Daily review 05/04/2022

Written By: - Date published: 5:30 pm, April 5th, 2022 - 21 comments
Categories: Daily review - Tags:

Daily review is also your post.

This provides Standardistas the opportunity to review events of the day.

The usual rules of good behaviour apply (see the Policy).

Don’t forget to be kind to each other …

21 comments on “Daily review 05/04/2022 ”

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  1. Poission 1
    5 April 2022 at 5:49 pm

    Australian reserve bank today (like Japan) held interest rates.

    The reasonably low inflation figures (underlying 2.6 and headline 3.5%) were within the bounds of its mandate,along with employment.

    High macroeconomic indicators such as record trade and current account surplus (due to high export demand) low unemployment and internal migration patterns ,also sustained internal growth.

    https://www.rba.gov.au/media-releases/2022/mr-22-11.html

    • pat 1.1
      5 April 2022 at 6:13 pm

      Have a look at the fixed term rates….although lower than here (they always are) they still indicate the trajectory…..and remember theres an election due.

      The RBA may be expecting that they can delay until things break, and they may be right, but ultimately the ability to make good the promise is not there.

      • Poission 1.1.1
        5 April 2022 at 6:25 pm

        They also have a large local pond of cash flowing in on high export commodity prices.A lot being used to pay down debt and reinvest in expansion.

        The fixed term rates over there are still pricing in increases from future meetings.

        As an aside there is also a bit of Capital Flight of a different sort with migration from Melbourne and Sydney to regional centres.60K exit from Melbourne in 2021 put the breaks on residential demand.

        • pat 1.1.1.1
          5 April 2022 at 6:36 pm

          Yep .but they are an economy of houses and holes….and whats going to happen to commodity prices as recession hits more and more economies?…China certainly isnt looking like needing as much steel as previously.

          • Poission 1.1.1.1.1
            5 April 2022 at 7:11 pm

            China has moved its domestic program from housing construction to energy security including renewables,and more higher efficient transport such as trains (not planes) all need steel,as does the export renewable industry.

            So Australia gets to send 300 billion$ of dirt and coal to Japan.

            We get a tax cut into China on our toilet paper.

            https://www.channelnewsasia.com/business/china-cut-paper-and-wood-tariffs-new-zealand-april-7-2604631

            We also get to send milk and products due to the CCP of increasing vitamin D intake.

            • pat 1.1.1.1.1.1
              5 April 2022 at 7:18 pm

              Chinas demand for steel isnt likely to match previous, remembering the infrastructure build has been running alongside its massive overbuild of housing….and if the rest of the world are battening down the hatches then the price will ease to Chinas benefit.

              • Poission …
                5 April 2022 at 7:27 pm

                Overall demand will come down,however the huge cost increases in Europe ,will price european manufacturing down .

                https://twitter.com/JavierBlas/status/1510935689071845376?cxt=HHwWgICzmaCA9vcpAAAA

                Similar in aluminium,and sheet steel,your new European EV will cost 20-30% more.

                US manufacturing is more sustainable with gas and coal prices at around 25% of Europe.

                • pat …
                  5 April 2022 at 7:32 pm

                  You dont need to tell me about steel and ali price increases….however there is one sure fire result of that inflation….demand will crater, and the price will follow.

                  • Poission …
                    5 April 2022 at 7:41 pm

                    high prices are the best fix for high prices,however managed retreat is a more stable solution here with over capacity constraints in building supply say reducing productivity.

                    Our inflation rate is around 60% higher then Australia,we need to ask why.

                    • Tricledrown …
                      5 April 2022 at 11:48 pm

                      We import more and Australia imported migrant labour from the Pacific to keep food supplies up with demand.

                      Smart move as most Pacific Islands had no covid.

                      NZ could have done the same .

  2. weka 2
    5 April 2022 at 6:11 pm

    Can someone please explain to me what's gone on here? Herald link is paywalled so I've only read NRT's post. Quote is from NZH.

    Workplace Relations Minister Michael Wood wanted the Government to increase the minimum wage from $20 to $21.40, before Cabinet eventually worked him down to $21.20.

    A Cabinet paper shows officials from MBIE recommended an increase to $21- a real-terms pay cut for roughly 160,600 minimum wage workers, as the increase would have been lower than the rate of inflation. Wood overruled this in his advice to Cabinet, and pushed for a larger increase.

    Officials also presented Cabinet with a compromise option, which was to increase the minimum wage in line with the four-year average of annual increases under the current Government.

    This would have seen the minimum wage increase to $21.25. Instead, Cabinet opted to undershoot that and landed on an increase of $21.20.

    https://norightturn.blogspot.com/2022/04/what-is-wrong-with-labour.html

    • McFlock 2.1
      5 April 2022 at 6:43 pm

      I suspect the other arguments at the Cabinet table included inflation, alleged effects on the "labour shortage", and possibly a healthy dose of "won't anyone think of the homeowners".

      But it does stink of the old "offer the unacceptable so they'll 'compromise' on the merely detrimental" trick.

      • weka 2.1.1
        5 April 2022 at 6:54 pm

        ok. Breaking that down, is inflation an issue generally if the rate rises too quickly? Or is it more to do with economic conditions at this time?

        What are the alleged effects on the labour shortage?

        How does it harm homeowners?

        But it does stink of the old "offer the unacceptable so they'll 'compromise' on the merely detrimental" trick.

        How do you mean?

        • McFlock 2.1.1.1
          5 April 2022 at 7:51 pm

          Nic knows more about this stuff than me.

          AFAIK, Inflation is an issue if the rate itself gets to high – and there can be feedback effects, where it snowballs.

          Additionally, the lowest paid workers spend most of their pay immediately, so a big increase in minimum wage leads to more demand for those goods, which increases the price, and we have rising inflation.

          At the same time, we currently have a worker "shortage" because employers refuse to pay NZers a living wage. That makes things more scarce so drives up prices. I wouldn't mind, but the money ain't going to the hospo workers, it's going to the whinging hospo owners.

          Also, we have a supermarket duopoly and some supply-based shortages increasing inflation already (thanks, pandemic).

          Personally, I'd make the minimum wage a living wage and deal with the short term inflation effects. I think the country would be a happier place.

          Oh, and the unacceptable offer thing? If MBIE economists were playing shenanigans, low-balling the initial recommendation taking a cautious and responsible approach to establishing some of the underlying socioeconomic assumptions, in line with conventional thought at the time and relying on only the most robust and established of the available data widens the gap between the initial recommendation and the known preference of the minister and cabinet. This leaves them in the position of either completely rejecting the recommendation, delaying the decision, and giving "rejects expert advice" ammunition to the opposition, or they can fine some midpoint between the preferred option and the recommendation. "Yes Minister" rules.

          • Nic the NZer 2.1.1.1.1
            5 April 2022 at 8:15 pm

            Most of the thinking around wages and inflation is pretty straight forward. Its just that businesses paying higher wages face higher costs and may compensate that by putting up prices. If workers can then retaliate by demanding higher wages then you could get a wage/price spiral (which happened in the 70s following on from OPEC oil price hikes). These days with limited union membership and casualisation it seems a lot more likely that workers demands for wage rises in a lot of sectors are ignored.

            The often held assumption that workers will successfully bargain for real wage levels they are worth, usually does the job of obscuring the historic shift in the wage/capital share and that in many businesses they could easily wear lower payments to capital and still have it be well worth investing.

    • Nic the NZer 2.3
      5 April 2022 at 7:43 pm

      Not sure if this is the question but I can explain what the terms mean.

      First off, real, is referring to a change relative to the inflation rate. Someone's real wage falls when the quantity of actual goods and services it purchases declines. Most typically this happens because someone gets a below inflation pay rise. Of course the caveat here is that price changes doesn't necessarily effect all the actual purchases made evenly.

      Before looking at productivity the wage/capital share is relevant. At least as a whole all businesses either pay wages or capital all of the income they receive (or retain earnings). This happens in aggregate because the only other entity which gets paid is another business, which does the same. The wage/capital share looks at how much income goes to wage earners and how much goes to investors. There has been a general trend for capital to earn more since the 80s.

      Productivity measures generally how much income is earned for how many goods and services. A change in productivity could mean many changes. One possibility is that the wage earners are working harder across the same time (like more customers are in a retail store), another is they are delivering the same services in less time. Both these changes can increase a business overall income. So when we talk about productivity increases leaving space for wage increases this is because when a business distributes that extra income from productivity + inflation price changes to workers as a wage increase, then the wage/capital share doesn't change (at least for that business).

      Generally when thinking about productivity increases driving wages up we are thinking about the other side because the country is supposedly delivering more goods and services to people. This is to some extent true, though ultimately not every increase in spending is making a person better off.

      Who knows what the thinking is around the Cabinet table. Inflation will likely be part of it with the underlying assumption that wage increases are strongly likely to keep the inflation rate up. The background belief behind this is that workers don't allow their real wages to fall, instead they trade off their wage rate against their leisure time (also known as unemployment), which is patently untrue. But I doubt that that mainfest's as more than prejudice in a Cabinet level policy discussion.

  3. Anker 3
    5 April 2022 at 6:47 pm

    https://www.dailymail.co.uk/femail/article-10685753/Becoming-man-huge-mistake-DID-doctors-allow-Glasgow-woman-asks.html

    young woman transitioned at 21 years. Now regrets it aged 28 years old. She has had a double mastectomy and testosterone has given her facial hair and a deep voice. She is angry with the Drs who enabled this….

    No stories like this in the NZ press, yet we know there are de-transitioners here

    • Puckish Rogue 3.1
      5 April 2022 at 7:02 pm

      Fortunately there are more people coming forward to tell but not in NZ yet…

      • Anker 3.1.1
        6 April 2022 at 11:47 am

        That is a really great interview. This young woman describes really well how the process of transition took a hold on her. Her vulnerability factors (having few friends) and then joining an on-line group who encouraged her transition.

        How taking the testosterone lead to two hospital admissions. And still no medical people queried why she was on such a high dose. She is lucky that she was able to come to her own realisations that she wasn't male but female, before she had surgery.

        And she describes hostility and denial from the community who encouraged her transition when she wanted to reverse it.

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