If National wins ...

[Major von Tempsky]

When Labour wins an election, one day, everyone will have to submit their texting directory to Labour Party HQ, and will have to clear who they are texting to and why in advance so that Big Brother/Nicky Hager can keep tabs on the conversation so that no seditious, i.e. non Labour/Green conversations can take place.

[artemis]

..... This guy is pivotal to the 2014 election campaign, just like Cameron Slater. I expect both of them will be hard for the press to get to, for quite a while.

I don't know about Mr Ede, but nobody is going to die not knowing what Mr Slater thinks. He chooses which media he speaks to, and doesn't seem to be suffering from a lack of publicity. Which will certainly help when he shortly launches Freed, his news media site.

[elZorro]

The 40% target is to reach that goal by 2025 EZ. It is a good goal and time will tell whether it will be reached. Of course it is more difficult to increase exports as share of GDP with the domestic economy booming the way it is under this Government but may well change when the Chch rebuild slows down and the NZ$ may become a bit lower !!

Iceman, I appreciate that it is a long-term goal, and Labour only improved the ratio a small amount during 9 years. However, I know a small amount regarding the "booming domestic economy" and I am informed that many in the construction industry in Christchurch are working on lean margins, or not breaking even. It's very competitive, wages and accommodation costs are higher, it's hard to make a dollar.

If the country is booming, why is govt revenue still behind what is needed to run a trimmed-down public service and state service (OK, not so trimmed down, as the data shows). I don't think that many companies who choose to pay their taxes in the ordinary way in NZ, are doing that well since the GFC.

Export volumes also show greater quarterly variations since 2007, and a slower annual growth trend since about 2004. NZ is just not running on all cylinders at the moment, and it hasn't been for a while.

Bernard Hickey says something similar.

http://www.nzherald.co.nz/economy/ne...ectid=11370067

[nextbigthing]

http://www.stuff.co.nz/business/smal...h-take-praised

"If Little and Labour were serious about supporting SMEs it required policy changes and a shift in the way the party engaged with SMEs, he said.

For example, the past three Labour leaders wanted to scrap National's 90-day "fire-at-will" probation rule if elected, despite SME owners considering that one of the best policies which supports their business, O'Reilly said".


So another words, if Labour want to get into power they're going to have to copy and tweak Nationals policy. That won't make the party faithful happy.

[iceman]

Iceman, I appreciate that it is a long-term goal, and Labour only improved the ratio a small amount during 9 years. However, I know a small amount regarding the "booming domestic economy" and I am informed that many in the construction industry in Christchurch are working on lean margins, or not breaking even. It's very competitive, wages and accommodation costs are higher, it's hard to make a dollar.

If the country is booming, why is govt revenue still behind what is needed to run a trimmed-down public service and state service (OK, not so trimmed down, as the data shows). I don't think that many companies who choose to pay their taxes in the ordinary way in NZ, are doing that well since the GFC.

Export volumes also show greater quarterly variations since 2007, and a slower annual growth trend since about 2004. NZ is just not running on all cylinders at the moment, and it hasn't been for a while.

Bernard Hickey says something similar.

http://www.nzherald.co.nz/economy/ne...ectid=11370067

EZ, I spend about 6-7 months of each year overseas for work. It is very easy to see what profound effect the GFC had on the World economy and many countries that I regularly visit, particularly in Europe. NZ in contrast, has come through the GFC and major natural disasters at the same time, in pretty good shape. Thanks to Clark/Cullen for paying down debt and thanks to Key/English for a pretty good economic management in very tough times, despite the wheels falling off for Cullen and NZ entering recession ahead of the World.
But life in NZ is pretty damn good for a huge majority of people here.
That includes many of my personal friends who have gone to Chch to work on the rebuild and are doing pretty well from it.

The main reason we have still not reached budget surplus (which most countries only dream of today) is that this Government has been far too gutless to make big decisions on wasteful spending introduced by a desperate Helen Clark buying votes, such as WFF, interest free student loans, Kiwisaver subsidies etc etc. Just those 3 loonie policies would save a few billion !

[Sgt Pepper]

EZ, I spend about 6-7 months of each year overseas for work. It is very easy to see what profound effect the GFC had on the World economy and many countries that I regularly visit, particularly in Europe. NZ in contrast, has come through the GFC and major natural disasters at the same time, in pretty good shape. Thanks to Clark/Cullen for paying down debt and thanks to Key/English for a pretty good economic management in very tough times, despite the wheels falling off for Cullen and NZ entering recession ahead of the World.
But life in NZ is pretty damn good for a huge majority of people here.
That includes many of my personal friends who have gone to Chch to work on the rebuild and are doing pretty well from it.

The main reason we have still not reached budget surplus (which most countries only dream of today) is that this Government has been far too gutless to make big decisions on wasteful spending introduced by a desperate Helen Clark buying votes, such as WFF, interest free student loans, Kiwisaver subsidies etc etc. Just those 3 loonie policies would save a few billion !

Iceman
Do you think WFF, Interest Free loans etc are now in effect " protected species" for any government??

[iceman]

Iceman
Do you think WFF, Interest Free loans etc are now in effect " protected species" for any government??

Yes unfortunately. Too many voters love bribes

[artemis]

Iceman Do you think WFF, Interest Free loans etc are now in effect " protected species" for any government??

Agree they are not going to disappear any time soon. But I predict they will continue to be tweaked. For example, student loans now have restrictions on who can get them, and follow up on borrowers now overseas is more effective. Trusts can no longer be used to reduce income for WfF purposes, and are being monitored very closely for elderly care subsidies. Kiwisaver tax credits have halved.

Probably tweaking is the best any government can do now.

[elZorro]

NBT, the 90 day rule shouldn't be an issue, except if it's a way of taking on staff for short busy periods with no risk to the business. It can be abused in some cases. No reason for sacking, that's a bit too easy.

Iceman, now I see your far right agenda, scrap all polices that have been designed to restore a bit of balance and equality after Rogernomics? It's a worldwide trend that big capital is doing better under globalisation practices, and the Helen Clark government restored some sense of reason, and it didn't cripple the economy. In fact, it seemed to turbocharge it.

WFF was a swap for higher GST, interest free student loans just helped students back a small bit with their new costs, and in any case the govt doesn't pay much interest on its loans. Not at the moment, anyway. National has certainly made the most of their overdraft ability.

As for Kiwisaver, that has to be smart policy, and it deserves to be kept going as it was intended.

[elZorro]

Here's a new article from Colin James, BP liked what he wrote last time.

Colin James's Otago Daily Times column for 9 December 2014

When houses are bad for the economy


When a tumbledown bach with a modest view on a modest section is "valued" at $640,000, up 36 per cent from 2011, that suggests an economy seriously out of kilter.

Land and house "values" are wildly out of whack whether judged by history, incomes or other asset prices. Result: misery, frustration and economic loss.

That is Graeme Wheeler's conundrum as he prepares his interest rate pronouncement on Thursday. In October 2013 he put limits on bank lending to people with a deposit below 10 per cent of the house price. He is considering an anti-speculation measure.

Wheeler's job is not to get people a house. It is to stop banks getting too risky and to stop house price rises driving up other prices if house-owners spend up on the strength of the added "value".

Part of Wheeler's problem is that New Zealand is a pingpong ball on a heaving ocean of money printed by four big central banks, which has gone less into productive business investment, because consumer demand is not flash, than into shares, company bonds and real estate.

Property prices have climbed. This is on top of price pressures driven by rapid urbanisation of populations globally. Chinese, Russians and others hunting for a nice place to live or hide have added still more pressure in some places, including Auckland.

A recent McKinsey Institute study of 2400 cities of more than 200,000 people (including Auckland) found that 330 million urban households -- 60 million in rich countries -- live in substandard housing or are financially stretched by housing costs. It projects current trends will expand that to 440 million households by 2025.

"The housing affordability gap is equivalent to $US650 billion a year or 1 per cent of global GDP" and in some cities 10 per cent of local GDP, McKinsey says. Closing the gap will need investment of $US9-11 trillion by 2025, plus $US5 trillion for land.

So Auckland is not alone. In part, its house price pressure is a global urban trend.

But it is a standout, McKinsey says. And generally New Zealand's supply response to higher prices is limited.

Quotable Value reported nationwide house prices 17 per cent above the level of the 2007 bubble peak in November. Auckland was 37 per cent up and "reaccelerating". Even adjusted for inflation, nationwide prices are level with the peak and Auckland's 17 per cent above.

The result: accommodation costs keep rising as a share of income.

Those buying at high prices, Melbourne University research economist Warwick Smith argued last week in The Conversation, have to "spend their whole life in debt peonage to banks just to have a house to live in. They are no freer to challenge the financial system than feudal peasants were to challenge their lords".

That limits their economic and social options.

And price "overheating" flows into rents. Low-income renters, as science-prize-winning Phillipa Howden-Chapman has tirelessly researched, get squeezed: into substandard or crowded accommodation and/or into shortages of necessities, including food.

The tighter that squeeze, the less healthy they are and so the less productive workers they are and the less well children -- the future workforce -- do at school.

The government has been firefighting. Opposition parties have been on the attack.

Among other things, the government has signed "housing accords" with some councils, changed the law to free up land around and inside urban boundaries and got the Productivity Commission to start on a report on land issues, cut tariffs on some building products, started to "right-size" state houses (but then stalled) and is now about to sell off state houses.

Not enough, says Labour's Phil Twyford. And he says outsourcing public housing went badly wrong in Britain.

McKinsey says: unlock land, cut construction costs through "value engineering and industrial approaches", lift operations and maintenance efficiency and reduce financing costs. It says government subsidies and income support are not enough.

Here the government has largely relied on regulatory change. Twyford says active state intervention is needed.

He wants large-scale state building and regulation to provide more and better rental houses. That includes backing the near-stalled Tamaki project of mixed state, community and privately owned units to replace state house slums.

Twyford wants the state to finance bulk building of houses for onselling to first-home buyers. This would enable builders he has talked to to use industrialised prefabricated componentry to cut costs but still allow customisation. He wants tough action to force open materials markets. Plus tax changes to reduce houses' investment advantage.

His rationale: only the state is big enough to make much difference and ameliorate global market forces. A loose parallel is Working for Families, which subsidises wages driven down by global forces.
Labour lost the election so Twyford is just a voice. But if the "value" lunacy persists, others might strike up a chorus.


Colin James, Synapsis Ltd, 04-384 7030, 021-438 434, P O Box 9494, Marion Square, Wellington 6141,
ColinJames@synapsis.co.nz, website www.ColinJames.co.nz

Sort of related, online sales are starting to eat into retailers' turnover here. Big players are the ones who will find ways around that, but smaller retailers are a bit stuck, and some comments below imply it's the NZ importers and distributors who are adding too much margin before the goods get to the stores.

http://www.nzherald.co.nz/transtasma...ectid=11370443

I don't think many shoppers realise just how tough the retail market has become for many small business owners. If they are not at a scale to do their own importing, they'll have trouble moving stock at a good enough margin to cover overheads. The result is "For lease" signs on many shop windows, and reduced employment opportunities for school leavers and others.