The NZ Economy

[entrep]

One decent bit of news.

https://www.interest.co.nz/economy/138079/fewer-new-zealand-citizens-are-leaving-long-term-and-more-are-returning-after

[Shareguy]

Hand a chat with an economist the other day and I bought up the subject of the Taylor Rule

With inflation currently say 3.5% and heading 5% plus next year we agreed that the OCR should be about 3.0% soon and 4.5% or even maybe 5.0% next year

How will we cope?

Lucky new RB guv is just as bad as previous ones and this won't happen ...but economy will remain stuffed for years

Ha. Current RB governor is a national appointee and its election year. I think ANZ are over reacting and wrong, just like they were during Covid. Kiwi bank economist I think in time will be proved right.

[Basil]

Government mean spirited not temporarily cutting RUC and fuel excise like Australia has done for everyone ?

Consider this. Their GST take on a liter of diesel was about 20 cents per liter but is now about 50 cents. Seems disingenious to me for them to claim they need to be fiscally responsible implying they can't afford a temporary reduction. I call B.S.

[Shareguy]

No I don't think so Basil. The last lot gave us all those sugar hits and for what. Short term gain for longer term pain. We need to balance the economy. I'm glad PM has held his ground on this one.

[Basil]

To be crystal clear, I'm not talking about a sugar hit here.  I'm talking about the Govt refunding back their windfall GST gains from the increase in the cost of fuel.  That's fiscally neutral to them and ameliorates some of the extreme pain being felt in the economy.

[HAWKDOG]

I don't think the govt are winning to many votes with this move.
The current govt has given big sugar hits to landlords and big tobacco - how about helping out other industries?
Looking at a huge increase in operating costs for diesel intensive industries.

Maybe JD Vance will visit and give Luxon his vote of confidence........

[Basil]

Agree, lack of action is not a vote winner and its election year.  The last thing we want is a coalition of the lunatic left getting back in because voters are disenfranchised with a lack of response from Govt on extreme fuel pain.  I think this has been badly mishandled.  Giving some sections of the economy like working for families a boost is okay but that still leaves the vast majority of drivers out in the cold Antarctic wind of extreme fuel prices.
Either the straight of Hormuz gets opened soon or National gives some fuel relief.  If neither happens there's a real chance this Govt is going to shoot itself in the foot over this.

[Ferg]

To be crystal clear, I'm not talking about a sugar hit here.  I'm talking about the Govt refunding back their windfall GST gains from the increase in the cost of fuel.  That's fiscally neutral to them and ameliorates some of the extreme pain being felt in the economy.

Given increased spend on petrol has been sourced from decreased spend elsewhere, wouldn't this be a net negligible impact on GST receipts for the Govt?

[Nizzy]

a vote winner for a whole bunch of useful electorates and voters in urban areas would be making public transport free for say 3 or 4 months. Quite a low cost, I hear about $80 m for 3 months.
Encourage people to try out modern buses, trains and ferries, and also reduce demand for fuel and deliver real savings to struggling commuters. For many would be the first time using a bus since school no doubt. Not everyone would be able to take this up, but enough to make a difference. I see some Australian states are doing exactly this as a response to the fuel crisis. 
 

[Basil]

Given increased spend on petrol has been sourced from decreased spend elsewhere, wouldn't this be a net negligible impact on GST receipts for the Govt?

Good question mate, its hard to say ?  Certainly national average rents are down approx $25pwk and most people refixing their mortgages in the last year did so at much lower prevailing interest rates and neither of these cost saving items involves GST so maybe people are simply spending more now on items that include GST ?  Others who are financially comfortable with neither rent or a mortgage to pay and plenty of scope in their finances, i.e. people like me are just spending more and feel slightly miffed the Govt are complicit in diesel being 30 cents per liter higher with the increased GST content than it really needs to be.  I wouldn't change my vote because of it but some people might and the polls, if they are to be believed, are very tight.  I think more pointedly, if fuel remains where it is the likelihood of the economy being tipped into recession is very high and most people have had a complete gutsful of the economy being in recession and some of them will vote for the lunatic left and off we go to the races again with rampant spending on woke nonsense.  I'm pretty sure National are shooting themselves in the foot here.  Fuel is such a visible in your face cost to most people as they grumpily pump it into their vehicle.  Hopefully the straight of Hormuz gets opened again soon and fuel prices will gradually become less problematic.

[HAWKDOG]

I will be voting left, there is no im voting for the coalition of chaos.

Winston is 81 years old he needs to retire. tout suite.  should be an age limit.
Seymour is a nutjob.
Luxon is out of his depth, hopeless.

Complete war on the environment.
They are jamming legislation through.
The last consultation we gave on the NES-CF - they gave us 4 days over Easter to reply.
The RMA reform consultation was over christmas season.

they have done zero to help me.  but continue to take away.