Cavoodles, COVID and the Consumer Price Index (CPI)

rmacculloch

Dec 22, 2022
1 min

Cavoodles, COVID and the Consumer Price Index (CPI)

As we complete our Christmas shopping, the Aussie Bureau of Statistics has studied how COVID has changed our spending patterns. This is important since the Consumer Price Index, which is used to measure inflation, depends on the proportion of our budget spent on each item in the basket of goods & services that it is based upon. I expect similar changes to those reported in Australia have also occurred in NZ. On that note, the biggest fall in spending post-Covid (as measured i

Is this how King Charles III will look on NZ's bank notes?

rmacculloch

Dec 20, 2022
1 min

Is this how King Charles III will look on NZ's bank notes?

The Bank of England has unveiled the portrait of King Charles that will be used on their new bank notes, to be released in 2024. It will look like this: Meanwhile, NZ's "Series 7" banknotes are not made in NZ. They are made in Canada by a privately owned company, called "The Canadian Bank Note Company" (CBN) in Ottawa. We are even a Case Study featured on their website: https://cbnco.com/currency/ Creating a new series of banknotes for the Reserve Bank of New Zealand In 2011,

rmacculloch

Dec 19, 2022
2 min

Newsflash: Christmas Sales are Bust and Boom, both at the Same Time, according to Kiwi Media Inc.

According to Newshub today, Christmas sales are bust: "Orr warned Kiwis to be prudent with their spending this Christmas. It appears that message has got through". A Westpac survey has found "the number of households who believe it is a good time to make a major purchase has fallen to a record low .. Those subdued spending appetites point to some soggy spending numbers over the Christmas shopping period" . Yes, those Big Bank economists are at it again, receiving never-endin

Forecasting House Prices: DownToEarth disagrees with Treasury & Sir John Key. Let's see who wins.

rmacculloch

Dec 16, 2022
2 min

Forecasting House Prices: DownToEarth disagrees with Treasury & Sir John Key. Let's see who wins.

The Treasury are forecasting house prices will start bouncing back to match their previous all-time high late in 2026, on the back of rising household incomes & falling interest rates. Sir John Key is also bullish on property, saying, "When we look at recessions we look at property at ANZ and there are only two things we worry about, do people have a job & how much are they paying for the money? .. Sir John said ultimately for the market to crash interest rates would have to

rmacculloch

Dec 16, 2022
1 min

NZ Treasury forecasts stagflation after RBNZ Governor boldly told the world it was .. a world away

The NZ Treasury and RBNZ are now both forecasting rising unemployment, a recession next year and inflation way above its 1-3% target throughout 2023. In other words, they're telling Kiwis that stagflation is on the way (a combination of the words "stagnation" & "inflation"). Should one take these forecasts seriously? Of course not. Why? Lets look at another forecast - one made by Governor Orr a year ago, in 2021. It was featured on this Blog. He told the United States on Bloo

rmacculloch

Dec 15, 2022
2 min

Otago Medical School vs China's Top Medical Officer

Remember Prof. Baker, from Otago Medical School? He argued elimination of Covid was "sustainable", would become "more feasible" with vaccines & that such a policy would lead to superior economic outcomes. We (mostly) agree that NZ's lockdowns in the early stages of the virus were a success, but were they ever "sustainable"? Give us a break. Baker wrote in the British Medical Journal, "China’s success in containing the pandemic has shown Covid can be eliminated even after wide

rmacculloch

Dec 13, 2022
2 min

I know David Seymour. He's no "arrogant prick". But PM Ardern's economics advisers are full of them.

The PM called the leader of the ACT Party, David Seymour, an "arrogant prick" today. David is, by the way, the Member of Parliament who, by far, has been the most interested in debating economics issues with me. Why? Because they genuinely interest him, he cares passionately about them and he is extremely knowledgeable about such matters. As for the Prime Minister's economics advisers, even though their qualifications in the subject are either non-existent or abysmally poor,

rmacculloch

Dec 12, 2022
2 min

A top Kiwi economist blames "bureaucratic bloat" for NZ Universities "decline down the OECD ladder"

Although it seldom features in the mainstream media, one of the many strategic mistakes Labour has committed these past few years has been the running down of our universities. Restricting immigration was not of itself the wrong thing to do, providing the skill shortfall had been compensated by a strengthening of our education system. That never happened. Quite the contrary, academics have been laid-off throughout the country. It's one thing to starve the public system of fun

rmacculloch

Dec 9, 2022
5 min

Guest Post by Sir Roger Douglas: Why a Lack of Imagination Threatens Our Future

This post was written by Sir Roger Douglas, New Zealand Minister of Finance, 1984 - 1988. The poverty of thought that lay at the heart of last year’s budget (2021) and other measures announced by the Ardern government during their period in office, highlights why our country continues to descend into an economic & social mire, and why the future of our democratic systems - at least in their current form - might even be under threat. It was a budget not only devoid of courage

rmacculloch

Dec 9, 2022
2 min

PM Ardern's "Creepy" Economic Strategy for Election 2023

Labour's economic strategy for 2023 is being revealed. Yesterday PM Ardern suggested the Government is looking at income support measures, but these might come through the tax credit system - like Working For Families, “We recognise the need to support people. We recognise the need for our low- and middle-income earners and that is what we are doing, but as it stands for future policy that’s obviously down the track,” Ardern said. So what's going on? Well, I invited Sir Roger

rmacculloch

Dec 8, 2022
2 min

On Minister Mahuta and the Advocacy of Supermajorities by (leftist & rightist) economists

We try to be non-partisan on this blog, taking issue with left and right alike. And on that note, Kiwi rightists are currently agitated about attempts by Minister Mahuta to insert an "entrenchment clause" in the Three Waters legislation, meaning that any future attempt to privatise the infrastructure would require a supermajority in the House. National Party leader, Chris Luxon, wants her sacked from Cabinet. He is reported as saying, “Three Waters is a debacle. Not only is t

rmacculloch

Dec 6, 2022
2 min

The Reserve Bank of Australia just went and made the RBNZ look reckless

In a bunch of radio interviews these past weeks, I've argued that the RBNZ should not have over reacted to inflation (having under reacted in 2021) by hiking the Official Cash Rate by 75 basis points in order to "engineer a recession". When asked on Radio NZ what would have been the best policy, my view was to go for a 25 basis point rise, 50 at most. The reason is that inflationary pressures from oil & supply chain problems have been easing, so there is no need to throw the

rmacculloch

Dec 6, 2022
1 min

Scientific Evidence proving MP Jackson shouldn't rubbish links between media bias & public funding

MP Willie Jackson belittled claims that there's a link between public funding and media bias a few days ago. Speaking to Q + A's Jack Tame, Jackson said there would always be a perception that additional public funding for the media would result in reduced editorial independence, "We've got that type of complaint - doesn’t matter what we say .. 'Oh, this is about Willie Jackson paying off Jack Tame. I get that. But you're never going to change some of those perceptions," he s

rmacculloch

Dec 6, 2022
2 min

The Gutless Commerce Commission Strikes Again: Break up Fletchers

All of my life, the dominant position of Fletchers in the construction industry has been discussed. In some ways the firm has been the East India Company of NZ - practically indistinguishable from the government itself. Apparently Sir James Fletcher's wife used to work as a legal secretary for my grandfather - and he said it was the best thing she ever did quitting her job with him to go and work at Fletcher's, where she met Sir James. Anyhow, the Commerce Commission has just

rmacculloch

Dec 5, 2022
2 min

Is ACT libertarian on non-economic issues & socialist on economic ones? Looks (quite a bit) like it.

When it comes to non-economic, moral issues, ACT regularly shows off its "libertarian" credentials. For example, the party lobbied hard & successfully in favor of end-of-life-choice legislation. Its' leader, David Seymour, has said he favors legalization of cannabis & the party speaks out frequently in favor of "freedom of speech". Yes, liberty of choice reigns. Or does it? When it comes to economics, the party of Richard Prebble & Sir Roger Douglas has now abandoned many of

rmacculloch

Dec 5, 2022
1 min

Is being a Kiwi Backbench Member of Parliament "a rubbish job"?

There was a time when former Finance Minister, Bill English, used to have an Academic Advisory Economics Group I used to attend. I remember him saying when he retired from politics & stepped down from the Southland electorate how the Nats were finding it hard to find someone to replace him & represent that seat in Parliament, even though it was one of the safest Nat seats in the country. Add to that how Sir John Key couldn't wait to get the heck out of Parliament as soon as h

rmacculloch

Dec 2, 2022
1 min

National & ACT copy Labour's Tax Policies: more Evidence the Kiwi Right is Intellectually Bankrupt

Hot on the heels of National Party Leader Chris Luxon saying he would not be dropping the top tax rate from 39 to 33 cents should he win the next election, the ACT Party released the most extraordinary Press Statement - it said that ... ".. indexing tax thresholds to inflation is a policy ACT once supported but no longer" Yes, ACT have formally endorsed stealth taxes by way of inflation (!) The Party has decided to copy Labour's tax policies that don't adjust tax thresholds.

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