Bernard Hickey

How the Aussies view our economy…with jealousy

Michael Pascoe writes about the NZ economy in the Sydney Morning Herald.

It’s bad enough losing the rugby, but in 2014 Australians will have to suffer Kiwis getting uppity about their economy as well.

While our economic growth is stuck around 2.5 per cent, there’s talk New Zealand could be doing double that by the middle of the year.

For so long the poor cousins across the ditch, it’s the Kiwis’ turn to ride the China resources roller coaster, with all the fun and fear that can engender. The commodity is different but the fundamental story is much the same as the China boom that lifted Australia over the past decade.

What iron ore and coking coal did for Oz, milk powder is doing for New Zealand. Forget the clichés about New Zealanders and sheep – it’s cows that are making Kiwis feel good now, as well as the All Blacks having an undefeated year.

And they are feeling good. An ANZ bank survey this month found NZ businesses the most confident they’ve been since 1994. House prices and wages are rising and consumers are spending more – the government is expecting consumption growth of 2.8 per cent while Australia struggles to manage 2 per cent.

New Zealand’s terms of trade are at their highest since 1974, giving the average Kiwi sharply stronger buying power. It’s not so expensive for Kiwis to visit the relatives in Australia – but the land of the strangled dipthong is no longer a cheap holiday for Australians. The Kiwi dollar started the year above $1.26 to the Aussie. It’s finishing at $1.09.

Milk powder prices are up by more than 50 per cent this year and China has overtaken Australia as New Zealand’s biggest trading partner. Fonterra, the world’s biggest dairy exporter, can’t keep up with the demand and finds itself caught by its cheese and butter operations holding back overall performance.

The impact of Chinese demand for milk solids is also behind the never-ending Warrnambool Cheese and Butter takeover saga. It must sadden those who saw productive Victorian dairy farms turned over to tax-driven blue gum plantations.

Its all about protein…and we are best at producing it, whether it is in milk or meat. Pascoe trips up though and quotes Bernard hickey who is more often wrong than right in his prognostications.

But the extent of New Zealand’s reliance on a single commodity and a single customer worries some. New Zealand Herald commentator Bernard Hickey makes the point that the country’s second-largest trade partner, Australia, also is reliant on China and that Kiwis carry much more debt than when they last depended on a single market – England. He didn’t use the term “Dutch Disease”, but it was there between the lines.

Just as China has encouraged a greater diversity of iron ore sources, it can be expected not to rely indefinitely on NZ. The Middle Kingdom also desires to increase and improve its own dairy capacity, but faces water limitations for what is a very water-intensive industry. (That’s why those soggy Kiwis are so good at it, despite suffering what they thought was a drought last year.)

In the meantime, the $NZ40 billion rebuilding of Christchurch will provide its own increasing stimulus for the NZ economy. The Reserve Bank of New Zealand is expected to start increasing interest rates in 2014. It’s already attempting to cool the housing market through macro prudential means – a move the Reserve Bank of Australia admits it’s watching with interest. And rising rates should further support the Kiwi dollar.

While our Treasury forecasts Australia’s unemployment will nudge up to 6.25 per cent, New Zealand’s is 6.2 and falling from a high of 7.3 last year, twin factors that can be expected to reduce the usual migration flow. Australia has done well out of its Kiwi migrants. Given the direction of the New Zealand currency, we might have left it a wee bit late to stock up on five-eighths and sauvignon blanc.

Yet there’s always a silver lining. The last time Kiwis were this chipper was 1994 – when the Wallabies won the Bledisloe Cup with “that tackle” by George Gregan. Maybe a richer New Zealand also is a softer one.

Pinko lobby group needs remedial spelling lessons

A bunch of pinkos have a lobby group, one that produces all sorts of ‘think’ pieces telling us how they think that we should live our lives.

They are currently advertising on Facebook.

But these spinners can’t even spell…and they presume to tell us how to live? if they are committed to bringing positive change perhaps they’d like to start with some remedial spelling lessons.

change-spelling Read more »

Drinnan on blogger remuneration

John Drinnan laboriously writes about bloggers and remuneration. Interesting that he didn’t bother to ring me for comment yet felt obliged to use my name to make some sort of point.

Canterbury University senior lecturer in journalism and new media Donald Matheson says bloggers risk being called hypocrites if they accuse professional media about lack of transparency while not declaring payments from other sources.

Really? …does Fran O’Sullivan declare all her other income at the bottom of every article she writes? Does Bernard Hickey? What about Russell Brown’s multiple sources of income. What a sanctimonious twat. Plenty of people in the media do multiple jobs and work on multiple contracts. They also take separate advertising revenue and perform consultancy work, not to mention the lucrative speaking circuit…why the focus on bloggers and what and how they earn money? Everyone else in the media gets paid somehow and no one digs into that.

The only people I need to declare my income to is IRD. Everyone else can get stuffed.   Read more »

Oh the hypocrisy from the Herald

I see the Herald has an article that quotes Bernard Hickey and other commentators where they are surprised that banks are offering freebies for people to sign up new loans – “buying your business with your money”.

Flat-screen televisions, cash for groceries and even iPads – banks are competing to offer more attractive prizes to sweeten home loan deals as higher interest rates are forecast.

But commentators warn the prizes should be viewed only as a bonus once a loan has been settled.

One says the giveaways are “essentially buying your business with your money”.

With little separating their advertised fixed mortgage rates, banks are dangling “free” giveaways to lure prospective customers from rival banks.

Oh how terrible…

Dr Claire Matthews, of Massey University’s centre for banking studies, said people should study the entire home loan deal – including fees, terms and conditions – before being tempted by cash or giveaways.

“It might be that if you’ve got two banks that are almost identical, and one is offering a 52-inch television, then, hey, you might as well go for the television as well.

“But if somebody is offering a better deal, despite the 52-inch television you may not be better off.”

Economic commentator Bernard Hickey said similar giveaways were seen during the 2002-2007 property boom.

“But then, the banks tended to simply use price as their main way to win market-share. This time, they are being a bit more cautious about that, mainly because they want to preserve their profit margins.

The cost of such incentives were often simply added on to the mortgage, Mr Hickey said.

“What they are doing with these offers, is essentially buying your business with your money.”

And what about the Herald? They offer free stuff to win subscribers…plus their reader promotions…they even use a call centre to beg people to stay with free newspapers.

What a bunch of sanctimonious hypocrites.


Is this Labour’s next policy initiative?

Labour follows closely behind the UK in its policy making. In the UK they have the Fabian Society and a branch has been formed here in New Zealand for hard core Labour lefties.

Selwyn Pellett, Bernard Hickey and David Parker et al are all either members or contributors of the Fabians in New Zealand. One wonders if they will take the lead of the UK and implement a policy like that proposed over there…raising taxes off of the back of those filthy rich pensioners?

Pensioners’ taxes should increase, their benefits be cut, and a tax on property wealth should be introduced in order to share the pain of austerity with today’s hard-up workers, a think-tank said today.

The income gap between pensioners and workers has shrunk massively in the last few decades, so taxes should be raised on those in retirement, the Fabian Society said.

Middle-income working households enjoyed an income 93 per cent above that of middle-income retired households when Margaret Thatcher came to power in 1979, but that figure is now 37 per cent.

High-levels of home ownership among older people means the older generation are in effect far better off, as middle-income workers’ wages now stagnate and they cannot afford to buy a home.  Read more »

Rupert Murdoch on equality and the scourge of corporate welfare

At Quadrant Online, Gina Rinehart blogs about Rupert Murdoch’s speech to the Institute of Public Affairs:

I arrived in Melbourne in good time to neaten up for a dinner function celebrating the IPA’s 70 years. Although it seems a long way to fly from Tokyo for dinner, it was fantastic to see so many friendly and enthusiastic people. Thank you to all the friends and new friends who came to chat with me.

I spoke briefly, but it was the other speeches that made the night so worthwhile, including the address by IPA award winner Rupert Murdoch. He said the sort of things Baroness Thatcher would have appreciated because, like him, she strongly believed free societies are moral and socialism is not.

The speech she was talking about said this in main:

How often have you elected political leaders to fight against some horrible regulation or tax, only to watch as they basically agree to a watered down version of what their opponents are arguing?

Placating a nation is not leading a nation.

So long as we allow the debate to be framed by people who think the market is efficient because it is based on a human failing, we are going to lose every argument.

The only way to uphold market freedom is to show people that the market doesn’t succeed because of greed. In fact, it’s just the opposite.

The market succeeds because it gives people incentives to put their own wants and needs aside to address the wants and needs of others. To succeed, you have to produce something that other people are willing to pay for.

Of course the socialists would have you believe otherwise.

Matt Ridley is a British author who has given great thought to these issues. He wrote a famous book called The Rational Optimistthat many of you must know. He points out a few simple facts:

First, that today by almost any measure you can think of, people on this planet are better fed, better sheltered, and better protected than they’ve ever been – and that prosperity has really accelerated in the last 100 years. lndeed, that the average person’s standard of living has improved ten fold – yes, ten fold – in the last century.

Second, he says that the key is simply trade, or the interchange of goods, services, and ideas among people.

Let’s put this in human terms. Recently the World Bank reported that in 1981, 42% of people in the developing world had to live on less than a dollar a day. That is one-and-a-half billion people in poverty or starvation.

Thirty years later, the percentage has been reduced to 14%, a huge change in a relatively short period of time. What could be more moral than that?

This is unparalleled in history.  Read more »

Bernard Hickey won’t be pleased with this report

Bernard Hickey and his Labour party pals won’t be happy about this from the IMF.

IMF managing director Christine Lagarde was full of praise last night for the direction in which the New Zealand economy was headed.

After meeting Prime Minister John Key on the fringes of the Bo’ao Forum for Asia, in China, she talked to New Zealand reporters about the general health of the economy in light of a recent assessment of fiscal and monetary policy.

“All I can tell you is the IMF is very supportive of what is being done by the Government in that respect.  Read more »

Latest Truth on sale today

The latest Truth is on sale today.


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That crazy Bernard Hickey

Wow, what a guy.

Fresh from telling anyone who’ll listen that NZ’s biggest problem is its addiction to property, Bernard Hickey is now telling punters to get in quick to borrow against their home.

It seems that Esteemed Bill English (or Wiremu Pakeha as he is known as in Tuhoe) and the Reserve Bank is soliciting feedback on Loan value ratios, or LVRs.

This means that banks may not be able to loan more than a certain amount on a home, maybe 80%. (You will remember in the property boom 5-10 years ago, you could get 105%, because you needed a plasma TV to go with your Grey Lynn villa).  Read more »

Do As Hickey Says Not Does, Ctd

Another prediction fail from Bernard Hickey…I wonder if he will honour his bet, he should do now he is cashed up.