NZ: No jobs, expensive housing, time to leave

Written By: - Date published: 4:26 pm, August 21st, 2024 - 63 comments
Categories: Economy, employment, RBNZ, superannuation, unemployment - Tags: , ,

It gets rather depressing reading the statistics on National’s induced recession as they steadily push New Zealand into stagflation. The Reserve Bank’s previously unsignaled OCR decision last week wasn’t a hopeful sign.

Rather than sticking to their planned reductions over the next couple of years, they would up responding to unplanned rapid increases in unemployment and slumps in demand. Kiwis have already recognised the failing economy – they are rapidly leaving.

If you want to look at why this was so unexpected by the RBNZ, then you don’t have to look further than an earlier denial of entering a stagflation economic cycle from RBNZ chief economist Paul Conway on the 19th of June.

The key part of the planned approach was the rate at which ‘spare capacity’, employees would ’emerge’ in sectors of the economy that were short of capacity to drive down mainly domestic inflation. The expectation was that unemployment would rise slowly as employees transferred jobs between sectors of the economy.

The problem is that existing employees in New Zealand aren’t shifting between parts of the economy, kiwis are simply leaving the economy and mostly heading to Australia. As Liam Dann put it

New Zealand had a net migration gain of 73,300 in the June 2024 year, down from the peak of 136,600 in the October 2023 year, Stats NZ says.

But the net migration loss of New Zealand citizens was at record levels over the period, with more than half of those departing headed for Australia.

There was a provisional net migration loss of 55,300 New Zealand citizens in the June 2024 year.

That was below the record set last month, for the year to May, when more than 60,000 citizens departed.

Before the current high levels, the record annual net migration loss of New Zealand citizens was 44,400 in February 2012 year.

The net migration loss of New Zealand citizens in the June 2024 year comprised 24,900 migrant arrivals and 80,200 migrant departures.

For every migrant arrival of a New Zealand citizen, there were more than three migrant departures, Stats NZ said.

“Despite the recent fall, the net migration gain in the June 2024 year is the third largest net gain ever for a June year,” Stats NZ population indicators manager Tehseen Islam said.

However, Westpac senior economist Michael Gordon noted that the estimated net inflow of 2700 people in June, was the smallest monthly inflow since August 2022, and “notably lower than the average of around 4000 a month that we saw in the years before Covid”.

The effect is getting worse, not better. In 2023, we wound up with a total nett incoming migration of 126,000. This year we will be lucky to get 50,000. This is a combination of NZ being less attractive to immigrants, anecdotally mainly because of cost of housing, and Kiwis wanting to get away from the ongoing disaster of the flailing Luxon government and high housing costs.

But we’re currently still getting nett inwards migration. Thus, in theory, relieving capacity issues in skilled and unskilled employees. All things being equal, this should in the RBNZ model have resulted in capacity expansions, but no rapid increases in unemployment. Paul Conway made his speech in June when the Q1 2024 employment was 4.3% and the RBNZ expectation was that it would peak at 5.0% at the end of Q4 2024.

But preliminary modelling estimates are that the July unemployment probably has already increased to 4.8%, well in advance of the RBNZ expectations. See “Why the unemployment rate is worse than you think” for the results of a model based data on benefits and filled jobs.

Based on my experience this year, I suspect even that approach is going to be systematically inaccurate. It doesn’t account for the rapidly increasing flood of boomers like me (born 1959) who start receiving superannuation this year. We’re not going into unemployment, but mostly we will be employable.

Boomers on superannuation who will probably still be or still wanting to work. Either because of housing costs or because we’re still healthy and not interested in golf or overseas trips or anything similar. Unlike younger workers, people who have super and a stash of released Kiwisaver are less likely to head over the Tasman. It will be interesting to see to what extent their increasing numbers buffer the future employment market in a way that NZ hasn’t seen before.

Anyway if the modelled unemployment levels are correct, then the real unemployment is more likely to be closer to 5.0% next month than it will be in December. It wouldn’t surprise me, given the weak economy at present if we hit 5.4% very early next year, and that it doesn’t peak at that level, but heads towards 6%. I’d also suspect that the next Household Labour Force Survey results are going to be interesting when looking at who’d like work but can’t find it.

In any case, the early drop in the OCR, and consequent fall in mortgage rates are obvious stimulation effects for an economy. Presumably the RBNZ are trying to prevent the economy from going deeper into a domestic recession and into a stagflation.

The Q1 GDP results showed a minuscule 0.2% growth a series of mostly negative quarterly, after worsening growth through 2022 and 2023.

QuarterQuarterly growth (%)Annual growth (%)
Mar-22-0.14.6
Jun-2210.7
Sep-221.82.5
Dec-22-0.52.4
Mar-23-0.32.7
Jun-230.53
Sep-23-0.31.2
Dec-23-0.10.6
Mar-240.20.2

The Q2 June quarter is going to be low, probably negative, as well, and I strongly suspect that Q3 and Q4 is going to be awful as the effects of widespread public service cuts and other employers cut further into domestic demand. There is absolutely nothing going on economically that indicates any areas of profit. This includes farming where the “July 2024 New-Season Farm Confidence Survey” shows both current and future profitability to be in short supply. Business where it appears that the only hope in July was that the RBNZ may start cutting OCR rates at year end – in other words that consumers would start spending if that happened. However I don’t think that a 0.25% change in interest rates will do much.

Meanwhile the beneficiaries of this governments largess; the landlords, banks and other rentiers, the farmers passing their costs on to future taxpayers. None adding anything of significiant utility to the domestic economy, most having detrimental economic and environmental effects well into the future. Like farmers in Canterbury being given permission to spread more pollution into already toxic water systems “Govt answers industry pleas to weaken freshwater law“.

Peanut tax-cuts in times of inflation do little to benefit anyone apart from the already affluent, a point made in “What will tax cuts mean for households?”

“They’re small tax cuts,” said Kiwibank chief economist Jarrod Kerr.

“They’re not life-changing. They’ll definitely help some households a little bit. I just don’t feel they’re going to be spent the way you might think – people running down to the retail store and buying some clothes. I think this will just be absorbed into people’s budgets.

“There is a lot of stress out there at the moment. If you’re a renter, your rents have gone up 5 percent in the last year. If you own your own home, interest rates have tripled, your council rates have gone up quite a lot, your insurance has gone up more than 20 percent. There are some big costs households are facing. $20 a week will help, but it’s not going to solve any of those problems.”

Susan St John, associate professor at the University of Auckland, said the lowest quintile of earners would get just 5.4 percent of the total tax cut, and 64 percent would go to the top two quintiles of earners. “About 130,000 households get nothing at all and 8000 are slightly worse off.”

The bulk of the recipients of the this governments largess are more likely to just use it to just use it to cover inflationary costs or interest accumulated between the time of the election and now. Or if already wealthy, to go on holiday somewhere offshore.

Tax cuts in the past have shown no positive trickle down effects into the economy apart from an effect that seems like a 1950s and later experiments of stimulating the pleasure centres of brains. A short term forced orgasm followed by a reversion into normal usage as the mechanism is removed. A common effect for Act voters whenever one of their favoured schemes are tried and found to be a complete failures. As most of them will be seen after this term.

Image of human with electrodes in brain

If you think about it from a local employers perspective, they are currently looking at a dead flat economy. There is rapidly increasing unemployment cutting into domestic demand. Their cost inflation is still high.

They can’t get the types of employees they want or need to drive growth because the ones that they would need have gone to Australia where wages are higher and housing costs relative to wages are far lower. What they have are mostly recent migrants who require training not only in the job, but also in the culture, and frequently in the language.

Meanwhile interest rates on capital are still high, so it isn’t worth investing in productivity enhancers. Similarly investing in marketing is probably not worth it without having an existing cutting technical advantage over competitors. But they don’t have that because, again, it requires that they invest in R&D for what is currently a flat economy and they just came out of a pandemic which was when the R&D should have been done.

Why would they spend for growth when they can currently get a better return on their capital by putting it on term deposits with effectively no risk?

In the past, National under John Key has bypassed this economic philosophical roadblock in their worldview by simply opening the immigration tap. This stimulated domestic economic demand for the goods and services by new customers, and activity fuelled by the money that immigrants brought into the economy. But that is close to impossible in the extremely tight housing market with both rents and house prices still soaring well above incomes.

In the past, National’s magical hand waving has conjured up visions of the private sector building houses to fill the gap. Something that simply didn’t happen. Instead almost all of the available spare residential housing capacity got filled to brim with incoming migrants. It still is.

This is obvious when you look at the volume of residential consents issued. See the May 2024 stats press release “Annual number of homes consented down 23 percent“.

But is even clearer when you look at the seasonally adjusted pace of completed buildings over the past few years in “Value of building work put in place: March 2024 quarter“.

In the absence of forward work, builders and construction companies are letting their staff go and folding. Meanwhile this government has now effectively shut down all building of affordable housing with the signalling of future housing policies.

But we still have high levels of net incoming migration. Certainly higher than the increases in housing stock.

There is no economic capacity in housing for the sugar rush of new migrants. Nor are we building enough new infrastructure or even maintaining our existing infrastructure to sustain more.

The NACT1 government have been announcing small numbers of new infrastructure developments. While they’re touting $11.4b (11.7%) in increased infrastructural pipeline values this is just PR bullshit. 5.3 billion is merely from cost rises mainly from inflation. Most provide few new significiant economic benefits.

Fixing previous under-investment in existing infrastructure especially water systems like fresh water, sewerage, and storm water protection doesn’t provide much capacity for new inwards migration. Fixing neglected government buildings from the Key era especially schools, hospitals and prisons doesn’t help increase economic capacity apart from construction sugar rushes. Fixing potholes and slips in degraded roads without apparently looking at what is damaging them, ie trucks, earthquakes,and climate change, is pretty pointless without looking at how to prevent damage in the future. They have axed a number of projects whose absence will significantly degrade economic benefits from transport – notably the continuation of the Cook Strait transport links.

About the only thing that looks like a useful new infrastructural project (actually pretty old as work started in 2008) is allowing congestion charging in Auckland and other cities. “Government accelerates congestion charging plans” describes changes to legislation to enable it for limited times in the day.

Of course that legislation will have a massive set of NACT1 holes in it. There won’t be corresponding infrastructural commitment funding alternate transport like public transport or safe bike paths to help people who can’t pay the charge. As importantly, employers will not required to have flexible work and stop times for on-site work which is the underlying cause for congestion peaks in the first place.

If I was 20 years younger, I’d be leaving New Zealand as well. Because “NZ: No jobs, expensive housing -> time to leave” isn’t getting better. With National around as the party for rentiers, it will only get worse, as it has through my working life.

Get out while you still can. Preferably before you sink too much effort in paying an Aussie bank for a expensive millstone or a gentailer a fortune for power that was largely already paid for by previous generations. Ask your parents, after they finish wailing about the grandkids, they will probably give you the same advice.

63 comments on “NZ: No jobs, expensive housing, time to leave ”

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  1. bwaghorn 1
    21 August 2024 at 4:57 pm

    I'm picking there's about 200 people in ohakune and raetihi seriously looking at oz about now because the last 3 governments where so useless they can't keep the lights on, having just bought my 1st home since I fell out of the housing market I'm shitting myself as to what's going to happen to house values,

    • lprent 1.1
      21 August 2024 at 5:36 pm

      Didn;t know what you were referring to until I just saw this on The Kākā by Bernard Hickey

      • Winstone announced yesterday it would close its pulp mill and sawmill near Ohakune permanently because wholesale electricity prices tripled since July 1, costing 230 jobs and escalating a nationwide manufacturing and exporting crisis.
      • bwaghorn 1.1.1
        21 August 2024 at 8:34 pm

        The flow on will be huge , young family man a golf with, the mills 75% of his work , the 3 man logging crew doing some trees for us are probably going to be told to stop 7 months early.

        Cheers PB selfish boss forced me into it , had a plan in hand that would have been far cheaper, but needs must.

    • Patricia Bremner 1.2
      21 August 2024 at 7:12 pm

      It is a turn of the interest rate curve. Look out for the best one year rate in the next 3 months. By 2026 the rates will be down to 4to 5 %You will always be better off than renting. Cheers.

      • Steve 1.2.1
        23 August 2024 at 1:14 pm

        Rates may drop for awhile but they will start moving back by market forces. Owning great as long as u don't do any maintenance

    • Bearded Git 1.3
      22 August 2024 at 12:11 am

      Listen to the first 20 minutes of The Panel on RNZ yesterday (wednesday) and you will hear the exasperation in the voices about why Oz has 30 percent of houses with solar power and NZ has 2 per cent.

      If Jacinda hadn't had COVID to deal with and had been a 9-yeat PM she would have sorted this.

      Labour MUST run on a solar power with battery storage attached platform in 2 years ..there are votes in this because it is the right thing to do.

      • Tuafan 1.3.1
        22 August 2024 at 8:44 pm

        Jacinda was the one who created this mess! Though I don't agree with everything this govt is doing, at least they are doing something to try and fix the mess the last Government made, who were very likely the worst Govt NZ has ever had!

  2. tc 2
    21 August 2024 at 5:31 pm

    Housing availability and cost of living is biting hard across the ditch.

    However the bipartisan approach to education, health and infrastructure through the state/federal system across Oz sees them so far ahead.

    Someone should Photoshop the key billboard from 08 with luxon saying goodbye to the loved ones as that's exactly what hes done.

    • lprent 2.1
      21 August 2024 at 6:12 pm

      Yeah, but aussie has a different scale. Or is at a different stage.

      I grew up in Auckland, lived here most of my life apart from a year wandering around on farms and in the army followed by a stint in Hamilton for university, and then few years later a stint in Dunedin for university. I had a rule after watching my mother doing uni in Auckland – never do that!

      I realised a few years ago that I can’t really afford to live in any of houses that I grew up in Auckland. I have an apartment with my partner just off the end of K Rd and Ponsonby Rd. It is virtually opposite the flat that I was born in on the opposite side of Newton Gully. It used to be the slum, as was 3 Lamps in Ponsonby, Mt Albert was solidly working class, Kingsland was a slum. I couldn’t have afforded to buy any of them for at least the last decade.

      I have up until this year earned well within the upper few percent of salary earners in NZ for at least the last 20 years. I could afford the apartment because it has no no significiant land. All of the houses I have ever lived in Auckland now have at least a million dollars of land value in their sections alone. That is at least 10 years of nett earnings, assuming that I concentrated on land alone and forgot to eat. And those aren’t even large plots of land.

      The land values in Aussie are nowhere near as bad relative to income. Even in places like Sydney.

      The problem is that land values are related to the infrastructure investment attached to them. Effectively the location isn’t so much as where it is, it is what it is related to. Where I live is now perfect for everything except work. Because of the land values and the leases involved those engineering industries that I like working for are further away in 3 different directions. North, South and East. Those jobs at peak hour traffic are now an hour away. Only 10-15km, but anything from a 1.5 hour to 2.5 hour commute per day.

      I could move to ChCh or Hamilton where the traffic isn’t too bad and where there are interesting engineering firms. But my partner moved to Auckland because it was the only city in NZ that supports what she is interested in working on. Pity she dislikes Aussie after living there for a while – she has met the worst of Australians – the average ones. I certainly don’t want to move to either LA or the UK.

      Guess I will be writing a lot of open source in our centrally situated apartment 🙂

      • Patricia Bremner 2.1.1
        21 August 2024 at 7:20 pm

        All the best to you both.

      • Jacob 2.1.2
        23 August 2024 at 6:45 am

        Thanks for your observation. Mentioned Sydney as an example, but isn't it expensive too ( have never been there) , so based on secondary data? Many are moving to Brisbane, specifically Sunshine coast cos weather, cost of living etc. But you are right the way Auckland prices are now for land.

        • lprent 2.1.2.1
          23 August 2024 at 6:30 pm

          If you look carefully at my comment, it wasn't about land prices, it was about commute times and the access between homes and work.

          Most of the Aussie cities have commuter towns with reasonable transport, both public and personal vehicles.

          The problem with Auckland is that we live on an isthmus between two harbours. That provides a massive issue for road transport as we keep pumping migrants into the urban area.

          In 1990, I had a job in Manakau City while living in Central Auckland. That is about 23km. I could commute that in about 20-30 minutes at peak traffic most days by car. That compares to about 45-65 minutes now. Back then it was about 50 minutes by bus. Now it is about an hour by train (when it is running).

          So then I wound up with a 40 minute to 60 minute daily commute, these days it is about 90-130 minutes. Note that this is going against the prevailing traffic.

          That is supposing there was no serious accidents.

          That is a good route. They added SH16/SH20 which more than doubled the capacity going south.

          Going west, east and north have much worse times. Wellington has much less population, and overall better public transport system – but has the same kinds of constraints on land for housing and transport to move around.

          Christchurch, Sydney, Melbourne, Brisbane, or Perth are less constrained by topography. They also make it easier to live and work from commuterville.

          • tc 2.1.2.1.1
            24 August 2024 at 8:41 am

            Melbourne sydney and Brisbane all have massive rail upgrades to cope with their growth underway.

            Cycleways have helped, especially in flat Melbourne. Whereas here as you point out a bad situation is only getting worse.

            • lprent 2.1.2.1.1.1
              24 August 2024 at 5:32 pm

              Some parts of the system are now pretty good.

              I drove down to Morningside station at 1550, parked and hopped on the train at 1604 (ie the end of school and the start of rush hours). Took 15 minutes to get to Glen Eden. Same on the way back a few hours later.

              The interval between trains was something like 10 minutes. The AT mobile app was dead accurate. Train was probably half full.

              I would have taken the e-bike to Morningside. But I wasn't sure about the arrangements on the train – which turned out to be easy. Also biking down the roads from home to Morningside Station is really dangerous in the rush hours traffic.

              Right now that would take 20 minutes by car from Morningside station to Glen Eden station. Google estimates that it would be 22-50 minutes by car on Thursday at 1600.

              Can't wait until they get the K Rd station open. There is a cycle lane down K Rd.

              Hopefully Cubic* will do a good job on the Hop card replacement. I loved that the AT Hop dongle that I last used in 2022 just tagged on and off perfectly using the ~$100 I’d left on it.

              On Friday, I went down and got the AT Hop Gold dongle! First thing I have found to use the SuperGold card on.

  3. Mike the Lefty 3
    21 August 2024 at 6:14 pm

    Not everyone is unhappy.

    High income earners and property investors are doing very nicely thank you very much.

    Now how much of the population does that cover?

    10% at the very very most?

    Just what we thought would happen under the CoC.

    The 10% have it nicely set up to make a mint.

    Everyone else gets sod all.

    As Bomber on TDB might say: You muppets voted National!

  4. Kay 4
    21 August 2024 at 6:16 pm

    Spare a thought for those of us permanently trapped here with no escape possible crying

    • lprent 4.1
      21 August 2024 at 7:17 pm

      Yeah. My sympathies. I suspect that I will be staying here in Auckland at least until we figure out something that both of us can agree to.

      But everything is paid off. There is a large dollop of cash in various investments. I get super and a SuperGold. Finally found a use for that, just have to get a AT gold key dongle and I can ride the local rails with the e-bike.

      I can keep an eye out for an interesting job that can use my skills and that won't suck up all of my time.

      I have a pile of ideas to code for open-source or light commercial.

  5. Ad 5
    21 August 2024 at 7:07 pm

    Epic.

    LPrent you sound liberated.

    The Wanaka-Wakanda-Elysium shtick we did is an early version of many multiple degree couples we know who've escaped to London and Canberra after being canned in Wellington.

    The remaining core of our R&D is in our public servants, and Luxon has gutted them, and us.

    I think this is worse than Bolger-Richardson.

  6. lprent 6
    21 August 2024 at 7:09 pm

    Interesting to see Tony Alexander singing the same tune. hat-tip: Kat

    "Tony Alexander: Rock star economy? More like economy on the rocks"

    It is true the economy is now entering its third recession in two years as a result of high interest rates. Falling rates will therefore bring relief. But there is more to an economy than just borrowing costs and for New Zealand, there are key factors in play that are not conducive to a stellar economic outlook.

    Consider net migration flows. The annual total peaked at 137,000 in October 2023 and now sits at 73,000. That is still a strong number. But the rate of decline is huge. In the three months to June, the annualised net flow was 8000, down from 129,000 a year ago. We are already in a much weaker-than-normal migration environment and I can see the impact in the monthly survey of property investors I run with Crockers Property Management.

    This month a record net 21% of landlords reported that finding good tenants was difficult. Only five months ago a strong net 27% said finding good tenants was easy. The rental market has turned on a dime as the unusual migration boom rapidly fades. Soon the focus will be on the record net loss of Kiwis.

    Consider also that for nearly six years to late-2023 fiscal policy actions added to growth in the economy and boosted government debt over 80% – for no sustained economic or social improvements. Now, fiscal policy is having to be tightened to get the books back in order and remove public sector flab. This will slow the pace of growth in our economy for many years.

    Third, it pays to remember that in past periods of tight monetary policy the Kiwi dollar soared and then fell away when rates were quickly cut. This time around our currency has not gone up during the tightening period so there is no special boost over 2025-26 coming to our exporters, farmers, and the regions from a downwardly correcting currency. In fact, our currency has on average gained almost 1% since last week’s monetary policy easing.

    Expect access to some foreign markets to become more difficult, regardless of who wins the US election. That is a problem because China’s economic outlook is poor and our export receipts from that country have fallen almost 11% this past year while falling 3.4% for all destinations. China now takes just over 27% of our exports, down from almost 33% three years ago. Bye-bye boom.

    Etc.

    The other issue is that we have a very strong export tech sector that has developed over the past 30 years. It is probably out 3rd biggest export profit earner (farming hasn't actually made large profits for decades now).

    Right now that is pretty quiescent simply because it is watching to see what policy screwups NAct1 actually will do in the tech and science sectors. I'm having a look around to see what Judith Collins has been doing after her disastrous start … described here "Never mind the roads, fix the potholes in R&D funding"

    Looks like a Endeavour Fund Investment Plan is ok.

    Just as an example if you look at stats "New Zealand business sector R&D expenditure reaches $3.7 billion" from business sector expenditure as a scale factor. That is mostly as a result of Research and Development Tax Incentive. Looks like that hasn't changed.

    Callaghan Innovation looks ok as well.

    Personally I could only ever trust Judith Collins to screw things up. But she doesn't appear to have done so this time.

    • SPC 6.1
      21 August 2024 at 7:41 pm

      Labour made a big mistake pandering to business (and National) demand for workers post pandemic borders – and the related lack of management of who was coming in etc. Not only did we get migrants without jobs in hardship, we had the rent hikes and high OCR to suppress demand.

      • Ad 6.1.1
        21 August 2024 at 8:20 pm

        Do you recall that year we had no one to do our horticulture and hospitality? We had 3.1% unemployed and apples rotting on the ground.

        • KJT 6.1.1.1
          21 August 2024 at 8:35 pm

          Yes. Horticultures and hospitalties inefficient business model, of exploiting migrant and temporary visa workers to cover their lack of business viability, subsidised by the rest of us, was exposed to sunlight!

          • Ad 6.1.1.1.1
            21 August 2024 at 9:11 pm

            Better known as our export economy. Pays lots of tax.

            • KJT 6.1.1.1.1.1
              22 August 2024 at 1:10 am

              "Pays lots of tax". How?

            • lprent 6.1.1.1.1.2
              22 August 2024 at 9:05 am

              Ah no. You're doing the Shane Jones thing, conflating export revenues with profit. Yes there may be profits somewhere. Probably mostly in banks and largely exported to offshore shareholders. But taxes – definitely not.

              The amount of tax paid by the all kinds of farmers in 2020/2021 tax year which wasn't a bad year for agriculture was minuscule. There was an OIA on it. 2021/22 would have been a bit better. The last few years would have been far worse.

              Less than $1.5 billion out of a total tax take of $23.9 billion across all sector industries. There are caveats on the data-collection, but it covered GST, PAYE, Income Tax via various kinds of entities.

              If you look at scale, the total assessed tax revenue from all sources in 2021 was 93.8 billion.

              There is probably other tax collected in processing and shipping. But it is unlikely to be that high. Similarly there will be taxes from direct suppliers to farming.

              But over all, I'd be surprised if the total tax received from all sources related to agriculture exceeds the range of $3-5 billion. ie roughly 3-5% of the central tax take.

              The processing plants and trucking aren't particularly high profit, they automate highly, and the number of people employed isn't high compared to the overall PAYE. People who work on farms including fencers, spreaders of fertilizer, and even vets aren't paid that much.

              There will be local taxes. However I would tend to discount them as they're mainly used in rural areas for maintaining the non-state highway rural roading network.

        • SPC 6.1.1.2
          21 August 2024 at 9:12 pm

          Meh, how many of the migrant workers allowed in worked in hospitality and horticulture …

          That was the work of tourists and seasonal workers – some of that need due to the lack of utilisation of harvesting tech.

          The unemployed are not going to move to areas either without housing (camper van Queenstown) or only seasonal work.

        • Descendant Of Smith 6.1.1.3
          21 August 2024 at 10:59 pm

          Only partly true. We also had over production and more to sell than markets to sell to. Some orchardists had also not up-dated their trees to modern varieties. You're not going to pay to pick apples you have no market for.

          All horticulture areas over produce. Many vegetable growers are paid to bulldoze the surplus – lower prices versus guaranteed payment ever since the auction houses went.

          You have to over produce in case some of the crop gets wiped out e.g. hail risk. That is clearly preferable to having to cancel orders.

  7. SPC 7
    21 August 2024 at 7:25 pm

    Yeah the outflow of citizens and inflow of migrants is telling.

    The 4th big outflow. First late 1970's (no longer a UK farm economy limitation – the pavlova paradise now a past golden age). Second 1990's (unemployment and low wage growth – leading to their 2001 rule change). The third post earthquakes (c2012 era – insurance payouts).

    Oz is doing infrastructure better (PT and energy – solar and battery). And its paying salaries sufficient to keep its health system functional.

  8. Maurice 8
    21 August 2024 at 9:21 pm

    A bit like "degrowth" winding back consumption and carbon dioxide release?

    Surely we should be celebrating that?

    • lprent 8.1
      22 August 2024 at 9:19 am

      Ah stirring..

      Degrowth is a bit of a myth beloved of the right who also seem to be in love with survivalist tropes and people who don’t understand history. You can't do it rapidly unless you want to have a rapid human diebacks, which typically will involve conflicts. Those generally release copious quantities of CO2.

      The trick about CO2 reduction is to find alternative ways to generate power that don't require burning fossil carbon to release energy from C-H bonds. You can't do that kind of investment if you don't have surplus capital to do it. For instance putting in solar, wind, geothermal, or hydro power systems.

      Of course the problem in NZ is that we don't do that because of the Max Bradford stupidity in our 'deregulated' power systems which prioritise extracting profit and capital out of existing assets, producing generating capacity, and actively preventing household generation.

      If we want to reduce greenhouse gases rapidly, the a different course should be taken. That is to reduce methane and nitrous oxide emissions which will have nearly immediate climate cooling effects. To do that we just have to correctly tax farming of emissions from rumens and nitrate fertilisers to encourage farmers to either reduce emissions or stop farming those polluting activities.

      • Drowsy M. Kram 8.1.1
        22 August 2024 at 10:12 am

        If we want to reduce greenhouse gases rapidly, the a different course should be taken. That is to reduce methane and nitrous oxide emissions which will have nearly immediate climate cooling effects.

        yes Aotearoa NZ did well at the Olympics, and more awards may yet come our way.

        https://climatenetwork.org/resource/fossil-of-the-day-3-december-new-zealand-japan-usa/

        ‘Nobody ever saw anything like this before’: how methane emissions are pushing the Amazon towards environmental catastrophe [17 Aug 2024]
        Controlling methane provides our best, and perhaps only, lever for shaving peak global temperatures over the next few decades. Essentially, humans have released in excess of 3bn tonnes of methane into the atmosphere in the past 20 years. Quashing those emissions within a decade or two would save us 0.5C of warming. No other greenhouse gas gives us this much power to slow the climate crisis.
        …
        I feel Fleischmann’s despair – plus anger I didn’t feel a decade ago. I never thought I would live to see the world’s weather unravel and people suffer so much for it.
        …
        What you can do
        Our homes are a great place to begin cutting methane emissions – replacing fossil gas with cleaner electric appliances and reducing our personal beef and dairy consumption.

        Cluxon's on the case!

        It’s a case of slower to go faster. – Luxon [3 May 2023]

        • satty 8.1.1.1
          22 August 2024 at 10:44 am

          What you can do
          Our homes are a great place to begin cutting methane emissions – replacing fossil gas with cleaner electric appliances and reducing our personal beef and dairy consumption.

          Replacing gas with electric appliances was one of the first things I did at my home. Healthier, safer, better for the climate and cooking with induction is superior to a gas stove*.

          How much is the standing charge for a gas connection nowadays? At least $1.50 / day?

          Did the change over 10 years ago, so that saved me over $5,000 just in standing charges. Even from a financial point it makes sense.

          And we reduced our meat & dairy consumption by 90%.

          ___
          * Cooked daily with gas over 10 years and now over 10 years with induction. When cooking at my partner's parents' place, with gas, it just strikes you how backward a gas stove really is: With induction, no need for a kettle to heat water, no need for a slow cooker to avoid burning food… much more relaxing experience when "entertaining guests" while cooking.

          • lprent 8.1.1.1.1
            22 August 2024 at 1:47 pm

            My latest toy is a hot water dispenser. Cost me about $140 on special from Farmers.

            I drink a lot of coffee when coding. This is way more efficient than a kettle because it only heats the water as it measures it out. Also I can set it to do the 92C I want for coffee. Just have to fill the 2.7 litre flask at the rear about once a day.

      • Maurice 8.1.2
        22 August 2024 at 2:23 pm

        Ah! So "degenerative" farming. Next Farmers will be taking up Coding … and flooding that market.

        • lprent 8.1.2.1
          22 August 2024 at 4:18 pm

          Personally I would prefer that farmers just pay the full costs of what they generate. In the longer term that would cause a massive increase in innovation to control it.

          In the short term it’d separate the efficient farmers from the inefficient ones, and cause farmers to get serious about value-added exports rather than simply shipping commodity product.

          FFS have you ever closely looked at the profitability of farming in NZ. It absolutely sucks.

          That they pollute like crazy is just a typical side-effect of their inherent inefficiency. Farming in NZ should be able to run pretty close to a closed cycle.

          But at present they have no incentives to do so. So they remain at the vagaries of pricing on world markets and live hand-to-mouth hoping for good seasons to survive, and making bank rich from interest payments.

          They make their profit eventually from what are effectively speculative capital gains after they sell and retire.

  9. Macro 9
    22 August 2024 at 9:07 am

    Yeah! I know this only too well. After the start of the Key govt with their hatred of the Public Service and the slashing of jobs. Remember the ad – "Stop waving goodbye to your loved ones". What a load of BS that was! My family immediately lost their jobs. Our son-in law is a qualified specialist in after care for persons suffering brain trauma. Aussie welcomed him with increased salary and permanent employment. He's now managing the total operation for the whole of Perth WA. He also serves on a panel advising the state Governor on care for homeless and care for the mentally ill. The family have taken Aussie citizenship. My daughter with Masters(Hons) in both science and community development is involved in education in Perth. So great work by the Nats sending our best and brightest offshore.

    • Mountain Tui 9.1
      22 August 2024 at 9:32 am

      They specifically said that too –

      Social Development and Employment Minister Louise Upston has admitted New Zealand could lose some of its "best and brightest" overseas while in recession.

      Upston said Treasury was forecasting jobseeker numbers to go up, hitting a peak next January.

      "People who are in that set of circumstances, and I really feel for them, have to make some tough choices, and for some that may well mean that we lose a range of people, including some of our best and brightest, offshore," she said.

      Upston said job losses were the reality of being in a recession, which she blamed on decisions the previous government made…

      Labour leader Chris Hipkins said it was a government's job to make New Zealand a place people wanted to live, work, and stay.

      "To see a senior government minister predicting that we're going to have a brain drain, and effectively shrugging their shoulders and saying 'oh that would be a rational choice on the part of the people leaving the country' is pretty disgraceful really," he said.

      https://www.rnz.co.nz/news/political/512721/recession-could-lead-to-brain-drain-employment-minister-louise-upston-says

      • Kay 9.1.1
        22 August 2024 at 10:59 am

        I'm still very intrigued by all the government picks for MSD Ministers. Certainly since 1990 they've all been female- a political ploy because traditionally women are seen as more nurturing/kind? Or because all the Male MPs refuse to do it?

        Obviously, Jenny Shipley, Paula Bennet, Anne Tolley and now Upston knock that idea out of the water. Sepaloni could at least pretend to be caring, and tweak around the edges a bit to make our lives a bit more tolerable.

        I stand by my observation for years now, that there is something seriously wrong with the Nat picks for MSD Minister (and currently Finance Minister)- there is simply no way on earth that any 'normal' person (male or female) would be capable of inflicting so much harm onto so many people without batting an eyelid, and can still sleep at night. Sociopathy is the only obvious reason.

  10. James Simpson 10
    22 August 2024 at 11:31 am

    I can't disagree with your analysis. It is a huge issue for NZ as people flood to the exit doors. But from a personal perspective I will be staying.

    I'm 40 year old kiwi born and bred in the Waikato. I have lived in New Zealand, Australia and the UK. In my working life, it has always been more attractive to work outside of New Zealand. Over that time Australia has offered, better weather, higher wages, stronger unions, better infrastructure, public services and healthcare, and better Super.

    But its not New Zealand. It doesn't have Manu Bay, it doesn't have Whakapapa and Cardrona, it doesn't have the Milford Track, it doesn't have the All Blacks and the Warriors, New Years at Whangamata with your mates on the beach, Matariki and Waitangi Day, Kapa Haka competitions, or Auckland 1A.

    There is nobody in this country that wouldn't be better of financially if they moved abroad. But I for 1 stay for something bigger than that.

    • lprent 10.1
      22 August 2024 at 4:48 pm

      I’d definitely like to stay. Mostly I don’t think that I can stay in Auckland because of the housing prices and the commute issues.

      • James Simpson 10.1.1
        23 August 2024 at 9:26 am

        I know what you mean. Living in Auckland is a fight for survival now. I don't know how people, on even good incomes, live there with the cost of property.

        • lprent 10.1.1.1
          23 August 2024 at 5:21 pm

          …live there with the cost of property.

          Have it paid off. Took a while. From 1998, through a leaky building rebuild (and eventual settlement from the council) until about 2017.

  11. Champaign Socialist 11
    22 August 2024 at 11:51 am

    The NZ economy is getting it's version of 'shock therapy' – a significant and rapid increase in un-employment and the collapse of smaller business in the tens of thousands – so far. The economic purpose of this deliberate approach is to create an environment of cheap labor and distressed business assets that will draw investment into the economy.

    But there is a silence from our media overall – it's not something they dwell on – the same stories about local crime, the All Blacks and entertainment figures etc. are most prominent.

    The closure of Winstone Pulp International is a very significant economic story and it is now off the headlines in a day or less. In Hawkesbay the personal financial impact on those losing their jobs will be devastating. But the impact will spread further across the regions economy.

    What are the implications for inflation overall if energy prices remain high? Energy is an input cost to almost everything else. Why is no-one in the business commentariat looking at this with concern? Is it because they all have shares in the power companies?

    For all Shane Jones bluster he's made it obvious he plans to do nothing other than point the finger at others. Note that the government itself will benefit from the higher power company profits as a holder of shares. The whole situation seems really fucked up and no-one want's to talk about it.

    • SPC 11.1
      22 August 2024 at 12:14 pm

      If they have the scientists available – it is time to assess whether this dry and calm year is going to occur again any time soon.

      Or just go big on solar now, as Oz has already. And this and battery storage is known to reduce power cost.

      • lprent 11.1.1
        22 August 2024 at 4:41 pm

        It looks to me based on the last couple of cycles like the ENSO is cycling faster. I think that this last year was mostly el nino -neutral here, heading to la nina now.

        The ENSO forecast seems to point that way here and in the north.

        But the climate is pretty damn variable at present. I think that we are just short of capacity to deal with the variability. We also have the wrong system for dispersing risks, it actually incentives living too close to the edge because that enhances profit.

        House solar + battery is what I want. But I’ll have to wait until I own my own roof and garage. With apartments I have to deal with 60 other roof and garage owners.

  12. Stephen D 12
    22 August 2024 at 12:36 pm

    Why would they want to reduce the cost of power? They’re there to make a profit, not provide cheap electricity.

    • James Simpson 12.1
      22 August 2024 at 2:43 pm

      They wouldn't. That's why we need the industry restructured.

      To be fair to part of this government, Shane Jones seems to be pushing for that.

  13. Corey 13
    22 August 2024 at 2:51 pm

    Worldwide recession and reserve bank induced. It isn't national causing the recession they have speed it up by reducing government spending but it needed to be reduced, the country isn't generating enough tax to support the services it already provides. Any larger taxes would impact everyone and cause further recessionary pressures so it is good they are instead reducing spending and cutting costs in the public sector.

    • lprent 13.1
      22 August 2024 at 4:11 pm

      They have sped it up, and extended its duration with excessive levels of austerity.

      There was no need for larger income taxes. There was also no need to try to reduce taxes largely for the affluent alone. Which is effectively what was done.

      Just shifting the tax boundaries with ‘block of cheese’ shifts in the lower brackets only would been sufficient. Or putting in a tax free bracket because the cost of getting taxes from anyone with little income is way too high relative to wajht is collected.

      … the country isn’t generating enough tax to support the services it already provides.

      The country needs to have more taxes over the next few years because

      1. I was born in 1959 and just hit super age. 1961 was the peak of a baby boom.
      2. Superannuation costs are going to hit the roof in about 5 years. National being lazy arseholes who can’t think ahead have been undertaxing for years and failing to fill the Cullen superannuation fund. That means that it won’t be able to cover the peak superannuation costs.
      3. All those superannuiants are also going to steadily burden the health system. Which is also underfunded

      Any larger taxes would impact everyone and cause further recessionary pressures so it is good they are instead reducing spending and cutting costs in the public sector.

      Clearly your grasp of basic economics is severely limited. I’d suggest that you find a different economics primer.

      Taxes that are paid to provide immediate services increase the velocity of money (usually measured by the number of times it circulates ina given time period), effectively increasing the efficiency of money in the economy. It makes little negative difference to the economy overall if paid to civil servants. It can made a large positive difference if the money is used to provide productive services and infrastructure.

      In any case the usual problem with government spending is not recessionary, it is inflationary. That is because the government via the reserve bank can effectively create money. That is what its job is and effectively what the OCR is all about. That is potentially inflationary if it gets out of whack.

      What taxes does do is to reduce the hoarding of money into static often speculative capital – like housing prices spirals. Hoarding without a productive use effectively withdraws money from the economy. That is recessionary and is the fundamental reason that we have a recession at present.

      Basically we should have an effective capital gains tax, like every other developed nation does.

      Anyway, if you ever stop being a cost accountant trying to discuss economics (which is what you sound like), then we can chat about economic reality.

      BTW: there is currently not a world wide recession. The reserve bank hasn’t induced this recession, they are just trying to control the inflationary effects of having supported the country through a pandemic and the near cessation of most of the economy. National isn’t causing the recession, they are just making it worse and longer. That is because they are effectively have left the totally non-productive landlords able to make excessive profits in speculative house prices – they have freed up what capital gains controls we had, and donated the landlords relief from the cost of being taxes on interest they pay. Both will maintain and extend the unproductive tying up of capital in speculation of housing.

  14. adam 14
    22 August 2024 at 4:17 pm

    I said this lot would screw over the economy – if we slip into stagflation which I hope to God we don't. That is it folks, it will be official – the national party are, "the party of no idea about how an economy works".

  15. Mr Asher 15
    22 August 2024 at 4:48 pm

    You mean "Labour's induced recession", not National's.

    • lprent 15.1
      22 August 2024 at 5:32 pm

      Nope. The recession was a side-effect from the pandemic responses which triggered inflation and a deflationary response from the RBNZ, coupled with really shit prices for agriculture prices in 2023, and a couple of other structural problems with profits from ‘exports’ like tourism and a dry year for power production.

      Keeping an economy alive during a pandemic while having large countries of the economy in lockdown carries inflationary issues and overshoot is pretty inevitable. The choices with National would have been similar, but probably with a higher death toll and even more economic disruption.

      However we were starting to peek out of post-pandemic recession towards the end of 2023. See the GDP figures in the post and the inflation estimates from the RBNZ/stats.

      What is happening with National’s policies is that they are liable to induce stagflation and lock a recession into place and leave it there. They do that by effectively dropping the velocity of money in the economy because people become unwilling to spend because of uncertainty of income. Effectively they have induced unemployment to rise through a vast range of the economy through policy changes that target employment and planned programmes. From public servants, the programmes that they have cut, the suppliers that they will stop buying from etc… That spreads out into things like baristas that don’t have customers. People culling possums that have funding cuts. The companies that supply those..

      The only place that they have produced a counter stimulation are economically hoarders. Landlords by enabling their leveraged buyouts of housing and banks via customers including landlords and renters paying their mortgages from tax reductions. That reduces money velocities.

      So National has pushed the economy towards reduced business and personal confidence which has been the feature of term so far. The effect is pronounced enough that the RBNZ has been pushed to start considering that we may now be in stagflation cycle where no-one is taking risks or spending money in case their job disappears, so businesses are seeing less business and starting to shed staff to reduce costs, and no-one is investing in new business – all because of uncertainty.

      If you listen to the economic pundits, that is what they worried about as well. That especially the rapid drop off rate of people migrating here and the even more rapid rate of people exiting the country was why the RBNZ dropped rates early. Stagflation is really hard to break out of.

      National should know. They managed to do this several times in the past. It will be harder to get out of now because of our ageing demographics. We may get caught in the same economic stagflation/deflation trap that Japan got into

      • aj 15.1.1
        22 August 2024 at 6:48 pm

        The last 9 months proves the sceptics of National's tax plans were right.

        It was either 'Tax Cuts for all with rainbows and unicorns' (National) or 'tough out the cost of living issue and keep jobs and government services’ (Labour)

        If anyone wants to look back it wasn't only Labour warning the tax cuts could only come with massive cuts to govt spending, it was almost every economist in the country. Not only we have cuts but to make their numbers add up the Nat's have more new borrowing than Labour.

        And of course most taxpayers are worse off now.

    • Mountain Tui 15.2
      22 August 2024 at 8:14 pm

      I'm not as patient or educated as lprent, but I'd say briefly – there was no induced recession from Labour. Far from it. The global credit ratings agencies all gave positive feedback and maintained top tier credit ratings AA+/AAA

      In addition, Treasury etc all forecast a very soft landing with strong optimism up to and including November results.

      Instead National started with their "We are so fragile" BS so they could use an excuse to implement an austerity budget, fire thousands, halt the large majority of construction, cancel infrastructure programs and then borrow an ADDITIONAL $12bn for tax cuts that are more than eaten up by their games on 3 Waters (council rates), climate change driven insurance hikes, etc even as they increased car registration, public transport fees, prescription fees, GP fees and the like.

  16. Jonno 16
    22 August 2024 at 8:39 pm

    Very interesting article. I would observe that we are caught up by poor governance at a central government level (Accelerated recession) and local council level (Cannot live within a normal budget). But as a self employed person whose superannuation savings is three small apartments (not negatively geared) I can assure you that people in our position are not laughing 'all the way to the bank.' Here in the Wellington City Council area rates have been rising for the last few years at double and now triple the rate of CPI – while the city population has not changed in 5 years. Landlord insurances like house and content insurances have been rising at double figures for the last few years, and this years contents policy went up 35%. Like responsible landlords we don't hike up rents. So – in practical terms it means that this can only be survived if we sell up and move to the southern Mediterranean or Asia where the cost of living is so much lower (We have lived 15 years in Australia in our lives – thats even less an economic option that NZ). Or try renting them out and renting in Portugal, Spain, Vietnam, or Italy. Losing the NZ Govt Super would still not be a disincentive as the buying and renting, and all other aspects of costs of living (except cars which you don't need) are so much lower in regional cities and most rural areas in these countries. And – they really want modestly self funded international retirees. So sadly – we have to leave, along with other kiwis now engaged with European and South East Asian immigration agents. (Maybe we should have got normal jobs and the retirement schemes that go with that – but too late now).

    • lprent 16.1
      23 August 2024 at 4:30 pm

      Here in the Wellington City Council area rates have been rising for the last few years at double and now triple the rate of CPI – while the city population has not changed in 5 years. Landlord insurances like house and content insurances have been rising at double figures for the last few years, and this years contents policy went up 35%.

      Those rates will keep rising because of 3 waters issues and climate change. Both are directly the result of chronic 60+ years under-funding of water handling.

      The problem is that generally rate payers don't like paying for things mainly benefit future generations. But installing water infrastructure is inherently aimed 50-100 years down the line. It is hard to do it piecemeal because it has to be integrated into a plan.

      So it gets stuck in once (in NZ typically somewhere between 1900 and 1960) and not continuously upgraded for changing circumstances. It just gets extended as subdivisions go into place, but leaving the old infrastructure in place. Or it gets upgraded when the previous endpoint don't have capacity (ie new or larger dams or sewerage treatment plants), or when the storm water system can't handle excess rain and flooding starts to happen.

      Labour's response was Three Waters legislation, which wasn't about either stealing assets either from councils or Maori control. That was just racist dog-whistling by Act, National, and NZ First to collect votes.

      It was to allow central capital funding for the major upgrades across all of the failing infrastructure in NZ. It would also mean that the really large lumpy investments required wouldn't add to debt or cause massive increases in rates.

      It would mean that the scatter gun responses of fixing after failures could slowly switch to preventing disasters in the first place. It would mean that the very limited supply of water engineers and funding could be focused on the major upcoming problems, rather than relying on the ad-hoc scare campaigns by local politicians to motivate

      National threw that away. So now councils have to raise rates to upgrade within their fiscal limits. Insurance companies raise premiums because they see no or little progress on fixing risks like sloped undercut by more water crushing house, or weather causing floods that century old storm water systems can't handle.

      All they are offering is central funding when ignorant NAct1 MPs (who know nothing about water or earth sciences) approve of the local council policies. Something that may or may not start happening outside of Auckland* and probably Christchurch** next year.

      So – in practical terms it means that this can only be survived if we sell up and move ….
      And – they really want modestly self funded international retirees. So sadly – we have to leave, along with other kiwis…

      Yep.

      * Auckland because it has been continuously growing, so has by and large kept up with its infrastructure spending. Especially in the last 3 decades as systems started failing because of in-fill housing.

      ** Christchurch because of its earthquakes in 2010-11

  17. John Stewart 17
    23 August 2024 at 9:48 am

    What a pity you choose to omit information when reporting. This recession was predicted last year when Labour was in charge of the piggy bank. Another example of poor inaccurate left wing reporting.

    • lprent 17.1
      23 August 2024 at 3:52 pm

      Clearly you are unable to read past the first sentence. The key word wasn’t recession. It was stagflation. My first sentence was:-

      It gets rather depressing reading the statistics on National’s induced recession as they steadily push New Zealand into stagflation.

      I guess that you are too economically illiterate to know what that is. Stagflation arises out of an recessionary climate but is induced to take a turn for the worse, usually because of governmental policies. Wikipedia

      In economics, stagflation (or recession-inflation) is a situation in which the inflation rate is high or increasing, the economic growth rate slows, and unemployment remains steadily high. Stagflation, once thought impossible,[1] poses a dilemma for economic policy, as measures to reduce inflation may exacerbate unemployment.

      What I was pointing out was that appears to be exactly the dilemma that the RBNZ is now trying to correct for after National’s stupid economic mistakes since taking office. That was obvious because the next thing I said was …

      The Reserve Bank’s previously unsignaled OCR decision last week wasn’t a hopeful sign.

      Rather than sticking to their planned reductions over the next couple of years, they would up responding to unplanned rapid increases in unemployment and slumps in demand. Kiwis have already recognised the failing economy – they are rapidly leaving.

      So I guess that either you are too lazy to read past the first part of the fist sentence (as would be usual for many NAct1 supporters), or you were just fingering your genitals and pissing with excitement about your own one liner like a good troll.

      In either come back when you have actually learnt some basic high school grade economics and can contribute to an intelligent discussion.

  18. Jakem 18
    23 August 2024 at 7:37 pm

    Interesting article what a shame you have such an obvious political bias.

    Every political party in the last forty years has enthusiastically supported the extreme neoliberal orthodoxy first foisted on us by Roger Douglas and Labour in 1984.

    Given that what we are witnessing is the entirely predictable outcome of these policies (eg hollowing out of education sector, collapse of manufacturing, jobs outsourced overseas, rampant price-gouging by corporate monopolies), to say that one party is far worse than the another is to miss the point entirely :

    Until we have structural reform of the idiotic economic policies that have lead to this mess – and have thus been proven not to work! – it really doesn't matter who one votes for. Its the equivalent of rearranging deckchairs on the Titanic

    • lprent 18.1
      23 August 2024 at 8:04 pm

      Perhaps you should read our about. It will explain our general ‘bias’. Your obvious ‘bias’ appears to be that a prig and stupid troll who can’t read.

      My personal bias is that of a reluctant socialist tech geek with a MBA and a working life in private industry. Which is why this post was about current economic policies rather than political theories or parties.

      I doubt that you noticed or even read anything past the first sentence. That is probably why you missed that there was exactly one mention of the current National party in the post by me. It was put in there as a test specifically for stupid trolls who didn’t actually read the post (usually those on the right).

      There are a couple of references to economic policies of the previous Key National government related to current economic policies, and to the direct policies of current NAct1 government (which is a 3 party coalition).

      Somehow I never mentioned any other parties.

      This probably should have given you a hint that I’m less concerned about the politics and more concerned about the current economic policies at present.

      After all we have this foolish policy stupidity for another 2 years. This is probably economically more relevant right now than event that happened about 40 years ago. Perhaps you might want to try to enter the 21st century at some point.

      I do have a bias in that I rather suspect that you are just a stupid ignorant troll who didn’t actually read the post.

      • TeWhareWhero 18.1.1
        24 August 2024 at 10:52 am

        Call me old fashioned but ad hominem insults neither strengthen debate nor serve the wider interests of the left. I detest the man but Churchill did have a great line in aphorisms – “You will never reach your destination if you stop and throw stones at every barking dog”, being an especially pertinent one.

        Your statement of "being less concerned about the politics and more concerned about the current economic policies at present”, (my emphasis) fascinates me as I can’t work out how it's possible to extrapolate one from the other given they have a common origin and are mutually reinforcing.

        The claim that the coalition’s “foolish policy stupidity” is “economically more relevant” than what the infiltrated LP did to NZ in the 1980s in the service of emergent global (hyper) capitalism, makes no sense to me.

        How can you analyse this government’s crude mishmash of economic policies without rooting the analysis in that historic capitulation and the ensuing four decades of subservience to global capitalism by successive governments which are differentiated largely by how they manage the margins of the system.

        Some more aphorisms: people who don’t learn the lessons of history are doomed to repeat its mistakes, and mainstream economic theory is capitalist ideology wearing the cap and gown of a pseudo-science. 🙂

        • lprent 18.1.1.1
          24 August 2024 at 1:13 pm

          Perhaps I should have said ideology. And shortish-term economic issue – that can stretch out for a long time.

          The problem is that stagflation is one of the hardest of economic traps to get out of. It has nothing much to do with ideology because…

          It has been obvious in a number of types of economies from rampant capitalism to full blown socialism and everything in between. It usually happens when an economy is shifting between modes, typically demographic or technological or cost shocks or even just something like strict price controls. You can see it running through past histories history once it became obvious after the 1970s oil shocks.

          It is characterised by persistently simultaneous high inflation, low growth, high unemployment, and productivity blockages. It jams an economy into a horrible persistent recessionary balance.

          As Investopedia puts it when discussing how to get out of stagflation..

          What Is the Cure for Stagflation?
          There is no definitive cure for stagflation. The consensus among economists is that productivity has to be increased to the point where it will lead to higher growth without additional inflation. This would then allow for the tightening of monetary policy to rein in the inflation component of stagflation.

          That is easier said than done, so the key to preventing stagflation is for economic policymakers to be extremely proactive in avoiding it.

          There have been other routes. Ideally to be avoided

          Federal Reserve chairman Paul Volcker very sharply increased interest rates from 1979 to 1983 in what was called a “disinflationary scenario”. After U.S. prime interest rates had soared into the double-digits, inflation did come down; these interest rates were the highest long-term prime interest rates that had ever existed in modern capital markets.[43] Volcker is often credited with having stopped at least the inflationary side of stagflation,[citation needed] although the American economy dipped into a recession with the unemployment rate peaking at 10.4% in February 1983.[44] Economic recovery began in 1983. Both fiscal stimulus and money supply growth were policy at this time. A five- to six-year jump in unemployment during the Volcker disinflation suggests Volcker may have trusted unemployment to self-correct and return to its natural rate within a reasonable period.

          In our case I think it arises from shocks rippling down from the pandemic responses coupled with the changes in our trading relationships. In particular the ones related to the Chinese economy either directly from exports, or via Australia whose iron commodity trade is crashing down to low prices as the building boom in China slows to a crawl.

          But the austerity focus of this government are precisely the wrong things to prevent it from correcting incipient stagflation.

          I don’t think the politics or ideology has much to do with it. Just a fatal unawareness of the risks.

          Call me old fashioned but ad hominem insults neither strengthen debate nor serve the wider interests of the left. I detest the man but Churchill did have a great line in aphorisms – “You will never reach your destination if you stop and throw stones at every barking dog”, being an especially pertinent one.

          A quote that was more about wasting time unproductively than “ad hominem insults”. Churchill relished those when they were useful.

          I’m not that interested in the wider interests of the ‘left’. They invariably seem to mean some kind of quasi-religious adherence to some vaguely defined principles and are usually only useful for chopping up the ‘left’ into small congregations of believers who can’t work together. It is kind of pointless huddling teeny echo chambers if you’re interested in actually improving how systems work.

          I’m mostly interested in functional disagreement and exploring ideas about how to make things work, short or long term. Which surprise, surprise is also the standing policy on the site (and no I didn’t write these bits).

          Read the about and the start of the policy on robust debate (my italics).

          We encourage robust debate and we’re tolerant of dissenting views. But this site run for reasonably rational debate between dissenting viewpoints and we intend to keep it operating that way.

          What we’re not prepared to accept are pointless personal attacks, or tone or language that has the effect of excluding others.

          Which is why this site tolerates a pretty wide range of views between authors and commenters, and has a habit of breaking up comment threads that revert into ideological echo chambers trying to exclude disbelievers.

          Personally as I have said many times, I am a reluctant socialist, a extreme individualist, and that I don’t think that ideology is particularly useful for dealing with many situations. I prefer looking across the views to pick out identification of problems and ways to deal with them. Which is why I tend to leave a lot of comments and replies on my posts, frequently critical of the views of others because I can’t see any point to them.

          Dealing with ‘barking dogs’ is part of that, which is why Jakem’s first ever comment was let through. We exclude trolls by requiring that first comments by a new handle are all auto-moderated. I excluded a number of first comments that didn’t manage to raise any point at all apart from that they didn’t like the post.

          But ‘robust debate’ includes that personal goads are often useful for driving home behavioural changes on the site.

          In this case that while Jakem looked like they were trying to make an argument, they also they didn’t appear to me to have actually have read the whole of the post that they were criticising. So they sprouted dogma rather than an argument based on that dogma. So I pointed that out while also offering my personal opinion about how they looked to me – probably ignorant troll as a goad to do better.

          I then dropped them into provisional approval for further moderation. If they only focus on the goad, then they probably are a troll. If, unlike you, they were astute enough to see the point that they hadn’t offered any argument and offered one – then they drop out of auto-moderation.

  19. Yo 19
    24 August 2024 at 6:33 pm

    Hmm. Moderators can't handle the truth?

    [lprent: We just have a policy about first time commenters. All new handles in use have to have one comment passed by a moderator before they can comment freely. Since we are a voluntary site, you will find that moderators will deal with comments in auto-moderation when they get around to it.

    We use this human oversight to weed out robots, idiots, and trolls. But also from stupid people who can’t write a coherent comment that contributes to a robust debate (see the policy). That latter describes you.

    Looking at your first comment…

    • When quoting from anything. Your comment needs to distinguish between what is quoted and what is your opinion. We even provide a quoting tool to make it easy. Clearly you did not use it and the quote you used ran straight into your opinion. It made it appear as if it was part of the quoted material.
    • When quoting from anything, we’d expect you to provide a link to it. So if quoting from stats press release – link to it.
    • Quoted material should be relevant to the content of your opinion in the comment. Your paragraph of opinion had no referral back to the quoted material.
    • What looks like your opinion was massively inaccurate. Everyone in NZ ultimately comes from a migrant family over the past millennium. NZ was empty of humans prior to the Polynesian migrations. The statutory annual holidays in NZ are 4 weeks, not 3.
    • Which left a just these sentences as your content – “The country would be way more productive if all of its citizens left and let the immigrants do the work. And the thinking.” which is an assertion of fact without an argument. Which has no value in a robust debate because you haven’t explained why that is your opinion, nor provided any credible link to support the ‘facts’.

    Overall you read like a very dumb troll possibly writing in from overseas without any current knowledge of NZ. Also one who appears to be trying to use content from the stats to cover a stupid comment. That is may pass automated spam chasers. But is pretty useless when a human analyzes the comment.

    I have left your handle on moderation probation, because it’d amuse me to see if you answer these points. ]