rmacculloch

Aug 31, 2022
1 min

NewsFlash: Inland Revenue Minister David Parker Caves in to the Bankers

In the few hours since our last blog, which described how our nation's economic policy has descended into "comedy" as Labour tried to put GST onto the already-highly-inflated Kiwi Saver fees charged by big financial institutions, with National opposing the move, the comedy has turned into farce as Labour has just decided to abandon such proposals. Neither of our two main political parties was prepared to address the root of the problem which was described in our last blog - n

rmacculloch

Aug 31, 2022
2 min

A Solution to the Kiwi Saver Tax Debacle

Labour has attracted a flurry of angry headlines over its just-revealed plans to charge GST on fees paid on KiwiSaver accounts, which could net the government millions a year in additional revenue. Associate Finance Minister Megan Woods told Newstalk ZB's Mike Hosking Breakfast the current legal situation relating to GST on Kiwi Saver fees is a mess that needs to be addressed ... "This is about correcting an anomaly that really has allowed some .. very large managed funds to

rmacculloch

Aug 19, 2022
2 min

The RBNZ Governor's US Bloomberg interview was highly amusing (for all the wrong reasons)

Just over a year ago RBNZ Governor Orr was interviewed by Bloomberg Television & said: "Inflation is a very different beast today than it was in the 1970s, giving central banks the confidence to look through a short-term spike in prices .. The fear of the 70s, the 80s, stagflation, it is such a different world . There is a single global price for so many of the raw materials, the intermediate inputs and the final consumer goods. We google that, we are prepared to wait. We don

rmacculloch

Aug 17, 2022
2 min

The RBNZ's "Summary Record" of its OCR announcement is one big fat political "Non Est Mea Culpa".

For a macroeconomist, the Reserve Bank's Press Release of the "Summary Record" of the meeting of its Monetary Policy Committee today, which raised the OCR to 3%, is so embarrassingly cringeworthy that it is hard to read. It is largely devoid of economics, but stocked full of politics. It amounts to one big essay on behalf of the members of the MPC trying to shift blame away from themselves for NZ's high inflation rate. Instead it argues that the war in Ukraine, "lockdowns in

rmacculloch

Aug 16, 2022
2 min

Whilst Kiwis Suffer, the Big Banks Play the "Great Game", aided by the RBNZ & Government.

Most days now in the lead-up to the Reserve Bank Official Cash Rate (OCR) announcement (it is expected to rise from 2.5% to at least 3.0%) media outlets are featuring articles on how much rates need to rise to conquer inflation. As far as I can work out, the Big Bank economists have largely morphed into PR and Comms types who are regularly in touch with the likes of the Herald appearing to helpfully explain how it all works, often complete with huge photos of themselves. Look

rmacculloch

Aug 15, 2022
2 min

The NZ Herald has made assertions that appear to be refuted by scientific evidence

We recently heard about a deal between the government and the "Shortland Street" show related to promoting the recruitment of nurses. The Otago Daily Times reported (below), "Government spending on boosting nurse recruitment through TV soap Shortland Street & TVNZ is commercially sensitive and will not be made public, a spokesperson says". Why is it in the public interest to know about advertising deals between media outlets & governments? Because the media has been shown to

rmacculloch

Aug 4, 2022
2 min

In order to defend the RBNZ, the Herald diminished economics, by calling the subject "all political"

The NZ Herald's "Business Editor at Large", in order to defend the actions of our Reserve Bank these past years, had this to say about things written in the recent report authored by the former RBNZ Governor Graeme Wheeler & NZ Initiative fellow Bryce Wilkinson which critiqued the Bank's performance (along with several other Central Banks): "Like all economics, it is political". On and on the Herald goes with its lecture about the subject that I have studied for 30 years: "Ec

rmacculloch

Aug 1, 2022
2 min

More RBNZ Inflation Danger: a 2.5% OCR is not "neutral" - it is stimulatory (according to Summers)

When you lack the monetary economics expertise to make decisions in the best interests of your own nation, then you copy others. But it can lead to disaster. The main reason why our Reserve Bank took the money printing / Quantitative Easing road was because other central banks were taking it. The bureaucrats figured that even if they ran into trouble by doing so, their excuse to save their own jobs would be, "Well, that's what others did". They called it "least regrets". The

rmacculloch

Aug 1, 2022
1 min

Did the PM just get her economics wrong?

The news is dominated today by the welfare payout of $350 which is being made to "New Zealand tax residents over the age of 18 who earned up to $70,000 in the last financial year". Apparently over 2 million are set to receive it !? The PM rebuffed claims that the payout would be inflationary: "A tax cut would also likely contribute to inflation but offering a targeted, time-limited payment would limit the possibility of that according to Treasury", she said. Hang-on. First,

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Robert MacCulloch

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