web analytics

Fixing the reserve bank

Written By: - Date published: 1:14 pm, April 29th, 2014 - 32 comments
Categories: act, don brash, Economy, labour - Tags:

It has been pretty obvious for quite some time to most people that the Reserve Bank system that NZ uses needs fixing. The way it operates right now is pretty ludicrous. The economy heats up for any reason, the Reserve Bank detects a forthcoming threat to the inflation rate, they put up the OCR which in turn pushes up interest rates and dampens out the local demand that drives local inflation.

So far so good. But it doesn’t end there and only a simpleton (Don Brash comes to mind) would think that it did. Problem is that we live wide open and exposed to the world.

So having high real interest rates in a relatively stable country gives a few other effects. Hot money roars into the country looking for something to buy. It discovers relatively risk-free property and prosperous companies. It buys those and on the way through it manages to kickstart more inflation by pushing more money into the economy for consumption. The level of hot money looking for a quiet home also drags the exchange rates up thereby pricing our exports off world markets.

Gordon Campbell on Labour’s new monetary policy:-

The main dimension of Labour’s policy is to offer an alternative to the current reliance on interest rate hikes; mainly, by requiring higher contributions to Kiwisaver, as an inflation fighting tool.

We’re going to give the Reserve Bank another mechanism, which is a variable savings rate through KiwiSaver. The Reserve Bank will be able to keep its inflation anchor but instead of that money being lost to you in higher interest rates it will go into your savings. The benefit for the export sector is instead of jacking up interest rates and pushing up the exchange rate you will still control inflation but you’ll have lower interest rates and a better exchange rate.” Mr Parker said it would apply to working people but it would consider excluding those on the lowest incomes.

Right. Instead of paying higher interest rates to Aussie-owned banks and seeing those profits flow offshore, the Labour plan would channel those funds into domestic savings, and take a lot of the current speculator-driven pressure off the exchange rate. Even at the highest rates of Kiwisaver contributions envisaged by Labour, as Guyon Espiner pointed out on RNZ this morning, this would still be well below the level of compulsory superannuation contributions in Australia.

What does this mean for wage earners? Well No Right Turn takes the downside of it.

Which, combined with their universal Kiwisaver policy means that their “solution” to inflation is automatic universal wage cuts. So, when prices are rising, ordinary people will have less money in their pockets to pay for stuff. Thanks, Labour!

And this is exactly right. However that is exactly how you have to control inflation. The best way to stifle inflation is that you remove money for immediate consumption from the economy. In the old Reserve Bank way, this would mean higher interest rates. In this case through enforced savings, as he acknowledges.

Its a bit more complicated than that, of course, in that savers will get their money back in the long run. What it really does is redirect money from higher mortgage payments to an Aussie bank to your future self. But the immediate effect is the same: less money in people’s pockets while prices are rising. And the effect will be felt most by those who do not contribute to the problem: young people without mortgages. Somehow I don’t think they’ll be thanking Labour for this policy.

But just as importantly, for those younger people it will keep mortgage rates down and has a pretty good chance at least partially constraining the property bubble over the longer term.

Now as an aside Gordon Campbell points out the interesting political consequences of this.

English’s comments were a reminder of what has been a largely hidden dimension of this year’s election strategising. Clearly, a high exchange rate serves the political interests of the Key government, by protecting it from the immediate fallout from a lower exchange rate: which would include, for example, higher petrol prices at the pump, and higher prices for consumables. Most voters are consumers, not exporters – and thus, keeping the dollar aloft serves as a form of Muldoonist economic populism that John Key and Bill English seem very happy to embrace. Cheaper imports underpin spending in the local economy. (On the side, it also makes the imported component of our exports that much cheaper.)

So far, so good, so unsustainable. In a modern economy, no country can afford to put the interests of consumers ahead of its exporters, long term. At 85 cents to the US dollar, the pain currently being inflicted on our exporters is such that it exceeds any gains in efficiency they’ve been forced to make in order to survive. Sooner or later, the government is going to have to look beyond its own short term political interests, and start to govern in the interests of the country. For now – and just as it has done with respect to the age of superannuation entitlement – Labour is playing the role of the unwelcome guest that has to remind voters that the current policy settings cannot endure. In the old fable, the grasshoppers were more popular – but the ants had the better strategies for survival.

You don’t need to tell me that. For the last couple of decades I’ve worked most of the time in tech companies that do more than 90% of their sales offshore. One of the biggest problem has been the complete instability of the NZ currency compared to almost all of our trading partners. It helps a little on components but most local cost is in wages. But the instability of the currency is such that it often better to push the production offshore so the costs components and relatively unskilled labour don’t vary as much as they do in NZ, while keeping the skilled designers here. That way you keep most of your production risk in stable currencies (ie not the NZD), which are usually the same ones you are paid in like USD.

Your designers are paid local wages and have a low risk exposure to the exchange rate. But for designers to lose touch with the production systems means that eventually the imperative to move more of them offshore gets higher as well. So we lose another company.

But as those damn late night ads used to say “but there’s more”. No Right Turn again…

The non-headline stuff is where the real meat in the policy is. First, amending the Reserve Bank’s purpose to manage the balance of payments. There’s a consensus on the left that there needs to be some amendment, but whether it should include employment, the exchange rate or the balance of payments is disputed. Whichever it ends up as, it means the Reserve Bank will have to think about the consequences of its interventions, and should stop them from Brashing the economy to target a single part of it.

The head of the reanimated corpse of Brash should now be spinning furiously along with those fools from ACT who are into simplicity (because they can’t handle the real world). Having to deal with more than one objective! We don’t want to burden the poor economists at the RB with too much to consider. However looking the balance of payments is pretty good. It includes the exchange rate and the export economy.

Secondly, there’s a commitment to “[take] the pressure off the Reserve Bank’s OCR by using government policy to address the sources of inflation in the non-tradable sector”. I suspect this is the bit which is going to be doing all the heavy lifting. The core drivers of inflation are house and electricity prices, and Labour has strong policies to target both (Kiwibuild and a capital gains tax; NZPower). Deflating the housing market by taxing the crap out of speculators and increasing supply to the people who need it should remove the need for the Reserve Bank to intervene in the first place. So we might not need their economic sadomasochism after all.

The do-nothing government movement loses its do-nothing figleaf because it is cannot shove everything off to the Reserve Bank. They’re effectively now concerned with the exterior economy. The government becomes largely responsible for the rigidities of internal economy. That is a pretty good mix.

Of course it does rather leave up in the air the ability of MPs to take on the task. Currently I can’t think of many in the current National or Labour with a good track record of solving structural blockages locally. In fact the only one I can think of offhand is David Cunliffe with the Telecom breakup.

32 comments on “Fixing the reserve bank ”

  1. Colonial Viper 1

    And this is exactly right. However that is exactly how you have to control inflation. The best way to stifle inflation is that you remove money for immediate consumption from the economy.

    Don’t think so, you are only looking at one side of the equation. Under this system the poor get hit when inflation is running high and their benefits/minimum wage does not keep up. But to keep inflation low you hit the poor by taking money out of their income so they can’t spend it. So they get hit over and over again.

    Now lets look at a historical example. In the 1950’s and 1960’s workers incomes were increasing rapidly such that there was a new burgeoning middle class with increasing incomes, much better off per capita than ever before.

    BUT no rampant inflation? Why? Because the other factor which controls inflation is productivity of manufacturing, competitiveness of supply and having spare productive capacity on hand to soak up increased demand.

    So let’s get serious about what the current style of inflation control is all about. It’s about rationing downwards the amount of products and services that the poor are permitted to access, while preserving the buying power of those sitting on lots of capital.

    Which is very useful in a world of depleting resources where the 0.1% are very concerned that their paper wealth might suddenly not be worth more than the sheets it is printed on.

    • lprent 1.1

      BUT no rampant inflation? Why? Because the other factor which controls inflation is productivity of manufacturing, competitiveness of supply and having spare productive capacity on hand to soak up increased demand.

      Mostly there were a whole lot of kids. If you ever look at the economics of the 50s-60s in NZ what you find are immense building programmes for thing like schools, suburbs, roads, etc as people poured into the cities and had children. At a family you find the same thing with fridges, washing machines, rumpus rooms, etc. Damn near every country that wasn’t in abject poverty had a population boom after WW2, and it lasted to the 70s.

      Most of the time the capacity was literally built just in time to satisfy the demand. And of course we had some obvious labour supply rationing. Few women worked but a lot of them could and often did. They went out and worked whenever the wages got good enough.

      Plus of course we and most countries had closely controlled currencies and licensing for imports. They were effectively partially sealed at the borders. That meant that if you look at the balance of payments for NZ in the 50s and 60s they were small compared to the rest of the economy. They aren’t now because we’re now a full-blown trading economy.

      In the current rapidly greying world of those kids from the 50s and 60s in most developed world from the US to China, and with few constraints on the transfers of money, then what you have is excess savings sloshing around the world looking for a reasonably safe place to land.

      The population is pretty stable compared to the rate of growth we had back then. We could try more immigration as a system. But we have problems fulfilling our current limits when competing with other locations.

      If we locked our borders, then it will take us at least 20 years to develop a internal economy to replace the external trading. Basically we’d have to do a more gentile version of year zero in 1979 cambodia.

      • Colonial Viper 1.1.1

        So you know what is weird about what you just wrote?

        So in the 50’s and 60’s there was a big boom in the number of kids, lots of building activity, families feeling wealthier and spending it on homes and things for the home, the economy barely keeping up with spending demand, lots of trade barriers…YET (and this is my point) no skyrocketing inflation, no excessive profiteering, no tolerated price gauging.

        This is what I mean. A productive economy which makes stuff, is competitive, and is happy to supply the necessities of life to ordinary people without making a gouging profit margin on everything, limits inflation perfectly well.

        Further, you describe how there is all this excess global hot money looking for places to invest and cause asset price hikes. Agreed. Yet instead of causing that global capital pain in order to control price increases we’ve decided once again to target the pain at workers and the poor.

        It’s not good enough.

        • One Anonymous Bloke 1.1.1.1

          Wait a sec. If the reform is going to reduce incentives for capital gain and speculation in favour of investment in manufacturing and “human resources”* how will that kill the poor? Please forgive my ignorance.

          *Will someone bring me the head of the person who coined that atrocious blather?

        • lprent 1.1.1.2

          If you know some magic way to get people to breed, then do so. The nearest we ever got to it in my adult lifetime was after working for families started kicking in.

          The point I was making was that you get very limited inflation when there is a pretty specific long term process of infrastructure investment in a relatively closed economy because it is relatively easy for the government to speed up or defer investment. It is damn hard to do the same after the infrastructure has been built because most of what is built is of limited economic value (think “Think Big”). It is also very hard to do when you don’t have barriers to the economy (we don’t). It is also very very hard to do when you don’t have the required industry in place to build it (just look at how hard it is to concentrate a build force for ChCh – would have been a trivial task 40 years ago). It’d take 20 years to put the latter back into place.

          In the meantime we’ve hit the end of the utility of the OCR for inflation control. They’re extending to toolkit to compulsory savings which over the longer term and with the greying population is going to benefit most of those who have to do it. The alternative is to raise OCR rates and for people not to save and to see the money flow out of the country. Which do you think is the worse of those two alternatives?

          I haven’t seen anything else that I’d consider more effective way of retaining that capital in NZ.

  2. greywarbler 2

    cv
    You might have cracked it there.

  3. Disraeli Gladstone 3

    To me, NRT is right in saying that it’s the younger generations that are going to be hit by compulsory Kiwisaver with the potential for rising contribution rates. Not only are they not really part of the problem with having no mortgages, they’ll also be wanting to pay off their student loans as well. Interest free or not, a student loan is becoming more and more of a shackle and graduates should be allowed to have the choice of using their savings to pay off their loans.

    Ugh. I like the less flashy part of Labour’s policies, but I could really only support a compulsory Kiwisaver with various exceptions for people struggling and for students with debt.

    • Naturesong 3.1

      Easy fix.

      Invest in New Zealand;
      Scrap student loans and make education free for New Zealanders again.

      • One Anonymous Bloke 3.1.1

        +∞

      • Disraeli Gladstone 3.1.2

        Agreed.

        But we all know Labour won’t do that, sadly.

        • Lanthanide 3.1.2.1

          I think it’s proper that a student loan, which allows for education that benefits both the individual and the community, is paid for by both the individual and the community.

          I think the current scheme is about right.

          • Colonial Viper 3.1.2.1.1

            Good if you study something which corporate money values Lanth. The things that society really needs to prosper – an understanding of theatre, language, literature, music, all those things can go into the financial bin.

            • Disraeli Gladstone 3.1.2.1.1.1

              Exactly. University has become a way to get a job. Which is fine, for some. However, university should also still be about education and becoming a well-rounded person. And as we make education more market-oriented, we move further and further away from that ideal.

              It’s also all well and good for a bunch of middle-aged politicians and pundits to talk about “proper” when we all got our education for free.

              • McFlock

                the other point is that ongoing training also has value for the coutry as well as the individual, not just a one-off degree. Placing a maximum on loans is stupid, from that perspective.

                • Disraeli Gladstone

                  Oh, I agree. I said in the other thread for this policy that of all National’s policy for their last two terms, the restriction on adult learners is the worst. Asset sales are flashy and emotional, but hitting people’s ability to retrain in an evolving world is downright cruel.

                  • blue leopard

                    +100 Disraeli Gladstone

                    Although I think that the way those on welfare have been treated is worse […yet there is even more likelihood of getting stuck on welfare if you can’t afford to retrain….]

          • One Anonymous Bloke 3.1.2.1.2

            Yes, no overt right-wing narrative going on here at all, move along.

            “Proper” gave you away, Lanth. Fuck your proper, what works (pick any reliable measure you want) best?

          • McFlock 3.1.2.1.3

            But a loan reduces the incentive to get the education – funny how the articipation rate in tertiary education rate is falling.

            Great for the knowledge economy, that /sarc

  4. Ray 4

    Well I that it is an interesting way to control inflation and it is time we had a conversation about that possible problem
    All that lowering the dollar will do is put more money in farmers and export business pockets, ok a lifted tax rate will maybe fix that but the rest of us face lifted costs thanks to fuel prices
    It was all very well David Parker saying fuel prices are based on oil prices but they will only go up if our dollar has to fall in relation to the US $ and the Greens Peak Oil arrives at the same time

    Not sure how compulsory saving for old age is going to help those on hard low wage jobs especially if the age to get it keeps on rising

  5. aerobubble 5

    Trish Sherson, from ACT, said that its good that housing and the dollar are over priced, totally ignoring the GFC that crashed economies with high debt, high house prices. Its truly imagination that sees anyone commenting on the economy who then totally ignores the printing that is actually pushing up demand in our economy. Demand that needs exchange in return, that has kept our low value primary goods flying offshore. Our economy is not strong, we’re just temporary meat to chew on until the world economy fixes itself, and then we are in for one almighty collapse (as other timber, milk, etc gets flowing) and on top Key’s running up government debt, just icing on the avalanche. So for Trish Sherson to say on Politics on Nine to Noon, that our economy is string is just so dull and boring, as well as not true.

    And now this, http://www.scoop.co.nz/stories/PA1404/S00405/parker-wrong-nine-times-in-one-interview.htm. Clearly National have no clue they think our current growth from the bottom of the GFC is a good look, when anyone with an ounce of economic credibility is worried about the diaster Key is heading us for. They never were forced to declare the reasons why the GFC happened so low and behold they now can smarmy the spin and ignore its effects for the last six years.

    Unless we start clawing some of the profit back into savings, switch out of the low commodity economy into a high value economy, unless we disincentives sloth in our managing classes and re-educated them about the wider effects of the global economy. Its banking collapse would be a good starting point….

  6. Tangled_up 6

    “What it really does is redirect money from higher mortgage payments to an Aussie bank to your future self. But the immediate effect is the same: less money in people’s pockets while prices are rising. And the effect will be felt most by those who do not contribute to the problem: young people without mortgages.”

    With the current system does the cost of higher mortgage rates not get passed onto young people without mortgages (renters) also?

    • With the current system does the cost of higher mortgage rates not get passed onto young people without mortgages (renters) also?

      Very diffusely. There are long lag-times due to fixed mortgages and the Residential Tenancies Act, and many older rental properties are freehold anyway, meaning that they’re simply not affected. Which acts as a check on the ability of others to recoup their increased costs. Whereas variable mortgage rates go up within a week.

    • You_Fool 6.2

      Yes, but in a less transparent manner. Rent prices are “market based” and are therefore theoretically don’t rise and fall with interest rates.

      Of course in real life interest rates go up, rents go up. Rates come down rents stay the same until next time rates go up.

  7. blue leopard 7

    Thanks for this article lprent,

    Like others have commented (on other threads) it is pretty hard to get one’s head around financial policies and their ramifications and you have provided some explanation on these matters.

    I hope you do more of the same. 🙂

  8. Huginn 8

    Thanks for this
    I’ve noticed that National’s open support for a high exchange rate seems to be shifting to the centre of their economic strategy. They really need to be called out on it.

  9. Ad 9

    Everyone in an armchair wants structural change.

    The political sweet spot is to find structural change that people like.

    I wouldn’t go any further than they have on this- the one structural shift I think Labour is capable of doing (inside the caucus they have) is housing. Meaning: shifting New Zealanders into investing away from housing and towards more productive assets, while supporting more housing being built. They will use a wide range of tools and incentives, but they are as close to a sweet spot as they are going to get.

    It hits in the centre of the tennis raquet of bourgoeise mortgage belts, political and financial banking commentariat, MSM commentators (so far), and likely coalition supporters.

    Our addiction to housing as a form of capital is the one structural shift they can and should make in a first term.

    • Colonial Viper 9.1

      Our addiction to housing as a form of capital acceptable as financial collateral is the one structural shift they can and should make in a first term.

      Just clarifying. However I don’t think that this can be done in one term as it is the retail banks which gives housing the financial prominence it has, and they do that because of how profitable fuelling housing asset price bubbles is to them.

      • Ad 9.1.1

        Check how much the low-end mortgage market has shifted in just one quarter.
        This is pushing through an open door.

  10. captain hook 10

    check out tranny whipped paul henry using his gig on tv3 to push the national party barrow. he mouthing off about being forced to save but he doesn’t have the mental equipment to understand about being forced to give money to banks. you know, shifty’s mates. he is just another dweeb who needs money to make himself feel like he is somebody when all he is is a big mouth almighty with too much stuff.

  11. lurgee 11

    Not exactly germane, but I’ve always been in favour of compulsory Kiwisaver, and that a iwisaver account should be set up for every New Zealander at birth, with a government contribution, to establish something like the idea Tom Paine outlined in Agrarian Justice – a payment to every citizen on reaching maturity.

Recent Comments

Recent Posts

  • Prime Minister to visit United States
    Prime Minister to lead trade mission to the United States this week to support export growth and the return of tourists post COVID-19. Business delegation to promote trade and tourism opportunities in New Zealand’s third largest export and visitor market Deliver Harvard University commencement address  Prime Minister Jacinda Ardern ...
    BeehiveBy beehive.govt.nz
    7 hours ago
  • Prime Minister congratulates Anthony Albanese
    Prime Minister Jacinda Ardern has congratulated Anthony Albanese and the Australian Labor Party on winning the Australian Federal election, and has acknowledged outgoing Prime Minister Scott Morrison. "I spoke to Anthony Albanese early this morning as he was preparing to address his supporters. It was a warm conversation and I’m ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Poroporoaki: Dame Aroha Reriti-Crofts DNZM CBE JP
    Tiwhatiwha te pō, tiwhatiwha te ao. Tiwhatiwha te pō, tiwhatiwha te ao. Matariki Tapuapua, He roimata ua, he roimata tangata. He roimata e wairurutu nei, e wairurutu nei. Te Māreikura mārohirohi o Ihoa o ngā Mano, takoto Te ringa mākohakoha o Rongo, takoto. Te mātauranga o Tūāhuriri o Ngai Tahu ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Boost for tourism networks as borders open
    Three core networks within the tourism sector are receiving new investment to gear up for the return of international tourists and business travellers, as the country fully reconnects to the world. “Our wider tourism sector is on the way to recovery. As visitor numbers scale up, our established tourism networks ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Law changes passed stopping tax evasion on water-pipe tobacco
    The Minister of Customs has welcomed legislation being passed which will prevent millions of dollars in potential tax evasion on water-pipe tobacco products. The Customs and Excise (Tobacco Products) Amendment Act 2022 changes the way excise and excise-equivalent duty is calculated on these tobacco products. Water-pipe tobacco is also known ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Government support for Levin community hit by tornado
    The Government is contributing $100,000 to a Mayoral Relief Fund to help the Levin community following this morning’s tornado, Minister for Emergency Management Kiri Allan says. “My thoughts are with everyone who has been impacted by severe weather events in Levin and across the country. “I know the tornado has ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Statement from the Quintet of Attorneys General in support of Prosecutor General Iryna Venediktova a...
    The Quintet of Attorneys General have issued the following statement of support for the Prosecutor General of Ukraine and investigations and prosecutions for crimes committed during the Russian invasion of Ukraine: “The Attorneys General of the United Kingdom, the United States of America, Australia, Canada, and New Zealand join in ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Andrew Little Budget 2022 post-Budget health speech, Auckland, 20 May 2022
    Morena tatou katoa. Kua tae mai i runga i te kaupapa o te rā. Thank you all for being here today. Yesterday my colleague, the Minister of Finance Grant Robertson, delivered the Wellbeing Budget 2022 – for a secure future for New Zealand. I’m the Minister of Health, and this was ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Govt helps supermarket shoppers get a fair deal
    Urgent Budget night legislation to stop major supermarkets blocking competitors from accessing land for new stores has been introduced today, Minister of Commerce and Consumer Affairs Dr David Clark said. The Commerce (Grocery Sector Covenants) Amendment Bill amends the Commerce Act 1986, banning restrictive covenants on land, and exclusive covenants ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Prime Minister: Wellbeing Budget 2022 speech
    It is a pleasure to speak to this Budget. The 5th we have had the privilege of delivering, and in no less extraordinary circumstances.  Mr Speaker, the business and cycle of Government is, in some ways, no different to life itself. Navigating difficult times, while also making necessary progress. Dealing ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Future resource management system implementation funding
    Budget 2022 provides funding to implement the new resource management system, building on progress made since the reform was announced just over a year ago. The inadequate funding for the implementation of the Resource Management Act in 1992 almost guaranteed its failure. There was a lack of national direction about ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Funding certainty for quality public media
    The Government is substantially increasing the amount of funding for public media to ensure New Zealanders can continue to access quality local content and trusted news. “Our decision to create a new independent and future-focused public media entity is about achieving this objective, and we will support it with a ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Funding boost secures Defence capabilities
    $662.5 million to maintain existing defence capabilities NZDF lower-paid staff will receive a salary increase to help meet cost-of living pressures. Budget 2022 sees significant resources made available for the Defence Force to maintain existing defence capabilities as it looks to the future delivery of these new investments. “Since ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Budget 2022 supports resilient and sustainable cultural sector
    More than $185 million to help build a resilient cultural sector as it continues to adapt to the challenges coming out of COVID-19. Support cultural sector agencies to continue to offer their important services to New Zealanders. Strengthen support for Māori arts, culture and heritage. The Government is investing in a ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Minister of Finance: Wellbeing Budget 2022 Speech
    It is my great pleasure to present New Zealand’s fourth Wellbeing Budget. In each of this Government’s three previous Wellbeing Budgets we have not only considered the performance of our economy and finances, but also the wellbeing of our people, the health of our environment and the strength of our communities. In Budget ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Wellbeing Budget 2022 Speech
    It is my great pleasure to present New Zealand’s fourth Wellbeing Budget. In each of this Government’s three previous Wellbeing Budgets we have not only considered the performance of our economy and finances, but also the wellbeing of our people, the health of our environment and the strength of our communities. In Budget ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Coronial delays addressed by Budget 2022
    Four new permanent Coroners to be appointed Seven Coronial Registrar roles and four Clinical Advisor roles are planned to ease workload pressures Budget 2022 delivers a package of investment to improve the coronial system and reduce delays for grieving families and whānau. “Operating funding of $28.5 million over four ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Paving the way for better outcomes for disabled people
    Establishment of Ministry for Disabled People Progressing the rollout of the Enabling Good Lives approach to Disability Support Services to provide self-determination for disabled people Extra funding for disability support services “Budget 2022 demonstrates the Government’s commitment to deliver change for the disability community with the establishment of a ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Investing in education so all Kiwis can succeed
    Fairer Equity Funding system to replace school deciles The largest step yet towards Pay Parity in early learning Local support for schools to improve teaching and learning A unified funding system to underpin the Reform of Vocational Education Boost for schools and early learning centres to help with cost ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Primary sector backed to grow and innovate
    $118.4 million for advisory services to support farmers, foresters, growers and whenua Māori owners to accelerate sustainable land use changes and lift productivity  $40 million to help transformation in the forestry, wood processing, food and beverage and fisheries sectors  $31.6 million to help maintain and lift animal welfare practices across Aotearoa New Zealand A total food and ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • More support for first home buyers and renters
    House price caps for First Home Grants increased in many parts of the country House price caps for First Home Loans removed entirely Kāinga Whenua Loan cap will also be increased from $200,000 to $500,000 The Affordable Housing Fund to initially provide support for not-for-profit rental providers Significant additional ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Budget lifts up to 14,000 children out of poverty
    Child Support rules to be reformed lifting an estimated 6,000 to 14,000 children out of poverty Support for immediate and essential dental care lifted from $300 to $1,000 per year Increased income levels for hardship assistance to extend eligibility Budget 2022 takes further action to reduce child poverty and ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • A booster for RNA research and development
    More support for RNA research through to pilot manufacturing RNA technology platform to be created to facilitate engagement between research and industry partners Researchers and businesses working in the rapidly developing field of RNA technology will benefit from a new research and development platform, funded in Budget 2022. “RNA ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Unleashing business potential across NZ
    A new Business Growth Fund to support small and medium sized enterprises (SMEs) to grow Fully funding the Regional Strategic Partnership Fund to unleash regional economic development opportunities Tourism Innovation Programme to promote sustainable recovery Eight Industry Transformation Plans progressed to work with industries, workers and iwi to transition ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Securing the wellbeing of Pacific communities
    Budget 2022 further strengthens the economic foundations and wellbeing outcomes for Pacific peoples in Aotearoa, as the recovery from COVID-19 continues. “The priorities we set for Budget 2022 will support the continued delivery of our commitments for Pacific peoples through the Pacific Wellbeing Strategy, a 2020 manifesto commitment for Pacific ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Government delivers timely support for whānau
    Boost for Māori economic and employment initiatives. More funding for Māori health and wellbeing initiatives Further support towards growing language, culture and identity initiatives to deliver on our commitment to Te Reo Māori in Education  Funding for natural environment and climate change initiatives to help farmers, growers and whenua ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Government delivers critical infrastructure
    New hospital funding for Whangārei, Nelson and Hillmorton 280 more classrooms over 40 schools, and money for new kura $349 million for more rolling stock and rail network investment The completion of feasibility studies for a Northland dry dock and a new port in the Manukau Harbour Increased infrastructure ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • A health system that takes care of Māori
    $168 million to the Māori Health Authority for direct commissioning of services $20.1 million to support Iwi-Māori Partnership Boards $30 million to support Māori primary and community care providers $39 million for Māori health workforce development Budget 2022 invests in resetting our health system and gives economic security in ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Investing in better health services
    Biggest-ever increase to Pharmac’s medicines budget Provision for 61 new emergency vehicles including 48 ambulances, along with 248 more paramedics and other frontline staff New emergency helicopter and crew, and replacement of some older choppers $100 million investment in specialist mental health and addiction services 195,000 primary and intermediate aged ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • A Secure Future for New Zealanders’ health
    Landmark reform: new multi-year budgets for better planning and more consistent health services Record ongoing annual funding boost for Health NZ to meet cost pressures and start with a clean slate as it replaces fragmented DHB system ($1.8 billion year one, as well as additional $1.3 billion in year ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Cost of living package eases impact on households – 2.1 million Kiwis to get new targeted payment
    Fuel Excise Duty and Road User Charges cut to be extended for two months Half price public transport extended for a further two months New temporary cost of living payment for people earning up to $70,000 who are not eligible to receive the Winter Energy Payment Estimated 2.1 million New ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Budget highlights underlying strength of economy in face of global headwinds
    A return to surplus in 2024/2025 Unemployment rate projected to remain at record lows Net debt forecast to peak at 19.9 percent of GDP in 2024, lower than Australia, US, UK and Canada Economic growth to hit 4.2 percent in 2023 and average 2.1 percent over the forecast period A ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Budget 2022: A secure future in difficult times
    Cost of living payment to cushion impact of inflation for 2.1 million Kiwis Record health investment including biggest ever increase to Pharmac’s medicines budget First allocations from Climate Emergency Response Fund contribute to achieving the goals in the first Emissions Reduction Plan Government actions deliver one of the strongest ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Budget 2022: A secure future
    Budget 2022 will help build a high wage, low emissions economy that provides greater economic security, while providing support to households affected by cost of living pressures. Our economy has come through the COVID-19 shock better than almost anywhere else in the world, but other challenges, both long-term and more ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Health Minister to attend World Health Assembly in Geneva
    Health Minister Andrew Little will represent New Zealand at the first in-person World Health Assembly since the start of the COVID-19 pandemic, to be held in Geneva, Switzerland, from Sunday 22 – Wednesday 25 May (New Zealand time). “COVID-19 has affected people all around the world, and health continues to ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • New efforts to counter illegal timber trade
    New Zealand is committing to trade only in legally harvested timber with the Forests (Legal Harvest Assurance) Amendment Bill introduced to Parliament today. Under the Bill, timber harvested in New Zealand and overseas, and used in products made here or imported, will have to be verified as being legally harvested. ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Deaths in New Zealand lower than expected so far during the pandemic
    The Government has welcomed the release today of StatsNZ data showing the rate at which New Zealanders died from all causes during the COVID-19 pandemic has been lower than expected. The new StatsNZ figures provide a measure of the overall rate of deaths in New Zealand during the pandemic compared ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • New law helps secure New Zealand’s maritime domain
    Legislation that will help prevent serious criminal offending at sea, including trafficking of humans, drugs, wildlife and arms, has passed its third reading in Parliament today, Foreign Affairs Nanaia Mahuta announced. “Today is a milestone in allowing us to respond to the increasingly dynamic and complex maritime security environment facing ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Trade and Export Growth Minister to travel to Bangkok for APEC
    Trade and Export Growth Minister Damien O’Connor is set to travel to Thailand this week to represent New Zealand at the annual APEC Ministers Responsible for Trade (MRT) meeting in Bangkok. “I’m very much looking forward to meeting my trade counterparts at APEC 2022 and building on the achievements we ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Government welcomes historic pay-equity deal
    Settlement of the first pay-equity agreement in the health sector is hugely significant, delivering pay rises of thousands of dollars for many hospital administration and clerical workers, Health Minister Andrew Little says. “There is no place in 21st century Aotearoa New Zealand for 1950s attitudes to work predominantly carried out ...
    BeehiveBy beehive.govt.nz
    6 days ago