline.

              • Incognito …
                24 January 2023 at 10:21 pm

                Nonsense! The NZ PM did not get ditched (by their own Party) each time NZ Government undertook a (major) re-nationalisation. Liz Truss barely had time to put her feet under her table.

                You really have to start putting some effort into your comments. They suck!

      • PsyclingLeft.Always 8.1.2
        24 January 2023 at 9:34 am

        Now …where have I heard that kind of line before ? Oh..Right.

        Reckless…himself

        Labour-Greens electricity threats would destroy savings & jobs

        https://www.beehive.govt.nz/release/labour-greens-electricity-threats-would-destroy-savings-jobs

  9. Gosman 9
    24 January 2023 at 8:21 am

    Inflation is an increase in the money supply in the economy without a corresponding increase in economic activity. The main culprit behind that is the Reserve Bank and whoever is directing them.

    • Incognito 9.1
      24 January 2023 at 9:03 am

      The RBNZ is independent, so who is directing them? Nothing but insinuations, which is your MO.

      • Gosman 9.1.1
        24 January 2023 at 10:37 am

        The government is directing them with their changing of the focus of the RBNZ target.

        • Incognito 9.1.1.1
          24 January 2023 at 10:27 pm

          What change?

          When did this happen?

          How often does this happen?

          What was the rationale?

          Who sets the Official Cash Rate in NZ?

          How often?

          Who directs this?

          How?

    • Tiger Mountain 9.2
      24 January 2023 at 10:27 am

      Gosman drops another floater in the pool.

      This perfect storm of the last year or two is down to the COVID supply chain disruption and finance capital opportunism which has seen capital basically trousering the increased money supply in certain sectors, and massive price gouging of consumers.

      • Gosman 9.2.1
        24 January 2023 at 10:40 am

        In which case inflation should slowly disappear on it's own and their is no need for any organisation or individual to do anything as the supply problems will slowly work their way out of the system. Remember inflation is a problem when it is a persistent increase in prices not merely one off shocks to the system.

        • lprent 9.2.1.1
          24 January 2023 at 2:50 pm

          It is a supply shock situation imposing on top of structural one. Exterior shocks are mostly what is pushing the cost inflation that teh RBA is concentrating on with interest rates rises to make money more expensive. Including housing rental and mortgage costs – the largest cost to individuals and families.

          The structural problem is that we also have a period where population employment participation is very high, especially for skills. But we can’t afford high immigration because that pushes housing costs as we still have a significiant backlog of a housing shortage and excessive housing costs.

          Price inflation + employment shortages + persistent housing costs will cause pressure to raise wages.

          The basic structural problem is that during Nationals lazy terms in office they concentrated on tax cuts rather than making sure that there was the housing infrastructure for the massive migration that they encouraged to increase the tax base. So when we have external inflationary shocks, there is little economic room to move.

          The Labour government had 2018 and 2019 to start to try to correct that structural issue, then they caught a bit more than 2 years of an external pandemic, and this year with the cost inflation incoming.

          It will take a few years to work the existing inflation through, while hoping like hell that we don’t gte more coming in from offshore and we don’t get a building bust that stops us from killing National’s housing shortage.

    • Nic the NZer 9.3
      24 January 2023 at 11:08 am

      "Inflation is an increase in the money supply", said no serious recent economist.

      Inflation is a sustained increase in the price level.

      • Gosman 9.3.1
        24 January 2023 at 11:13 am

        That's funny because that is why we task the Reserve bank to tackle inflation. The Reserve bank is restricted to controlling the money supply to manage that. If no serious recent economist is saying that inflation is around money supply growth why are none of them (that I am aware of) suggesting we ditch the RBNZ role in tackling inflation?

        • KJT 9.3.1.1
          24 January 2023 at 7:03 pm

          Actually more than a few "serious economists" are critical about the ideas behind the RBA.

          You need to expand your reading. Von Mises, Ayn Rand and the Chicago school, are not the entire pantheon of economic thought.

          • Gosman 9.3.1.1.1
            24 January 2023 at 7:20 pm

            Why has the Labour party not ditched the inflation target from the Reserve bank act?

            • KJT 9.3.1.1.1.1
              24 January 2023 at 7:24 pm

              The neo-liberal religion still persists.

              • Gosman …
                24 January 2023 at 7:43 pm

                Amazing that something that you think is quite obviously false can have such a hold over a political party like Labour which is meant to be attracting people like you.

        • Incognito 9.3.1.2
          24 January 2023 at 10:38 pm

          Crikey, that’s too difficult and I’ll have to consult my ChatGPT on that.

          Bummer! It crashed (Fatal Error In Stack Overflow) when I typed in “Gosman” and “serious economists” crying

        • Nic the NZer 9.3.1.3
          25 January 2023 at 9:38 am

          Not sure why your having trouble understanding the distinction.

          The RBNZ looks at the CPI as an inflation measure. The CPI measures price level changes.

          Where as the way you put it makes a definition, inflation is any increase in the money supply. There is an idea of a correlation between these but if your a serious economist you ought to be aware of concepts which require measured evidence of their truth value.

          The evidence is not there for this one and the RBNZ gave up quantity targets circa 1986, if it actually tried them seriously before (this idea just didn't work). The RBNZ policy rate is an interest rate at which they will lend as much as needed.

    • adam 9.4
      24 January 2023 at 12:03 pm

      Yeah right Gossy, nothing at all to do with the war, the slow down of trade, covid, other world events, demographics, or greed.

      This is why any one who has a rational brain can't vote natact, they will destroy the economy in the name of purity within weeks if they get the reigns of power.

    • Incognito 9.5
      24 January 2023 at 1:05 pm

      Did you get that description of inflation from an old economics textbook for secondary school students by any chance? Your simplistic reckons show a profound lack of understanding and knowledge and/or of a disingenuous agenda of obfuscation.

    • KJT 9.6
      24 January 2023 at 3:05 pm

      The main culprits are excess profit taking suppliers and non productive rent seekers like, banks, property speculators and landlords, along with oil companies.

      But. You know that perfectly well.

      The reserve bank is responding by killing the productive economy, and disadvantaging the people who the economy is supposed to serve, because their absurd enabling ACT, requires them to protect rentiers, FIRE, sectors of the economy by attacking those who do productive work.

      • Gosman 9.6.1
        24 January 2023 at 3:18 pm

        If you are correct (which you aren't) then why are pretty much ALL parties in Parliament (even the Greens) broadly supportive of the RBNZ having an inflation target. If you are correct then there is very little the Reserve Bank can do to manage inflation and therefore the target should be removed.

        • KJT 9.6.1.1
          24 January 2023 at 6:58 pm

          I note your expressing an opinion which is contradicted by the evidence.

          Including the idea that the Greens are supportive of the RBA.

          And yes. The RBA will depress wages and productive activity, but not underlying inflation, which is imported.

          http://kjt-kt.blogspot.com/2013/05/the-reserve-bank-debt-and-property.html

          In New Zealand we have the "Reserve Bank Act".
          Which basically requires the reserve bank to kill the rest of the economy, whenever Auckland house prices, or wages, rise.

          In fact the rise in interest rates will also be inflationary.

          Reflecting the oft quoted right wing mis representation about taxes and a bucket.

  10. Gosman 10
    24 January 2023 at 8:30 am

    If the analysis by the CTU was correct (it isn't by the way) then it is a stunning indictment on the current government as it was they lack of urgent action on any of the areas mentioned they has led to the situation we are now in.

    • Incognito 10.1
      24 January 2023 at 9:04 am

      Typical libertarian response, you want your sardine cake and eat it but no effort put into it at all, which is your MO.

      • Gosman 10.1.1
        24 January 2023 at 10:35 am

        What do you mean no effort? The CTU thinks the problem with inflation is caused by supply issues in the economy (which it is not to any significant degree) and the government should target this to tackle inflation rather than other methods which is likely to lead to more economic pain for those at the lower end of the economy.

        The current government (which the CTU generally supports and is closely associated with) failed to deal with these issues for the past 5 years and doesn't look like it will do so in any significant way now.

        • Stuart Munro 10.1.1.1
          24 January 2023 at 11:23 am

          The CTU thinks the problem with inflation is caused by supply issues in the economy

          It's interesting that you should say so, because they don't. What they say is:

          It’s the result of weak and deregulated supply chains collapsing because of COVID, of an overreliance on oil that skyrocketed in price because of a war on the other side of the world, of property speculation that went unchecked and rents that were uncontrolled, of a supermarket duopoly that makes at least twice as much profit as is normal for the international supermarket sector, and of financial institutions stripping billions of dollars in profit every year.

          In short, not supply issues in the economy. External cost increases and unregulated avarice. Are you trying to misrepresent their position, or did you simply not understand? Courses in remedial reading are available.

          • Gosman 10.1.1.1.1
            24 January 2023 at 12:56 pm

            Ummm… those are mostly on the supply side of the economy. Supermarket, Landlords, Distribution, and Oil production are all related to supply not demand. The only ones that aren't are property speculators and financial institutions neither of which there is evidence for them causing inflation. How financial institutions "stripping billions in profit every year" is meant to lead to higher inflation is not explained. Perhaps you could detail the mechanism for how we have higher prices as a result of this.

            • KJT 10.1.1.1.1.1
              24 January 2023 at 3:07 pm

              So. If you own a business. You don't put prices up when your interest rates and rents double?

              Sure.

              • Gosman …
                24 January 2023 at 4:16 pm

                Why do you think the RBNZ raises interest rates to try and lower inflation? If your logic was correct (which it isn't) then raising interest rates would cause HIGHER inflation.

                • KJT …
                  24 January 2023 at 7:09 pm

                  Having to pay up to 26% mortgages had no effect on wage demands and price increases in the 80's.

                  Pull the other fucking leg, again!

                • Incognito …
                  24 January 2023 at 10:58 pm

                  You are not really that ignorant, so you must be trolling again.

                  The RBNZ target range for inflation is between 1 and 3% with a mid-point of 2%.

                  Why do you think this is the case?

            • Stuart Munro 10.1.1.1.1.2
              24 January 2023 at 5:30 pm

              No evidence of property speculators causing inflation eh. You have to be looking the other way mighty hard to maintain that fiction.

              • Gosman …
                24 January 2023 at 7:17 pm

                We've had property speculators running rampant in NZ for much of the 2000's. How did they impact the inflation rate?

                • KJT …
                  24 January 2023 at 7:58 pm

                  The house price inflation, pass you by?

                  • Gosman …
                    24 January 2023 at 8:07 pm

                    Did you miss the underlying inflation rate being below 3% for the majority of that time period?

                    • Stuart Munro …
                      24 January 2023 at 8:47 pm

                      So our economy was essentially moribund – tell us something we didn't know. For all the neoliberal talk of growth, they were mighty reluctant to bring in the policies that would have produced it.

                    • Gosman …
                      25 January 2023 at 12:02 pm

                      Ummm… no. The economy has performed quite well over the past decade and a half.

        • Incognito 10.1.1.2
          24 January 2023 at 1:18 pm

          What I mean by effort is that you lift a finger, and you lift your game here. If not, I will moderate you, again, and most likely with a ban this time.

          The CTU is in good company in its thinking about the causes of inflation. For example:

          Supply-chain and war-related disruptions will continue to be important determinants of the future path of inflation.

          RBNZ Monetary Policy Statement August 2022 (https://www.rbnz.govt.nz/-/media/2e7d3800e1b5463bb1f4dcaace23c3d7.ashx)

  11. Tiger Mountain 11
    24 January 2023 at 10:18 am

    The NZCTU has been significantly missing in action ever since Helen Kelly’s unfortunate departure. And it was MIA before Helen too! A significant class error of the late 20th century was forming the CTU and ending the more fighting NZFOL.

    The ‘theory’ from Ken Douglas was “tripartism”, “positive engagement”, “industry unions” and so on that would lead to a brave new world. The reality of the union busting ECA was that the bosses wanted no less than the total destruction, or at least marginalisation of organised labour. They almost got what they wanted except for the likes of NDU/FIRST, Unite, Etū, Munz, and the militant pockets of Teachers and Health Care workers.

    So considering that back drop, it is great to see Secretary Melissa Ansell–Bridges say these things. They need to be said daily on the media channels and enforced with direct action as can be organised.

    • Gosman 11.1
      24 January 2023 at 10:44 am

      Direct action by Trade Unions beyond supporting a pay and condition negotiation is not permitted under NZ law unless it just involves actions that do not disrupt operations of the businesses the Trade Union members work for.

      • Tiger Mountain 11.1.1
        24 January 2023 at 10:58 am

        It may be news to you Gossie (as my old friend TRP used to tag you) that NZ citizens actually have the right to exercise their freedom of speech, assembly and association regardless of employment legislation.

        Unions as registered entities do have a whole bunch of requirements such as bargaining time frames and notification and specifying in great detail any industrial action. Heh, but that is not my theme here.

      • lprent 11.1.2
        24 January 2023 at 2:19 pm

        I think that you have no idea about what the law is. Certainly you can’t express it. Using your interpretation of the law, since ‘Diect Action’ and ‘operations of a business’ could mean anything, then the following would be unlawful.

        • Writing a press release or informing ACC/MBIE about dangerous work conditions that an employer allows would be unlawful. That could disrupt the sales and marketing which is a operation of a business, or get ACC or MBIE disrupting the operations of a business.
        • Informing suppliers that an employer doesn’t pay their bills would be unlawful.
        • Informing transport companies directly or indirectly via media of possible future strike operations would be unlawful. These often happen outside of the scope of a negotiation.
        • Informing anyone that the employer doesn’t pay staff in full or regularly, and thereby disrupting employment operations would be unlawful.
        • Informing the police of banks or auditors or the IRD about financial improprieties would be unlawful
        • Recruiting members is a direct action.

        These are just simple examples of direct actions, all of which are perfectly legal activities for a union, union members, or anyone. Indeed many of them are legally desired activities. Most of which I have either read about in business news, court cases, or seen.

        If you want to make silly blanket assertions, then it might pay to actually use your brain a little next time.

      • KJT 11.1.3
        24 January 2023 at 7:11 pm

        So much for libertarian "freedom" eh?

    • Chris 11.2
      24 January 2023 at 11:30 am

      Too bloody right. And perhaps a new secretary has a better grasp of the importance of the need for unions to represent all workers, not just those in employment.

  12. Sabine 12
    24 January 2023 at 11:26 am

    Unless government – any government btw, starts regulating rent, food, energy you can not wage increase yourself out of poverty and / or inflation.

    Higher costs in production will lead to higher costs to the end consumer

    every time government increases benefits (not enough imho) landlords increase their rents

    every time a beneficiary/min wage worker/low income worker gets an accomodation benefit another landlord increases their rents cause the government provided

    The supermarket duopoly was supposedly looked at by the current Labour government, i guess it got put on the back burner, other issues more important than having affordable food

    youth unemployment sits at 9%, why is that? Does anyone care?

    under employmnet sits at 9% why is that, does anyone care?

    The current min wage sits at 21.20 NZD per hour, plus 8% holiday pay, plus sick pay for 10 days, plus kiwi safer contributions, ACC levies. That does not include the cost of hiring, training, providing a safe work environment, continous training to retain said employee etc. You can increase this to a base hour wage of 50 NZD and with your rent costing 1750 per week for a hole in a wall, you are still as poor as you were earning 9.50 NZD in 90s.

    • Tiger Mountain 12.1
      24 January 2023 at 11:54 am

      Such an array of photons from Sabine.

      Natzos/ACT will freeze minimum wage for three years according to what ACT have stated. So get real, stop whinging and start community organising.

      • Sabine 12.1.1
        24 January 2023 at 12:12 pm

        A. I propose that you don’t vote for ACT if you don’t believe in them.

        B. You demand that Labour finally does something that trickles down to those that might consider voting for N or A in order to prevent them from voting for N or A.
        You know all those that were properly left behind these last 2.5 years that Labour had a full majority which with it did nothing.

        I just pointed out a truth. You will never raise wages as high as the cost of living as every single time you do, the cost of living goes up. Someone finally in the lefty world needs to understand that unless you regulate nothing is going to change.

        • Tiger Mountain 12.1.1.1
          24 January 2023 at 12:46 pm

          Heh, what truth? capital is never going to self regulate. The bourgeois Parliament is not going to sufficiently control capital and finance capital either without lots of citizen pressure.

          Workers power is the only solution.

          • Sabine 12.1.1.1.1
            24 January 2023 at 1:53 pm

            I don't expect Capital to self regulate.

            I expect Government to regulate Capital.

            And any government that refuses to regulate Capital is part of the problem and an enabler of the excesses of capitalism.

        • Gosman 12.1.1.2
          24 January 2023 at 1:00 pm

          I love how many on the the left think they can control prices by regulation. It is like people thinking they can control the tides by building sand walls.

          • Tiger Mountain 12.1.1.2.1
            24 January 2023 at 1:22 pm

            Who holds class power is how it happens Gossie–and capital has had it for far too long.

            Change will happen via generational shift, younger and non white is where we are headed and more disruptive events–finance capital and environmental ructions.

            • Gosman 12.1.1.2.1.1
              24 January 2023 at 1:35 pm

              Where you are headed if you choose to pursue policies such as price controls is the same place other efforts have gone – the dustbin of economic failure.

              • Incognito …
                24 January 2023 at 11:07 pm

                You seem to know that dustbin inside out. Are you a failed Economics student or a business failure, by any chance? It would explain so much!

          • Chris 12.1.1.2.2
            24 January 2023 at 2:17 pm

            You sound as if you believe that the economic system we've adopted, how ever one may describe it, is a natural phenomenon.

            • Gosman 12.1.1.2.2.1
              24 January 2023 at 2:57 pm

              As much as human interactions are natural. Do you think activities such as sexual intercourse are natural or man made?

              • Incognito …
                24 January 2023 at 11:10 pm

                A bit of Zen for you:

                If you have sexual intercourse in the middle of a forest and there is no one else to witness it, then it is not sexual intercourse.

                Consider TS your forest and that we are not there to witness you.

          • Incognito 12.1.1.2.3
            24 January 2023 at 11:03 pm

            Of course they can! Do you still have shares in Telecom?

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