Bill and John’s 4th term is looking dicey, and so are the tax cuts

Economy, economy, economy.

National have had the benefit of a well performing one for the last 2 election results, but unless that milk market perks up, they’re staring down a very tricky campaign in 2017.

New Zealand’s central bank has warned that a prolonged slump in dairy prices could get worse, forcing interest rates down to maintain growth in the farm-reliant economy.

Reserve Bank of New Zealand governor Graeme Wheeler said today the price of whole milk powder had plummeted 63 percent since February 2014 and was still under pressure.

“High stockpiles of whole milk powder in China, the increase in global milk supply, and the trade diversion issues involving Russia make for a very uncertain future, with the potential for further downward pressure on global dairy prices,” he said.

The Reserve Bank keeps a close eye on milk prices because New Zealand is the world’s largest dairy exporter, selling some NZ$15 billion a year, about a third of the country’s entire exports.   Read more »

Bill’s tax cuts are back. Roll on up for an election spending spree

Bill English is back to talking about tax cuts…just in time for a nice long roll up to the 2017 election.

First up he dismisses talk of a recession.

Falling dairy prices are not as disastrous for the economy as they seem and the country is not heading for a recession, Finance Minister Bill English says.

Mr English told TVNZ’s Q+A this morning that the dairy industry was “probably a smaller part of [the economy] than most people think”.

“I think we’ve got to keep the dairy industry in perspective,” he said.

“It’s about 5 to 6 per cent of the whole economy. It’s only 20 per cent of our exports. The other 80 per cent will be starting to enjoy the benefits of the lower exchange rate, and the lower exchange rate will help cushion the impact on dairy of their lower prices.”

When asked by TVNZ’s Simon Dallow whether he agreed with Steven Bayliss of BNZ that New Zealand had a “recipe” for recession on its hands, with low dairy prices coupled with a potential drought and falling Christchurch house prices, Mr English said he thought the prediction was overstated.   Read more »


Explaining is losing, so Steve Joyce refuses to answer

As we all know explaining is losing, but there is an alternative, which Steve Joyce used on The Nation…refusing to answer.

Of course that just then leads to accusations of hubris and arrogance…something Steve Joyce has in spades.

Economic development minister Steven Joyce is dismissing talk of an economic recession but admits “the job isn’t done in the economy”.

The economy is facing some challenges but they must be kept in perspective, Joyce told TV3’s The Nation on Saturday.

“We shouldn’t talk ourselves into a funk. We should focus on what we now know works for New Zealand, and that is we’ve seen a recipe over the last five or six years which is really working for this country. This is a reminder that we keep pushing in those directions, that we keep opening up to world trade, that we keep encouraging investment in our economy, that we keep building the innovation in our industries. Those are the things that are important,” Joyce said.

His comments came as a bank economists pointed to further cuts to dairy payouts, interest rates and economic growth forecasts.

[…]    Read more »


John Roughan: Nature, business and the RMA

Let me ask this. Is the protection of New Zealand’s natural environment more important than its economic development? Or are they equally important?

I know, too easy.

So try this. Must they be given equal consideration under the law that governs almost everything New Zealand industry can do?

I had assumed so, too. The vast majority of us, I suspect, have supposed the Resource Management Act, for all its drawn-out procedures, allowed economic benefits to be weighed against environmental costs.

Not so. That became evident last year when the Government tried to write economic considerations into the act. An outcry erupted from non-government organisations. It came not just from the extremes of Greenpeace but from reasonable voices such as Gary Taylor’s Environmental Defence Society and the Fish and Game Council.

The “father” of the RMA, Sir Geoffrey Palmer, weighed in with a warning that to give equal standing to economic development would upset nearly 25 years of case law under the act.

By implication, and sometimes admission, they told us environmental arguments could not compete with economic gains if they were given equal consideration.

I’m not sure that’s true.   There is a balance to everything.   The problem is that the balance is currently way too far towards preservation at all costs.   As with most things in life, positions on the extreme ends carry a high opportunity cost.   Read more »

Does Russel Norman stand by all his statements?

The Green party likes to ask the gotcha question of the Prime minister…Does he stand by all his statements?

Well time for the show to be on the other foot.

Does Russel Norman stand by all his statements?

Russel Norman’s talking down the economy again – lamenting the state of the dairy industry.

Falling dairy prices are highlighting the danger of National’s economic strategy that focuses on the export of a few, simple commodities, the Green Party said today.

Dairy prices are down 8.4 percent this week – a 41 percent fall from their highs in February. Whole milk prices are down 11.5 percent largely due to weaker demand from China.

“National’s economic strategy has simplified our economy and concentrated our exports on a few, low-value-added commodities,” said Green Party Co-leader Dr Russel Norman.

“We want businesses to get on with innovating and exporting high value products that command high prices and support high wages.”

“National has bet the farm on the farm and it isn’t working. A growing reliance on one or two commodity exports has made our economy more vulnerable to commodity price swings.

“Producing increasing amounts of milk powder also has huge, downstream environmental impacts. We need to build a smart green economy with much lower carbon emissions and water pollution.

“A smarter way forward is to invest in innovation and policies that support our manufacturing and ICT export sectors.

“National is not building a strong, resilient export sector.”

Perhaps someone might like to ask him:   “You are proposing a carbon tax of $25, starting at $12.50 on all dairy farmers. You said at the time “they could afford it”. Now that dairy prices have fallen 41% are you going to abandon that policy?”

Read more »

More good news

No matter how hard Labour tries to trash talk eh New Zealand economy, all indicators are showing the economy is recovering fast.

All regions across the country recorded growth in the number of jobs advertised on Trade Me Jobs according to an analysis of listings onsite in the April-June quarter.

Head of Trade Me Jobs, Peter Osborne, said the number of job listings nationwide was up 19% on the same period in 2013, continuing the healthy job market trend evident since the September quarter. “Growth in listings has been very strong, despite the potential handbrake effect of the unusual combination of Easter and Anzac Day holidays in March, and a Budget that had a cooling effect on the number of jobs advertised in May.”

Mr Osborne said most advertisers were upbeat. “We’re hearing plenty of optimistic reports from recruiters and employers, and the majority are planning to keep on hiring too.”

He said improved economic and employment opportunities in New Zealand also contributed to the lowest ever level of migration to Australia in May. “Kiwis are increasingly likely to stay in New Zealand which is good news for NZ Inc, and is also complemented by returning expats who have noticed things on the improve back here in New Zealand.”  Read more »

The crisis continues

via Idealog

via Idealog

When will this damn economic/manufacturing crisis end?

New Zealand manufacturing activity expanded for an 18th straight month in February with signs a buoyant economy is creating jobs.

The BNZ-BusinessNZ seasonally adjusted performance of manufacturing index edged lower to 56.2 in February from an upwardly revised 56.3 in January, and 55.4 in February last year. A reading above 50 indicates expansion in the sector.   Read more »

More good news

The good economic news just keeps on flowing, not so you’d notice in either the mainstream media or from utterances from an increasingly negative opposition.

Exports are soaring…despite, I might add, a high NZ Dollar.

In the December 2013 quarter, seasonally adjusted dairy export values rose 27 percent, Statistics New Zealand said today. Dairy volumes, after adjusting for seasonal effects, rose 23 percent while actual prices fell 1.1 percent.

Total export volumes rose 9.7 percent in the December 2013 quarter while total export prices fell 0.5 percent. Both movements were strongly influenced by dairy, which accounted for 39 percent of the value of goods exported in the December quarter – twice as much as meat and forestry combined.  Read more »

More good news

Labour is really going to find it hard to continue to bad mouth the government and the economy as the economic news just keeps on getting better and better.

The latest ANZ business outlook survey has business confidence at a 20 year high.

Business confidence survey readings are the strongest we’ve seen since  1994.

  • A net 71 percent of firms are optimistic about general prospects – the highest reading since March 1994.
  • Firms’ activity expectations regarding their own business (+59) rose to the highest reading since June 1994.
  • Expected profitability (+45) is the highest since April 1994.
  • A net 32 percent of businesses expect to be hiring more staff – the highest reading since December 1992.
  • Investment intentions (+35) are the strongest since March 1994.

Read more »

Still more good news

The good news just keeps on rolling in as the economy hums.

Anecdotal evidence form the likes of trucking firms is starting to be confirmed in hard statistics.

No amount of trash talking New Zealand from the opposition parties can stop an economy in recovery.

New Zealand business confidence climbed to a 20-year high in the fourth quarter, lifting expectations for profits, hiring and investments, and raising the prospects for inflation to start to accelerate.  Read more »