Economy

The PM’s gaffe: Why it matters

While she writes fluff pieces about 125 years of women’s suffrage and does interviews and photo shoots around the subject, Jacinda Ardern needs to take the time to develop even a small understanding of the economy, what reports are produced and when, and above all, what GDP is.

This is because what happened on Tuesday when she was talking to Mike Hosking was, to say the least, deeply embarrassing. She clearly had no idea what he was meaning when he asked about the GDP figures, and the conversation went on without her having even a small clue about what they were talking about.

The reason it matters is demonstrated admirably by the fact that the dollar rose almost a cent against the US dollar, on the back of a ‘hint’ from the prime minster that the June GDP figures were going to be good news.

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Accountant. Boring. Loves tax. Needs to get out more. Loves the environment, but hates the Greens. Has been called a dinosaur. Wears it with pride.

To read my previous articles click on my name in blue.

2 million Countdown bags in the rivers each year

Yes, that is the frightening statistic from Countdown’s Craig Taylor.

“42,000 plastic bags going into waterways every week” equals 2,184,000 Countdown plastic bags going into waterways every year.  How many have you seen floating by?

The article is not clear whether “all stores” means all 10 in the Bay of Plenty or all Countdown stores in New Zealand so I checked with the Countdown website.  It seems that the 2 million per year is only in the Bay of Plenty.  “Countdown […] will remove around 350 million plastic bags from circulation each year!”

It is, indeed, depressing that people in the beautiful Bay of Plenty take their 42,000, so-called, single-use plastic bags from the Countdown checkout and dispose of them in the nearest creek or river.

But it is so heartwarming to note that Countdown is replacing the, so-called, single-use plastic bags with “eco-bags”.  You see, adding “eco” to anything makes it good, acceptable and environmentally friendly.  Eco-bags cannot migrate to waterways – Eugenie will be so pleased. Read more »

In solidarity with the those in the world’s most despised demographic, WH has decided to ‘come out’ as an old white male. WH enjoys exercising the white-male privilege that Whaleoil provides for him by writing the occasional post challenging climate change consensus; looking at random tech issues that tweak his interest, as a bit of a tech nerd; or generally poking the borax at anyone in public life who goes on record revealing their stupidity. WH never excelled on the sports field because his coaches never allowed him to play in his preferred position on the right-wing. WH also enjoys his MG.

To read my previous articles click on my name in blue.

Business confidence still plummeting

 

Stuff reports that business confidence is still falling, reaching new lows in August. quote:

Business confidence continues to slide, with more companies planning to cut back on investment in the coming year.

The latest ANZ business outlook survey for August showed headline business confidence – a which has become a highly contentious measure – dropped a further 5 points, with a net 50 per cent now expecting conditions to deteriorate.

Own activity – a measure of what business figures expect to see from their own companies – was flat. The measure tends to be a better indication of economic growth. end quote

This survey was taken before the announcement of the Business Advisory Council this week, but it seems unlikely that this will make much difference to business confidence. Really, it is just another advisory group, and in spite of the claims that it won’t be another ‘talkfest’, that is exactly what it will be. quote:

But at a net 4 per cent expecting conditions to improve in the coming year, the measure suggests the economy growing at well below average.

The New Zealand dollar dropped on the news, down around one third of a cent against the US dollar. end quote.

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Accountant. Boring. Loves tax. Needs to get out more. Loves the environment, but hates the Greens. Has been called a dinosaur. Wears it with pride.

To read my previous articles click on my name in blue.

A trillion here, a trillion there

If you have tried to create any new business with a financial organisation recently you will know that it is now extraordinarily difficult.

You need your first cousin, twice removed’s blood type, the day of the week that your cat was born on, the results from your first spelling test in primary school and all manner of other stuff to ‘prove’ you are who you say you are. Once that is established to their satisfaction you need to be able to prove where you got the dosh from in the first place.

It is all part of K.Y.C. and A.M.L procedures that all banks and financial institutions, lawyers and real estate agents are getting lumbered with.

Know Your Customer (K.Y.C.) and Anti Money Laundering (A.M.L.) is being forced upon us for the usual reason; terrorism.  But it is really just another branch of state control and the move towards the cashless society so that everything we buy and sell can be tracked more easily.

Obviously, this money laundering stuff must be pretty big beans if governments all around the world are throwing this much effort into ensuring that it does not happen, right?  There must be hugely significant sums of ‘black economy’, under-the-table cash floating around that need to be mopped up. Read more »

In solidarity with the those in the world’s most despised demographic, WH has decided to ‘come out’ as an old white male. WH enjoys exercising the white-male privilege that Whaleoil provides for him by writing the occasional post challenging climate change consensus; looking at random tech issues that tweak his interest, as a bit of a tech nerd; or generally poking the borax at anyone in public life who goes on record revealing their stupidity. WH never excelled on the sports field because his coaches never allowed him to play in his preferred position on the right-wing. WH also enjoys his MG.

To read my previous articles click on my name in blue.

Ban the bags

Seldom do I agree with any policies put forward and championed by the Green party, but in regards to the phasing out of single-use plastic bags, I make an exception.

I am in favour of this policy for the following reasons:

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ORANGE

  • A large round juicy citrus fruit with a tough bright reddish-yellow rind.

AMBER

  • Hard translucent fossilized resin originating from extinct coniferous trees of the Tertiary period, typically yellowish in colour. It has been used in jewellery since antiquity.

ORINJAMBA

  • Fifth generation Kiwi, social-political writer who left the Left sometime back and turned right. Heavily reliant on spell check with hopefully the intelligence to admit when he’s wrong and the humility to see the truth, irrespective of where it’s found.

To read my previous articles click on my name in blue.

Tagged:

More bad economic news

 

Finance minister Grant Robertson. Photo / Mark Mitchell

The government is denying that there is bad economic news out there. They simply aren’t listening as more news stories pile up about the state of the economy: Quote:

Kiwi investors have lost confidence about seeing increasing returns, with their expectations of term deposits contributing to a recent decline, according to ASB.

The latest ASB Investor Confidence Report found net investor confidence – the difference between those who thought return on investment would improve in the next year and those who thought it would get worse – fell from positive 21 per cent to positive 16 per cent over the three months to June. 

It’s a continuation of a downward trend that the bank has noticed since the start of 2017, though sentiment is far higher than the 3 per cent low witnessed at the start of 2016.

The majority of investors were still positive about seeing returns.

Twenty-seven per cent expected returns from their investments in the next 12 months to increase, 40 per cent expected returns to stay the same, and 12 per cent thought returns from their investments would decrease.

“Investor confidence has eased off the peak at the start of the year, but remains well above the levels of a couple of years ago,” said ASB senior wealth economist Chris Tennent-Brown.

Housing continued to be regarded as a good investment.  End quote.

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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.

To read Cam’s previous articles click on his name in blue.

Opinion: Adrian Orr’s crystal ball

Adrian Orr, Reserve Bank governor

The role of the Reserve Bank governor has always been one of a very conservative banker with a reserved persona. Think Don Brash or Graham Wheeler. The job description requires the governor to steady the ship, adopt a ‘no surprises’ policy, and take all necessary steps to protect the banking system and to keep the economy working and the money flowing.

Adrian Orr has decided to take a more ‘transparent’ approach. While transparency might be highly desirable in government, it is not always a good thing in the banking sector.

It does not take much to spook the markets. A slightly overstated company profit forecast and the share price drops 20%. Anything remotely negative (ANYTHING) and the market loses 5% of its value. That is everyone’s KiwiSaver and everyone’s investment portfolios. All forms of investment are affected.

So, when you have a Reserve Bank governor that thinks he is also psychic, you are in trouble.

Stuff reports: quote:

Adrian Orr’s latest move as Reserve Bank governor appeared to deliver something for everyone, at a time when the state of the economy is the subject of so much debate.

In suggesting that he would keep the official cash rate (OCR) at the record low 1.75 per cent until 2020, it appeared on one level to signal that the Reserve Bank was doing almost nothing, but the issue was up for debate.

At a time when business confidence is low, Ardern said Orr was talking about how “there is certainty for business looking to invest now, and he’s encouraging businesses to go out and do that”. end quote.

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Accountant. Boring. Loves tax. Needs to get out more. Loves the environment, but hates the Greens. Has been called a dinosaur. Wears it with pride.

To read my previous articles click on my name in blue.

Time to pick sides on Iran

Donald Trump has said that anyone who trades with Iran will not trade with the US: Quote:

US President Donald Trump on Tuesday warned that any country doing business with Iran will not trade with the US as the first set of US sanctions against Iran that had been eased under the landmark nuclear accord went back into effect.

The sanctions, under an executive order signed by Trump, target financial transactions that involve US dollars, Iran’s automotive sector, the purchase of commercial planes and metals including gold.

More US sanctions targeting Iran’s oil sector and central bank are to be reimposed in early November. End quote.

Read more »

As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.

To read Cam’s previous articles click on his name in blue.

Rodney Hide deals to Jacinda

Our wonderful prime minister is so strong on business and the economy that she insists that she knows better than business leaders and that there is no reason for them to be downcast. The economy is doing just fine. She knows this, and she just refuses to accept any other view, because… she knows this.

Well, Rodney Hide, writing for the NBR (sorry, it is behind a paywall, so not much point in putting up a link) happens to disagree with her. quote:

Memo to the PM: Leave business alone

The Prime Minister has crashed my confidence in the new government to a new low, says Rodney Hide.

Jacinda Ardern said it herself on becoming prime minister: “Capitalism’s … a blatant failure.”

Prime Minister Jacinda Ardern had this to say just before returning to work: “I absolutely believe our agenda will build the economy, will make sure businesses are in a position to grow and prosper because I need that economic growth to be able to lift the wellbeing of all New Zealanders.”

With those words the prime minister collapsed my confidence in the new government to a new low. end quote.

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Accountant. Boring. Loves tax. Needs to get out more. Loves the environment, but hates the Greens. Has been called a dinosaur. Wears it with pride.

To read my previous articles click on my name in blue.

Vindication for Steven Joyce

Although it is a year too late.

Former Finance Minister, Steven Joyce

You will all remember how, this time last year, Steven Joyce claimed that Labour, in their election campaign, had an 11.7 billion dollar fiscal hole. Steven was ridiculed by economists and journalists alike, but he stuck to his guns. It was so bad that his poor marks at university for economics papers were dragged out, and it was claimed that his knowledge of economics had not improved. He was the Minister of Finance at the time.

RNZ, in this article from September last year, fell just short of ridiculing Mr Joyce, presumably claiming that what he was doing was effectively ‘politicking’. quote:

Mr Joyce insisted today that outside of laying down its spending on health and education, Labour had left no allocation for increased spending in any other area of government.

“Either they’ve mucked up the allowances and it’s an $11.7 billion hole, or they’ve just ignored the expenditure they’d have to make over the next four years – which is also an $11.7 billion hole.”

He said Labour’s figures would mean a two-year freeze on most government expenditure, with no new money for things like funding for the new Ministry of Vulnerable Children.

BERL, an independent company Labour employed to check its books, stood by its work. Chief executive Ganesh Nana said Mr Joyce was categorically wrong.

“It’s just pure fiction, based on disagreement over definitions. Nerds like me love it, but I wouldn’t expect voters to be at all interested in what an operating allowance is. I would expect voters to be more interested in where is the spending happening, and is that spending actually worthwhile?”

The New Zealand Initiative – a libertarian think tank – said National appeared to have made a basic accounting error in its criticism.

ANZ chief economist Cameron Bagrie also suggested Mr Joyce went too far in saying there was a “hole” and said that term was “too strong”. end quote.

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Accountant. Boring. Loves tax. Needs to get out more. Loves the environment, but hates the Greens. Has been called a dinosaur. Wears it with pride.

To read my previous articles click on my name in blue.