The podcast above of the weekly ‘Hoon’ webinar for paying subscribers on Thursday night features co-host Peter Bale talking with regular guests Robert Patman and Cathrine Dyer about the week’s news in geopolitics and climate. Bernard couldn’t get on because of technical issues.

This week’s Hoon featured special guests Jamie Shea from Chatham House and Auckland Uni’s Treasa Dunworth.

Peter mentioned this New Yorker article about Curtis Yarvin.

The Hoon’s podcast version above was recorded on Thursday night during a live webinar for over 200 paying subscribers and was produced and edited by Simon Josey.

The Hoon won the silver award for best current affairs podcast in this year’s New Zealand Podcast awards.

(This is a sampler for all free subscribers and anyone else who stumbles on it. Thanks to the support of paying subscribers here, we’re able to spread my public interest journalism here about housing affordability, climate change and poverty reduction other public venues. Join the community supporting and contributing to this work with your ideas, feedback and comments, and by subscribing in full. Remember, all students and teachers who sign up for the free version with their .ac.nz and .school.nz email accounts are automatically upgraded to the paid version for free. Also, here’s a couple of special offers: $3/month or $30/year for under 30s & $6.50/month or $65/year for over 65s who rent.)

Ngā mihi nui.

Bernard

The podcast above of the weekly ‘Hoon’ webinar for paying subscribers on Thursday night features co-hosts Bernard Hickey & Peter Bale talking with regular guests Robert Patman and Cathrine Dyer about the week’s news in geopolitics and climate.

This week’s Hoon featured special guest Janet H Anderson from the podcast Asymmetrical Haircuts, which covers international justice.

Peter mentioned these two articles:

* Tom Friedman: Will Israel’s War Ever End?" NYT

* M Gessen: Beware: We Are Entering a New Phase of the Trump Era" NYT

The Hoon’s podcast version above was recorded on Thursday night during a live webinar for over 200 paying subscribers and was produced and edited by Simon Josey.

The Hoon won the silver award for best current affairs podcast in this year’s New Zealand Podcast awards.

(This is a sampler for all free subscribers and anyone else who stumbles on it. Thanks to the support of paying subscribers here, we’re able to spread my public interest journalism here about housing affordability, climate change and poverty reduction other public venues. Join the community supporting and contributing to this work with your ideas, feedback and comments, and by subscribing in full. Remember, all students and teachers who sign up for the free version with their .ac.nz and .school.nz email accounts are automatically upgraded to the paid version for free. Also, here’s a couple of special offers: $3/month or $30/year for under 30s & $6.50/month or $65/year for over 65s who rent.)

Ngā mihi nui.

Bernard

The podcast above of the weekly ‘Hoon’ webinar for paying subscribers on Thursday night features co-hosts Bernard Hickey & Peter Bale talking about the week’s news with regular and special guests, including:

* Cathrine Dyer and Robert Patman on the week in geopolitics and climate;

* Michael Baker on the fifth anniversary of the arrival of Covid and the second anniversary of the launch of the Public Health Communications Centre (PHCC); and,

* Chloe Swarbrick on sanctioning Israel, RMA reform, infrastructure finance and Tamatha Paul’s comments about the police.

The Hoon’s podcast version above was recorded on Thursday night during a live webinar for over 200 paying subscribers and was produced and edited by Simon Josey.

The Hoon won the silver award for best current affairs podcast in this year’s New Zealand Podcast awards.

(This is a sampler for all free subscribers and anyone else who stumbles on it. Thanks to the support of paying subscribers here, we’re able to spread my public interest journalism here about housing affordability, climate change and poverty reduction other public venues. Join the community supporting and contributing to this work with your ideas, feedback and comments, and by subscribing in full. Remember, all students and teachers who sign up for the free version with their .ac.nz and .school.nz email accounts are automatically upgraded to the paid version for free. Also, here’s a couple of special offers: $3/month or $30/year for under 30s & $6.50/month or $65/year for over 65s who rent.)

Ngā mihi nui.

Bernard

TLDR: This week’s news in geopolitics and Aotearoa’s political economy I covered via The Kākā for paying subscribers included:

* An Inland Revenue Department study of Aotearoa’s 311 wealthiest families with combined wealth of $85 billion and annual income in 2020/21 of $14.6 billion has found just seven percent of their income was taxed as personal taxable income that year because of the lack of a capital gains tax; Special report on Wednesday and Wednesday’s Dawn Chorus

* That meant their effective tax rate was 9.5% across all their income, even after calculating their payments of GST, which compares with an effective tax rate of 30% for a PAYE salary earner of $80,000 per year. Those 311 families alone would have paid $3.4 billion more in tax in 2020/21 if they had paid the same tax rate as middle-income New Zealanders; Special report on Wednesday and Wednesday’s Dawn Chorus

* PM Chris Hipkins hosed down talk of a Capital Gains, Wealth or Flood Levy tax in Budget 2023 on May 18, saying in a speech to business leaders he wanted to produce a ‘no-frills’ Budget that paid for flood repairs by cutting spending elsewhere and using unallocated spending announced in previous years. Thursday’s Dawn Chorus,

* Hipkins emphasised in his speech the Government’s focus was on getting inflation and interest rates down, while ramping up net migration to 100,000, which effectively put a floor under the housing market this week, along with lower long-term mortgage rates and a loosening of LVR rules announced by the Reserve Bank. Friday’s Dawn Chorus

* PM Chris Hipkins acknowledged the Government is flying blind on net migration to Australia after the weekend announcement of a four-year pathway to dual citizenship for the 300,000 New Zealanders living there since 2001 and the ones eyeing up going for bigger salaries and after-housing-cost disposable incomes; Monday’s Dawn Chorus

* Hipkins told reporters the figures couldn’t and haven’t been modelled, although he was still confident the much-more-assured pathway to citizenship would not increase the numbers of New Zealanders migrating to Australia, even though net migration of NZ residents trebled to over 1,000 a month in the year to the end of September.

What we talked about on the ‘hoon’

In this week’s podcast above of the weekly ‘hoon’ webinar for paying subscribers at 5pm on Friday night, I talked with co-host Peter Bale in Oslo and special guests:

* Robert Patman from University of Otago, who came on from 5.10 pm to 5.25 pm to talk about the latest on Sudan, China vs US and AUKUS;

* Max Rashbrooke, who came on from 5.25 pm to 5.35 pm to talk about the IRD tax reports and the political reaction;

* Nick Goodall from Core Logic, who came on on from 5.35 pm to 5.45 pm to talk about the housing market and this week’s LVR news; and,

* Josie Pagani came on from 5.40 pm to 5.50 pm to talk about politics and tax, along with her column in The Post.

Peter and I also talked about the news in geopolitics this week, including Hugh Grant saying in court that Rupert Murdoch’s The Sun broke into his flat (The Guardian) The Hoon podcast version is produced by Simon Josey.

Thanks to the support of paying subscribers here, I’m able to spread the work from my public interest journalism here about housing affordability, climate change and poverty reduction around in other public venues.

Other places I’ve appeared this week

My podcast for The Spinoff this week

An interview with David Parker - I interviewed Revenue Minister David Parker on Wednesday afternoon in Wellington for When The Facts Change, my weekly podcast for The Spinoff.

I was on TVNZ’s Breakfast show on Friday on Hipkins’ Budget speech

Chat thread of the week

I also host regular discussions on the chat section of The Kākā for paying subscribers

Ka kite ano

Bernard

TLDR: This week’s news in geopolitics and Aotearoa’s political economy covered on The Kākā for paying subscribers included:

* Council staff in Wellington going rogue on their council, quietly reinserted 797 villas into the Council’s district plan, despite express instructions from Council after a heated debate and vote last year that character zones stopping building be cut by 72%; Monday’s email

* A law change designed to tighten the number of free carbon credits allocated to major polluters could instead allow them to emit more carbon for free; Tuesday’s email

* The IRD confirmed the release next Wednesday of much better wealth data and a speech on wealth and income from Revenue Minister David Parker; Wednesday’s email

* Auckland Transport, at the behest of Mayor Wayne Brown, abandoned a long-running drive for special powers to remove kerbside parking for things like cycleways and has dropped a proposal to charge at park-and-ride stations; Thursday’s email

* The Government, which still says it is treating emissions reduction as a climate emergency and a nuclear-free moment, defended its decision to allow NZ Steel to extend the consent on its Glenbrook steel mill until 2046 without the Auckland Council having to consider climate change in the consent process. Friday’s email.

My podcast for The Spinoff this week

Going wider for new workers - Employers are struggling to replace staff of all skill levels and the Reserve Bank says it has no choice but to hike interest rates because it says the economy is at full employment. But in this week’s When The Facts Change, I challenged that assumption in an interview with Autism NZ CEO Dane Dougan about the thousands of workers unnecessarily unemployed because of their autism, and how to change that.

What we talked about on the ‘hoon’

In this week’s podcast above of the weekly ‘hoon’ webinar for paying subscribers at 5pm on Friday night, I talked with co-host Peter Bale in Perugia (!) and special guests:

* Merja Myllylahti from AUT on this week’s dramas in media globally, including Fox News’ defamation settlement payout and non-apology for lying about US election fraud and her Trust in News survey (more here) from 5.20pm to 5.40 pm; and,

* Christina Hood from Compass Climate to talk about the Climate Commission’s advice to the Government to actually reduce emissions from 5.40 to 5.50 pm. 

Peter and I also talked about the news in geopolitics this week, including the beginning of spring offensives in Ukraine and the new civil war in Sudan. The Hoon podcast version is produced by Simon Josey.

Thanks to the support of paying subscribers here, I’m able to spread the work from my public interest journalism here about housing affordability, climate change and poverty reduction around in other public venues.

Ka kite ano

Bernard

TLDR: This week’s news in geopolitics and Aotearoa’s political economy covered on The Kākā for paying subscribers included:

* Treasury estimating the Government could have to spend from $3 billion to $24 billion buying carbon credits overseas to meet our Paris climate obligations, depending on the scale of our failure to reduce emissions enough and carbon prices; Tuesday’s email

* The Government loosening migration settings dramatically in a last-minute attempt to stop a systemic health system crisis turning into a catastrophe over the winter; Wednesday’s email

* The Government turning Three Waters into 10 Waters, extending co-governance and balance sheet separation in a way that gives Councils a bit more say, but takes $1.5 billion in ‘better off’ compensation off them; Thursday’s morning email and a Three Waters special in the afternoon; plus,

* The Government allowing Auckland City to delay the implementation of housing densification rules by a year because of bad weather. Friday’s email

Here’s our Notes launch special offer that ends later today.

What we talked about on the ‘hoon’

In this week’s podcast above of the weekly ‘hoon’ webinar for paying subscribers at 5pm on Friday night, I talked with co-host Peter Bale and special guests:

* Robert Patmanfrom the University of Otago from 5.10 pm to 5.30 pm or so on China practicing a Taiwan blockade, Emmanuel Macron’s China controversial comments, NZ getting closer to NATO and the Pentagon leaks;

* Rebecca Peer, a climate engineering researcher from the University of Canterbury, from 5.30 pm to 5.40 pm on the Climate Commission’s advice to the Government to actually reduce emissions and Treasury’s estimate of a $3-24b climate liability;

* BusinessDesk-$$$ columnist Dileepa Fonseka on his (paywalled) piece detailing the loss of gaming developers to Australia and a massive missed opportunity during the lockdowns to embed global gaming maestro Gabe Newell in New Zealand as a resident. 

Peter and I also talked about the Three Waters reforms and Rupert Murdoch.

Other places I appeared this week

Thanks to the support of paying subscribers here, I’m able to spread the work from my public interest journalism here about housing affordability, climate change and poverty reduction around in other public venues.

I appeared a a commentator for 1News as a commentator on Three Waters. I also produced my weekly When the Facts Change podcast for The Spinoff on:

The task of a generation - Aotearoa needs to double the size of its electricity industry over the next 30 years to meet our emissions reductions targets. We've done it before in 1945 to 1985 but can we do it again? With a myriad of privately and publicly owned companies waiting for market and regulatory signals, it seems unlikely. In the latest episode of my weekly When the Facts Change podcast for all via The Spinoff, I talked with electricity expert John Hancock about the prospects of doubling our power industry again.

Long story short? I think it’s going to be much harder now the ownership of these assets is so much more dispersed than from 1945 to 1985. We now have listed gentailers plus private gentailers plus private lines companies plus public-but-not-Crown-owned lines companies vs all-Crown control from 1945 to 1985. John thinks it can be done because there’s plenty of private capital wanting in on the growth.

Scoops elsewhere this week

What’s the point again? - The hydro-battery at Lake Onslow won't be commissioned until late 2037 and could take another one to three years to fill to maximum capacity, Marc Daalder reported for Newsroom from this MBIE business case document.

Wondering why food inflation is so high? - Forty six small to medium food suppliers to both Foodstuffs and Countdown told Newshub’s Janika Ter Allen last night the supermarkets are making gross profit margins of up to 55% on their products.

Chart of the week

‘It’s actually too expensive NOT too reduce emissions’

Treasury/MoE report

Quotes of the week

‘Job done…’

"I think we've nailed it. Honestly, there's a balance to strike here." Kieran McAnulty after announcing reforms to the Three Waters reforms that increased the costs, reduced the benefits, left in place co-governance and did not change balance sheet separation.

‘Yeah…nah’

“So we get $30m for $7 billion worth of assets? What an absolute crock, the whole thing.” Christchurch City Councillor Sam MacDonald.

‘What about the money you promised us’

“It's a significant change. We’d like to understand why that ‘Better Off’ funding has now been removed. The only sweetener and carrot that was there is now no longer on the table.” Waimakariri Mayor Dan Gordon on the removal of $1.5 billion of ‘Better Off’ funding, which was not mentioned in the news conference.

‘Don’t make me angry, you wouldn’t like me when I’m angry…’

“I threaten to go feral later in the year if we don’t get some marching (to Auckland) from both of the two parties, because neither of them is particularly strong on what they are going to do for the benefit of Auckland.” Auckland Mayor Wayne Brown on why he expects political parties to offer good policies for Auckland in a speech this week. NZ Herald

My weekend reading, watching & listening suggestions for paying subscribers

TLDR: This week’s news in geopolitics and Aotearoa’s political economy covered on The Kākā for paying subscribers included:

* revelations that the Reserve Bank (Te Pūtea Matua) is paying billions per year in interest to the big four Australian-owned banks, as well as providing $19 billion of subsidised loans to them at a time when the Government more broadly is refusing requests for extra spending on health, education, transport and welfare (Monday’s email);

* Reserve Bank analysis released this week showed 25% of Auckland homes with mortgages could be affected by rising sea levels and/or a 1-in-100 year type of storm, with some vulnerable to a complete wipeout of their values (Tuesday’s email);

* the Government backtracked on various climate pledges as it battens down its ‘costs of living’ hatches before the election, including inviting oil and gas explorers to submit more bids for drilling onshore and quietly not introducing emissions standards to improve engine efficiency and vehicle safety for six years (Thursday’s email); and,

* the Government announced five options for an earlier second crossing/s (either or both a tunnel or bridge) of the Waitematā harbour that prioritise cars, could cost $25 billion and would significantly increase climate emissions during their building and/or drilling (Friday’s email).

What we talked about on the ‘hoon’

In this week’s podcast above of the weekly ‘hoon’ webinar for paying subscribers at 5pm on Friday night, I talked with co-host Peter Bale and special guests:

* Robert Patmanfrom the University of Otago about New Zealand joining Aukus-lite and the dramas in Israel from 5.15 to 5.30pm;

* University of Victoria Public Policy academic Andrew Ecclestone about the need to regulate lobbyists and revolving doors for bureaucrats, politicians and political operatives, along with the need for OIA reform in the wake of Stuart Nash’s departure from Cabinet from 5.30 to 5.45pm; and,

* Simplicity CEO Sam Stubbs talking about Simplicity Living’s big house building plans, starting in Auckland, and banks receiving billions of subsidies from the Government from 5.45 to 5.55pm.

Peter and I also talked about the demise of TodayFM and Donald Trump’s indictment early in the show, and Peter introduced his cousin’s dog Banjo to the audience at the end. Cute dog.

Other places I appeared this week

Thanks to the support of paying subscribers here, I’m able to spread the work from my public interest journalism here about housing affordability, climate change and poverty reduction around in other public venues.

I produced my weekly When the Facts Change podcast for The Spinoff on: The climate landmine in your letter box.

Cyclone Gabrielle suddenly showed us the life savings invested in the land under a home can dissolve as soon as an insurer decides to reprice or pull their insurance. I talked to insurance and banking academic Dr Michael Naylor from Massey University about how insurers are rapidly repricing for flood risk in a warming climate, and how that’s creating a Wild West for home buyers hoping to know if their life savings will dissolve too.

This week’s scoops elsewhere

Guyon Espiner’s ‘Mate, comrade, brother’ series of articles and videos for RNZ last week and early this week on the activities of lobbyists with the Labour Government and the need for regulation was essential reading.

Kirsty Johnson reported for Stuff yesterday on how the Government had changed the law about compensation for wrongful convictions for those who had served home detention sentences, after her earlier reporting on the issue.

Luke Malpass reported for Stuff on Tuesday from an email that showed Stuart Nash leaked details of a Cabinet decision to a donor, Troy Bowker, prompting PM Chris Hipkins to immediately sack Nash and launch an inquiry.

Pete McKenzie reported for Newsroom on Thursday about how his 2021 requests for all emails between Nash and his donors led to the exclusion of the smoking gun email, potentially in breach of the law and with the knowledge of the office of PM Jacinda Ardern, but not necessarily the PM herself.

Jenee Tibshraeny reported for NZ Herald-$$$ from documents obtained under the OIA about how the Reserve Bank is paying billions in interest to banks and how Grant Robertson had asked to see whether the Reserve Bank could cut back on that.

Marc Daalder reported for Newsroom on Wednesday about how the Government quietly sat on proposals to improve engine efficiency and car efficiency standards for six years at a potential cost of billions to the country and thousands of tonnes of extra climate emissions.

Charts of the week

Quotes of the week

‘Hey mate…’

“Stuart Nash and discretion are not words that get used together much in the same sentence,” Troy Bowker said of Stuart Nash, via BusinessDesk-$$$ this morning, albeit after saying he still liked Nash as a friend.

‘I have some breaking news…’

“They have f*cked us. And we’re all going to lose our jobs.” Tova O’Brien revealing on-air on Thursday morning that MediaWorks was shutting TodayFM.

Profundities, spookies, curiousities and feel-goods

Cartoons of the week

The Craic

Fun things

Ka kite ano

Bernard

Thank you for reading The Kākā by Bernard Hickey. This post is public so feel free to share it.

TLDR: This week’s news in geopolitics and Aotearoa’s political economy covered on The Kākā included:

* The runs on Silicon Valley Bank and First Republic Bank on the west coast of the United States that forced the US Treasury, FDIC and Federal Reserve to intervene to promise full payouts to depositors, over and above the US$250,000 deposit guarantees legislated for, and lend tens of billions to banks to keep them liquid (Wednesday’s email and podcast);

* The orchestrated rescue and takeover of Credit Suisse last weekend by Swiss authorities working together in a frantic effort with UBS to stop the Swiss banking system from collapsing (Wednesday’s email and podcast);

* Rate hikes in the United States, Britain, Switzerland and Norway, but a softening of market interest rate expectations because of the banking crises (Wednesday’s email and podcast);

* Statistics showing little improvement in Aotearoa’s child poverty rates and a worsening of the stress on renters, even more so than the stress on mortgage payers (Friday’s email and podcast);

* A call from the Consumer Advocacy Council Chair Deborah Hart for an inquiry into bundling by gentailers of deals on broadband and gas, which she said may restrict competition by making it harder for customers to compare and switch providers (Thursday’s email and podcast).

* Reserve Bank (Te Matua Putea) Chief Economist Paul Conway’s fresh warning to firms and workers not to push for higher real wages and profits in anticipation of higher inflation (Friday’s email and podcast);

* Auckland Mayor Wayne Brown’s casting vote for Auckland Council to pull out of LGNZ (Friday’s email and podcast); and,

* TOP’s launch of a Teal Card and plan to stay out of ministerial roles and not agree to both supply and confidence for either of the main parties (Tuesday’s email and podcast). I also wrote about the Greens’ electoral strategy and performance in Monday’s email and podcast and talk about it with Green MP Julie-Anne Genter in this week’s bonus When The Facts Change podcast episode via The Spinoff.

What we talked about on the ‘hoon’ this week

In this week’s podcast of the weekly ‘hoon’ webinar for paying subscribers at 5pm on Friday night (which you can find up the top of this post) I talked with co-host Peter Bale and political science professorsRobert Patman from the University of Otago and Bronwyn Hayward from the University of Canterbury about:

* Presidents Xi Jinping and Vladimir Putin meeting in Moscow, along with the latest news and views of AUKUS’ military aspirations and Aotearoa’s adjacency to those;

* Russia’s ongoing invasion of Ukraine and how close Xi actually is (or not) to Putin;

* this week’s UN IPCC report warning climate emissions would need to be cut by almost half by 2030, if warming was to be limited to 1.5°C; and,

* this week’s review of the Emissions Trading Scheme announced by the Ministry for the Environment.

We also talked with Natalia Antelava, the Tblisi-based editor-in-chief and co-founder of Codastory about living in Georgia, a nation trying to exist under the shadow of Russia. She also produces the Undercurrents podcast for Audible here, which is about the struggle between tech, democracy, and dictatorship.

Other places I appeared this week

Thanks to the support of paying subscribers here, I’m able to spread the work from my public interest journalism here about housing affordability, climate change and poverty reduction around in other public venues.

I produced my weekly When the Facts Change podcast for The Spinoff on how the Government’s policy bonfire blew up the ETS, and there’s that bonus episode above with Julie-Anne Genter.

The Kākā by Bernard Hickey is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Scoops elsewhere this week

Chart of the week

Almost a quarter of NZ renters spend over 40% of income on rent

Quote of the week

‘I’m leaving the team because I’m more important than the rest of you’

“I’ve always felt that if you’re on your own, they (government) have to come and see us. They need us more than we need them.” Mayor Wayne Brown’s justification for voting this week to pull Auckland Council out of LGNZ.

Profundities, spookies, curiousities and feel-goods

Longer reads and listens for the weekend

Here’s a few useful longer reads, scoops and podcasts for paying subscribers for the weekend.

TLDR: This week’s news in geopolitics and the political economy covered on The Kākā included:

* PM Chris Hipkins’ announcement of the rest of a policy bonfire to save a combined $1.7 billion, but which blew up the Emissions Trading Scheme (Thursday’s email), upset the Greens and was overshadowed somewhat by Stuart Nash’s resignation as Police Minister, but not as Economic Development, Forestry and Oceans Minister (Tuesday’s email);

* the failure of Silicon Valley Bank and the collapse in the share price of Credit Suisse has renewed nerves about the Global Financial System, and shows the fast rate hikes of the last year may not be sustainable if they endanger bank stability Monday’s email;

* a new report showed the new RMA could generate new carbon liabilities of up to $16 billion because of consenting delays (Friday’s email); and,

* Auckland Mayor Wayne Brown’s budget cuts came under fire, justifiably, from those arguing the so-called ‘fiscal hole’ and debt crisis is not a hole or a crisis (Wednesday’s email).

What we talked about on the ‘hoon’

In this week’s podcast above of the weekly ‘hoon’ webinar for paying subscribers at 5pm on Friday night, I talked with co-host Peter Bale and special guests TOP Party Leader Raf Manji, National Finance Spokesperson and Deputy Leader Nicola Willis and Green MP Chloe Swarbrick about:

* PM Chris Hipkins’ bonfire of the policies on Monday, which blew up the ETS;

* the bank crises that broke out in the United States and Europe this week;

* Labour’s rejection of a select committee inquiry into bank competition; and,

* the Better Budget Auckland challenge to Auckland Mayor Wayne Brown’s austerity approach.

Peter and I also talked about Chinese President Xi Jinping’s ‘great wall of steel’ speech, former Australian PM Paul Keating’s tour-de-force rejection of AUKUS’ submarine deal and the latest drama in the Black Sea when Russian jets ‘collided’ with an American drone.

Other places I appeared this week

Thanks to the support of paying subscribers here, I’m able to spread the work from my public interest journalism here about housing affordability, climate change and poverty reduction around in other public venues.

I produced my weekly When the Facts Change podcast for The Spinoff on Why Auckland Council should just use its balance sheet and borrow to deal with lower revenues because of the covid and flood crises. I spoke to BetterBudgetAuckland’s India Logan-Riley about how Mayor Wayne Brown’s spending cuts were hurting Auckland’s most vulnerable, and what the alternatives should be.

Charts of the week

What the Fed’s latest rescue of rich savers looks like

There’s more detail on that US Federal Reserve action here in this Bloomberg article.

All told, the emergency loans reversed around half of the balance-sheet shrinkage that the Fed has achieved since it began so-called quantitative tightening — allowing its portfolio of assets to run down — in June last year. And the central bank’s reserve balances jumped by some $440 billion in a week — which “basically reversed all the Fed’s QT efforts,” according to Capital Economics.

Analysts at JPMorgan Chase & Co. estimated $2 trillion as an upper level for how much liquidity the new backstop could ultimately provide, although they also developed a smaller calculation of around $460 billion based on the amount of uninsured deposits at six US banks that have the highest ratio of uninsured deposits over total deposits. Bloomberg article

Quotes of the week

A loose goose calls a rail project a duck

“Light rail is a dead duck mate, let’s be real.” Auckland Mayor Wayne Brown telling NewstalkZB he didn’t want the Auckland Council to have to pay half of the new $5.493b cost for the City Rail Link, after its cost estimate rose by $1.074b to $5.493b this week.

Wayne Brown plans to ‘leverage’ the Crown to pay > 50% of CRL

“I’m a trader and I’m in there to trade. I’ve got $1b to pay for the weather. I’ve got a budget blowout bequest to me by the new High Commissioner to England.”

Brown also said he wanted to hand a “whole bunch of things back to the Government”, including the Citizen’s Advice Bureau, which he might try to leverage his way out of.

“I don’t see why ratepayers should be fixing people’s marriages, that’s something that should go back to the Government.” Wayne Brown via NewstalkZB

Cartoons of the week

Profundities, spookies, curiousities and feel-goods

Longer reads and listens for the weekend

Here’s a few useful longer reads, scoops and podcasts for paying subscribers for the weekend.

TLDR: This week’s news in geo-politics and the political economy covered on The Kākā included:

* National proposed a select committee inquiry into bank profits, which prompted the Government to say it was considering a full market study of the banking sector by the Commerce Commission (Thursday’s email);

* National proposed allowing easier foreign investment in build-to-rent projects and allowing owners to claim depreciation, as student accommodation, retirement villages and others can now;

* Transport Minister Michael Wood was forced to downplay the role of emissions reduction in his transport strategy after the Opposition criticised the prospect of fuel tax money being used for buses, cycleways and walkways instead of road repairs (Tuesday’s email);

* A survey commissioned by the Ministry of Transport found most young people in cities would prefer revenues from new wealth, congestion or pollution taxes be used to improve public transport, walking and cycling, while most older voters don’t want any of those taxes, and instead want their existing fuel taxes used to repair roads, rather than subsidise emissions reduction. (Wednesday’s email)

What we talked about on the ‘hoon’

In this week’s podcast above of the weekly ‘hoon’ webinar for paying subscribers at 5pm on Friday night, I talked with co-host Peter Bale and special guests Robert Patman and Crockers CEO Helen O’Sullivan about:

* Michael Wood’s about-face on a new transport policy prioritising emissions reductions;

* the Labour Government finally deciding to look at doing a market study of bank profits after the Reserve Bank suggested it would like one and the Opposition called for a short and sharp Parliamentary Select Committee inquiry into bank competition;

* National proposed allowing easier foreign investment in build-to-rent projects and allowing owners to claim depreciation, as student accommodation, retirement villages and others can;

* China’s warnings of war if the United States keeps trying to contain China;

* Australia agreeing to buy five US nuclear submarines, which China doesn’t like;

* China accusing New Zealand of jumping at shadows over accusations an analyst in Wellington passed on information to China’s security services, which the analyst has denied; and,

* More intrigue around the Nordstream explosions.

Other places I appeared this week

Thanks to the support of paying subscribers here, I’m able to spread the work from my public interest journalism here about housing affordability, climate change and poverty reduction around in other public venues.

I produced my weekly When the Facts Change podcast for The Spinoff on turning grass into ngahere.

Our emissions trading scheme incentivises sheep and beef farmers on marginal land to sell or lease it to pine foresters for carbon credits. It’s a classically bad unintended consequence of a policy that is supposed to improve the environment.

Instead, the slash and silt unleashed from those plantations wrecked rich horticultural land down in the valleys in Gabrielle. I talked to farmers John Burke and Alison Dewes about other ways to change land use that is much healthier and more profitable in the long run, including retiring that land into ngahere and wetlands that will thrive in a changing climate and protect other farms down stream how rising corporate profit margins are fuelling a profit-price spiral here and overseas.

Longer reads and listens for the weekend

Here’s a few useful longer reads, scoops and podcasts for paying subscribers for the weekend.

TLDR: This week’s news in geo-politics and the political economy covered on The Kākā included:

* National released its plan to repeal Three Waters and push the responsibility, the bill and the blame for building infrastructure back down to councils, with Christopher Luxon pledging the plan would not increase rates, although he acknowledged councils may lift water charges; Monday’s email and podcast

* Christchurch City Council finally agreed a district plan that included some elements of the Government’s bi-partisan ‘Townhouse nation’ housing densification rules, but councillors took out more than a third of the expected new housing supply with a special ‘sunlight access’ clause and limiting densification in areas with poor bus services. Meanwhile, Auckland Council agreed to ask the Government for a delay of the rules (see more below); Thursday’s email and podcast

* Rob Campbell was sacked as chair of Te Whatu Ora and the Environmental Protection Agency after he criticised National’s Three Waters policy in a LinkedIn comment that ministers said breached impartiality guidelines for civil servants, although Campbell said his sacking was more to do with the Government’s discomfort with his very public support for co-governance; Friday’s email and podcast

* Chief Justice Helen Winkelmann and Parliamentary Commissioner for the Environment, Simon Upton, wrote scathing submissions about the two new bills designed to replace the Resource Management Act (RMA), describing them as overly complex, vague and vulnerable to a flood of litigation after being passed through Parliament in their current form; and, Friday’s email and podcast

* The Reserve Bank’s Chief Economist Paul Conway said he supported the idea of a market study of banks by the Commerce Commission to find out more about whether rising profit margins are a source of inflation. Monday’s interview and podcast with Paul Conway.

What we talked about on the ‘hoon’

In this week’s podcast above of the weekly ‘hoon’ webinar for paying subscribers at 5pm on Friday night, I talked with co-host Peter Bale and special guest Robert Patman about:

* Friday’s climate strike marches and actions by students;

* the debates about whether the United States is responsible for the Nordstream explosions;

* whether covid escaped from a lab in Wuhan;

* the latest on the United States’ warning it would sanction China if it supplied weapons to Russia for its war in Ukraine;

* the latest signs Britain is about to join the CPTPP after finally doing a deal to resolve its disputes over the Northern Ireland trade border with the EU; and,

* the revelations in court documents about Rupert Murdoch's decision not to stop Fox News commentators from repeating lies about the use of Dominion voting machines to 'steal' the 2020 Presidential elections.

Other places I appeared this week

Thanks to the support of paying subscribers here, I’m able to spread the work from my public interest journalism here about housing affordability, climate change and poverty reduction around in other public venues.

I produced my weekly When the Facts Change podcast for The Spinoff on how rising corporate profit margins are fuelling a profit-price spiral here and overseas.

I talked with Jesse Mulligan on RNZ’s Afternoons programme on Wednesday about banks launching a new mortgage war through 4.99% deals with brokers.

I also talked with Jane Patterson for RNZ’s Focus on Politics about National’s Three Waters proposals. It’s not online yet, but I’ll update this later in the day when it arrives on RNZ’s website.

Longer reads and listens for the weekend

Here’s a few useful longer reads, scoops and podcasts for paying subscribers for the weekend.

Fun things

Ka kite ano

Bernard

TLDR: This week, the clean up after cyclone Gabrielle forced the Government into a last-minute rewrite of its pre-election Budget 2023 set for May 18, but the Reserve Bank warned it against spending with extra tax or less spending to ensure the rebuild doesn’t generate more inflation in an economy straining at full capacity.

Finance Minister Grant Robertson wouldn’t rule out a cyclone tax of some sort to pay for potentially billions of dollars of repairing and rebuilding in Te Tairāwhiti, Hawkes Bay and Northland. The Opposition pushed back hard against a ‘flood tax’ and said the Government should instead borrow and spend more carefully.

Elsewhere, the United States warned China against supplying arms to Russia for its war in Ukraine, threatening financial and other sanctions against our largest trading partner. Also, President Vladimir Putin suspended Russia’s involvement in the last nuclear weapons testing and proliferation treaty with the United States.

In the global and local economy, stronger-than-expected factory, jobs and consumer spending data in the United States and Europe forced traders and investors to increase their expectations for peak interest rates being set by the US Federal Reserve and the European Central Bank.

Our Reserve Bank (Te Pūtea Matua) stuck to its inflation-fighting guns by putting up the Official Cash Rate by 50 basis points, as expected, to 4.75%, and by keeping its forecast for a peak of 5.5% within a few months. It saw Gabrielle putting up prices by around 0.6% this year, and lifting GDP by around 1% over a few years.

Fixed mortgage rates were mostly unmoved this week because they’re already priced in expected rises in rates, but more than half of mortgages are expected to roll off fixed rates of 2-3% to refix at 5-6% over the rest of 2023, which the Reserve Bank said would increase average mortgage costs for those with mortgages from 9% of disposable income to 22% of disposable. About 30% of renters pay more than 40% of their disposable income in rent.

In this week’s podcast above of the weekly ‘hoon’ webinar for paying subscribers at 5pm on Friday night, I talked with co-host Peter Bale about the economic and Gabrielle action, while he talked with Robert Patman about the first anniversary of Russia’s invasion of Ukraine.

Other places I appeared this week

Thanks to the support of paying subscribers here, I’m able to spread the work from my public interest journalism here about housing affordability, climate change and poverty reduction around in other public venues.

I spoke with David Hall, the climate policy director at Toha about the political economy problems of climate change policy for When the Facts Change, my weekly podcast via The Spinoff.

I also appeared this weekend on The Nation on TV3 to talk about the fiscal and monetary policy implications of Gabrielle and the Reserve Bank’s latest moves.

Longer reads and listens for the weekend

Here’s a few useful longer reads, scoops and podcasts for paying subscribers for the weekend.

TLDR: This week, Cyclone Gabrielle wrecked the Hawkes Bay, Gisborne and parts of Coromandel and Northland, killing at least 10 people, cutting off power to 225,000 homes and making 10,000 homeless in what appears to be Aotearoa’s biggest natural disaster since the Christchurch Earthquakes of 2011 and our worst climate catastrophe ever.

Repairing the damage and building back more climate-resilient infrastructure will cost taxpayers, ratepayers, insurers and residents billions of dollars over many years to come. Gabrielle’s destruction exposed Aotearoa’s need to invest heavily adapt to climate change, as well as reduce emissions. It has triggered a debate about how, where and whether to rebuild the infrastructure to cope with these events, which are becoming more frequent and intense because of climate change.

In Friday night’s ‘hoon’ webinar for paying subscribers in recorded podcast above, I and co-host Peter Bale spoke with Kiwibank Chief Economist Jarrod Kerr about his call for the Reserve Bank (Te Pūtea Matua) to consider not hiking the Official Cash Rate this coming Wednesday by 50 basis points, as had been widely expected before Gabrielle.

We also spoke with Dr Michael Baker from the new Public Health Communication Centre about the centre’s latest paper on the need for long-term thinking – Especially for preventing catastrophic risks. We talked about how democracies often struggle to overcome their biases towards short-term thinking, and failures to prepare for long-term risks, unless in times of crisis.

I also produced a podcast for The Spinoff this week where I spoke to ClimateSigma’s Belinda Storey about the finances of climate retreat.

Charts of the week

Longer weekend reading and listening

Here’s a few links longer reads and listens for paying subscribers for the weekend.

The podcast above of the weekly ‘Hoon’ webinar for paying subscribers on Thursday night features co-hosts Bernard Hickey & Peter Bale talking with special guest author Michael Wolff, who has just published his fourth book about Donald Trump: ‘All or Nothing’.

Here’s Peter’s writeup of the interview.

The Hoon’s podcast version above was recorded on Thursday night during a live webinar for over 200 paying subscribers and was produced and edited by Simon Josey.

The Hoon won the silver award for best current affairs podcast in this year’s New Zealand Podcast awards.

(This is a sampler for all free subscribers and anyone else who stumbles on it. Thanks to the support of paying subscribers here, we’re able to spread my public interest journalism here about housing affordability, climate change and poverty reduction other public venues. Join the community supporting and contributing to this work with your ideas, feedback and comments, and by subscribing in full. Remember, all students and teachers who sign up for the free version with their .ac.nz and .school.nz email accounts are automatically upgraded to the paid version for free. Also, here’s a couple of special offers: $3/month or $30/year for under 30s & $6.50/month or $65/year for over 65s who rent.)

Ngā mihi nui.

Bernard

TLDR: This week in the podcast of our weekly hoon webinar for paying subscribers, Peter Bale and myself talked with Auckland Central MP Chloe Swarbrick and Auckland City Councillor for the Albert-Eden-Puketāpapa ward, Julie Fairey, about Auckland’s floods, climate change and what might (and should) happen next.

This week’s five big things

The climate changed - Auckland’s heaviest ever downpour after Aotearoa’s hottest ever year unleashed floods that killed four people, made hundreds (more) homeless and will be our most expensive natural disaster ever, outside of the Christchurch earthquakes. Insurers face claims of over $500 million and are already putting up premiums and pulling insurance from some of the one in seven properties on flood plains, under (and over) cliffs and within expected reach of rising seas.

The politicians didn’t - The Labour Government announced an extra $719 million in spending to extend fuel tax cuts for another three months to the end of June, increasing the bill for encouraging more emissions from petrol and diesel vehicles to $2.1 billion and making it even more unlikely they will be unwound before the election on October 14.

Mortgage rates fell - ANZ cut its longer-term mortgage rates to match cuts by others as global markets are now dragging down longer-term wholesale rates in anticipation of cuts in official rates. That’s because inflation is rapidly coming off the boil in the big Northern Hemisphere economies, which just experienced mild winters that kept gas prices down and where wage growth is now slowing, avoiding wage-price spirals.

Goldilocks economies - The world’s largest economy reported much-stronger-than-expected jobs growth last night, but also wage growth fell, creating the tantalising potential for the United States to have a soft landing where the US Federal Reserve doesn’t have to raise interest rates too much. A recession that was seen as inevitable as recently as in January, could be avoided. The Eurozone also avoided a recession over its winter, partly due to a warmer winter and continued jobs growth. The one time climate change was a good thing.

From the dog house to the honeymoon suite - Two opinion poll results published this week showed support for Labour bounced strongly in new PM Chris Hipkins’ first week in charge. Labour’s support rose just above National’s in both the 1News/Kantar and Newshub/Reid Research polls. Interestingly, Hipkins net approval and net trust ratings were significantly above that of National leader Christopher Luxon. It’s game on again for the election on October 14, with the prospects growing that Te Pāti Māori, TOP and/or NZ First become the makers of King Chris or King Christopher.

Chart Pack of the week

Off-the-charts amount of rain in a day

Fuel tax cuts extended despite prices at pre-war levels

Labour bounces back in the polls

US wage inflation rolling over too

IMF points out NZ has the most punitive GST in the world

Substack of the week

Ka kite ano

Bernard

TLDR: Chris Hipkins signalled in his first week as PM he was open to loosening migration settings and would ‘rein in’ unnecessary Government spending to focus on ‘bread and butter’ cost-of-living issues once he picks his full Cabinet next week.

Also in our political economy, the global economy and geo-politics this week:

* December quarter inflation was softer than the Reserve Bank (Te Pūtea Matua) expected so some economists and most traders dialled down their expectations for the bank’s next rate hike on February 22 to just 50 basis points from 75 basis points;

* Signs of a soft landing with slower inflation emerged in the European and US economies, leading traders to lower wholesale interest rates in the hope the US Federal Reserve and the European Central Bank ease back on their inflation-fighting rate hikes;

* Germany agreed to release its own and other European nations’ Leopard II tanks for Ukrainians to fight Russian troops with, as long as America sent some of its own Abrams tanks;

* The scientists running the Doomsday clock moved its hands 10 seconds down to be 90 seconds from the ‘midnight’ of a global nuclear, climate and/or pandemic catastrophe, which was the closest to the end time since it was created in 1947; and,

* MetService reported this morning Auckland had its wettest day ever yesterday, with Auckland Airport flooding and being closed until midday today after 249mm fell in a single day, which was 54% more than fell in the previous wettest day of 161.8mm on Feb 16, 1985. More rain fell on the Airport in an hour than would normally fall in a month. January will be Auckland’s wettest month ever after Aotearoa recorded its hottest year ever. Mayor Wayne Brown eventually declared an emergency. We hope all our subscribers are safe and well.

In the podcast above of our weekly ‘hoon’ webinar for paying subscribers last night at 5pm, co-hosts Bernard Hickey and Peter Bale talk to special guests Foreign Affairs Professor Robert Patman from the University of Otago, ANZ economist Finn Robinson and University of Auckland Associate Professor Susan St John about:

* Chris Hipkins’ first week as PM;

* Grant Robertson’s decision to go list-only;

* Germany’s decision to release its Leopard II tanks for Ukraine to use;

* Softer-than-forecast domestic inflation data and what it means for the Official Cash Rate decision due on Feb 22;

* the likely slowdown in the US Federal Reserve’s rate hike this coming Thursday;

* the Government’s long-stalled Working For Families review; and,

* how the various welfare payment settings punish those with young families for earning extra money much more than pensioners are punished for earning more.

The Chart Pack of the Week

Lower - Global shipping container costs fell to pre-pandemic levels. Visual Capitalist

Slower - Quarterly NZ non-tradable inflation fell to 1.5% in the December quarter from 2% in the September quarter. Stats NZ

Softer - US GDP growth slowed to an annual rate of 2.9% in the December quarter from 3.2% in the September quarter, which was better than expected. US Bureau of Economic Analysis data.

Better - Business pricing intentions as measured in ANZ’s monthly business confidence survey bounced in January, but are off their highs.

Data Points of the Week

US$25.461 trillion - US GDP in nominal terms in 2022, up 21% from 2020 and up 8.2% from 2021. Real US GDP rose just 1.0% in 2022 from 2021. US BEA

29.3% - The rise in New Zealand’s domestic air travel prices in the December quarter from the same quarter a year ago. International air travel prices rose 11.6% in the quarter from a year ago. Stats NZ.

Some wild things

Ka kite ano

Bernard

TLDR: Jacinda Ardern shocked almost everyone by returning from a summer break this week and resigning as Prime Minister because she said had “nothing left in the tank.”

Perhaps even more surprising, Deputy PM and Finance Minister Grant Robertson said he did not want the top job, having tried and failed twice to become Labour Leader in 2011 and 2014.

Within 48 hours, the Labour Caucus settled on Chris Hipkins as the sole candidate to be Ardern’s replacement as Prime Minister. The caucus is expected to confirm him as the new Labour Leader and next Prime Minister shortly after 1pm. He is then expected to give his first news conference in the Beehive Theatrette at 3pm and confirm expectations his deputy will be current Social Development Minister Carmel Sepuloni. I’ll be there to ask questions and welcome suggestions in the comments below.

The podcast above for all subscribers is a recording of the weekly live ‘hoon’ webinar for paying subscribers we had on Friday evening at 5pm. This week’s edition is the first for 2023. I co-hosted the webinar from a car at the Queen Elizabeth Park on the Kapiti Coast, while fellow co-host Peter Bale was north of Auckland overlooking Kawau Island. University of Otago International Relations Professor Robert Patman was in Dunedin and former Labour MP and current Community Law Centres of Aotearoa CEO Sue Moroney was in Auckland. The recorded version reproduced here is shorter than the original live version because we had some technical problems and I’ve cut out the boring bits. Many thanks to 100 or so paying subscribers on the webinar for your patience.

We spoke almost exclusively about the resignation of Jacinda Ardern and its meaning for Aotearoa, the Labour Party and future policy.

Briefly elsewhere in the news in our political economy, the global economy and geo-politics this week:

* The US Government hit its US$31.4 trillion debt ceiling and was forced to start cash preservation measures that will extend its runway to avoid a financially catastrophic default until June, with the hope the Republicans who control the House of Representatives will allow a debt ceiling increase before then;

* The Bank of Japan surprised markets by sticking with its loose monetary policy of bond buying to hold down its long-term interest rates below 0.5%, but most expect it to relent some time after a new Governor is appointed in April;

* China reported GDP growth in 2022 of less than half the 5.5% it had been targeting because of a slump in its apartment development market and repeated lockdowns until its December opening up; and,

* China also reported its population fell in 2022, which was its first fall in almost 60 years and an indicator of the beginning of a longer-term decline that may have already seen China surpassed as the world’s most populous nation.

Ka kit ano

Bernard

PS: Peter Bale now has his own substack and I’d recommend you all sign up. It’s over here Media News You Need - Curated by Peter Bale

TLDR: This year the long effects of covid and Russia’s invasion of Ukraine generated global labour and energy supply shocks that fired up already-hot demand-led inflation from 2020 and 2021. That forced central banks to slam on the interest rate brakes, which is forecast to create recessions next year, just as inflation comes off the boil.

In Aotearoa, the Labour Government’s popularity cratered and house prices slumped at the same time as covid finally raced through a mostly-vaccinated population in a couple of waves. Covid, vaccination mandates and winter flu outbreaks stressed an under-invested and under-staffed health system to near breaking point and tore holes in our already-weak social cohesion, especially during protests at Parliament in February and March. The National/ACT Opposition is now in pole position to win the general election late next year just as unemployment starts rising and most homeowners with mortgages re-fix at rates closer to 7% than 3%.

The podcast above includes the final hoon of the year with co-hosts Bernard Hickey and Peter Bale, along with special guests Robert Patman, Josie Pagani and Rod Oram on 2022’s big events in the geo-political economy.

A deeper dive into the big events of 2022 and beyond

It has been a bigger year than most so I thought it would be worth looking at both the context into which it fell, and what that might mean for the future.

In the longer term, Aotearoa-NZ’s political economy of our ‘housing market with bits tacked on’ remains stuck in a rut of two fiscal rules that both major parties believe median voters want because they protect their tax-free gains in land values. Labour believes and National is reinforcing the fiscal framework that taxes should be not much more than 30% of GDP and net Government debt should never go over 30% of GDP. Those rules are stopping the Government from repairing a $100 billion infrastructure deficit built up over 30 years. They also stop the creation of the productive capacity for more high population growth that both parties want, but won’t talk about, plan for, or fund for.

In my view, we remain in an age of magical thinking where most politicians, politicians and voters believe we can still have low taxes and low investment with high population growth and high wages. Until we break out of this ‘unholy trinity’ or ‘impossible trilemma’ of low taxes and low investment, high migration-led population and nominal GDP growth and free movements of people, capital and goods and services, our society and economy will be stuck with:

* low productivity and real wage growth from an economy based on that housing market and extractive export industries such as dairying, pine forestry, tourism and international education;

* tax and investment settings that only make sense for land owners able to capture the leveraged, unearned and untaxed gains from residential land value inflation for themselves and their families; and,

* the growing risk of an exodus to Australia from the half of our young people who were born and/or grew up in Aotearoa, but are from renting families and see little real future for themselves to build their own families here because our housing costs, both to rent and buy, are still the highest in the world relative to incomes.

Essentially, we cannot have it all without ending up ‘chasing our tails’ trying to fill the country with new migrant workers faster than our renting residents leave. In this scenario, we keep our low-tax and low investment settings and end up with the mulitple home-owning voters constantly lobbying for ever-looser migration settings, lower taxes, lower public investment and lower Government debt to keep generating the tax-free capital gains on land values that support their own financial futures.

That would leave us with a hollowed, brittle deeply uneven and unfair society, prone to destabilising exoduses of people and capital, along with the ongoing destruction of our water, soil, climate and overall wellbeing.

In 2023, I’d like to spend more time profiling and examining the various policy options for reform that might be possible in the current version of our political economy, especially in the leadup to elections. I welcome the guidance of paying subscribers in the poll below on how to focus my time working through The Kākā in the year ahead.

The three things that mattered most in 2022

In my view, the three events that changed our political economy and spotlighted the problems we have around housing, climate and child poverty were:

* the Parliamentary protests in February and March that demonstrated how vulnerable our social cohesion and national security was to disinformation and disruption sourced from overseas, largely because of the widening gaps over the last 30 years between our rich and poor, the governed and governing, and between the big cities and provinces;

* the Russian invasion of Ukraine in late February accelerated a drift away from globalisation that began in earnest after the Global Financial Crisis, along with forcing a panicked shift to both use more coal instead of gas globally in the short term, and ramp up moves to shift from fossil fuels to renewable energy in the long run; and,

* the concerted and rapid tightening of monetary policy by developed world central banks, including our own, which hammered asset prices and may be a panicked over-reaction to the ongoing inflationary effects of supply shocks to labour, energy and food supplies from the long-term effects of covid and the Ukraine war.

Three things to watch for in 2023

As direct and indirect consequences of those events, these are the three big things I’ll watching most closely for in 2023:

* Australia’s increasing willingness to grant full residency and fast pathways to citizenship for New Zealanders from Anzac Day 2023, given Australia’s labour shortages are massively larger than ours and new Labor PM Anthony Albanese is keen to suck Kiwis over the Tasman to fill those gaps, using the promise of easy and fast ‘first class’ residency as bait on top of the usual 30-40% pay increases after housing costs;

* A likely outright National/ACT victory in general elections due in September, October or November, which would lead to an immediate bounce in the housing market in anticipation of looser migration settings, a freeze in housing and transport investment needed to increase housing supply, along with Government spending cuts to engineer a faster return to surplus, less public debt and lower interest rates (which would also accelerate the housing bounce); and,

* A likely pivot lower in official, wholesale and fixed mortgage interest rates by the final quarter of next year because of a sagging in global economic growth and inflationary pressures through early 2023 that force central banks to drag their expected rate tracks lower.

In short, I expect home-owning voters to be wealthier and happier by the end of 2023, but with young renters eyeing their exit options to Australia and employers pushing a new National/ACT Government even harder to loosen migration settings to fill the gaps. By the end of 2023, the big city rail and housing projects started by Labour will be frozen and councils will suspend their transport mode shift and medium density housing drives.

Floating the idea of The Kākā Project for 2023

However, through 2023 I’d like to build and stress-test a cohesive and politically possible set of policy ideas to help voters understand the issues and options through an election year.

I’d like to call this The Kākā Project and run it from late January until the election. It would culminate in a full document (a book?) and/or set of publicly shareable presentations, podcasts and articles to stimulate and inform debate. It would be based around:

* the idea of a new annual broad-based and low-rate land value tax being paid by the owners of all occupied and unoccupied residential-zoned land;

* that those land taxes pay for hundreds of billions of new housing, transport and water infrastructure investments over the next 50 years;

* that those investments dramatically improve housing affordability, eliminate climate emissions, eliminate child poverty, keep net public debt below 60% of GDP and reverse $1 trillion worth of intergenerational wealth transfers that were engineered accidentally on purpose by most land-owning voters, politicians and policy-makers over the last 30 years;

* how these types of policies might be politically viable in the current climate; and,

* how they’d be designed around an agreed population plan for 15 million residents of a rich, stable, vastly-more-equal and growing carbon-zero economy by 2100.

I’d welcome your feedback below. It is conditional on the clear backing and support of paying subscribers, given it is likely to see me do less of the pure news summarising I have often done in the Dawn Choruses. I’d love paying subscribers to vote and/or comment below to give me more direction.

Tell me what you’d like me to work on next year

Ka kite ano

Bernard

TLDR: This week in geo-politics, the global economy and Aotearoa’s political economy, we learned:

* the Government’s RMA replacement will take 10 years and keep distracting us all from the magical thinking of the last 30 years that low taxes and investment co-exist with high population growth; Thursday’s Deep Dive

* a new report showed the big electricity gentailers paid out $3.7b in excess dividendss in the last eight years, starving investment in renewable generation and delaying our emissions reduction; Tuesday’s Deep Dive

* three opinion polls showed National’s lead over Labour narrowing and Christopher Luxon’s personal popularity continuing to plateau as Labour targets him personally;

* TOP proposed an alternative to Three Waters for planning and funding water infrastructure that uses existing structures and avoids balance sheet separation and centralised co-governance; Friday’s Dawn Chorus and,

* China distanced itself from Russia’s invasion of Ukraine by signing up to a G20 communique denouncing an era of war and declaring the use of nuclear weapons inadmissible.

What was in this week’s Hoon

We talked with Dominion Post columnist Josie Pagani about polls showing Labour and the Greens reducing their deficit to National and ACT, along with the plateauing of Christopher Luxon’s personal popularity. We talked with University of Otago Foreign Relations Professor Robert Patman about the Russian-built missiles fired by Ukraine that strayed over the border into Poland, and President Xi Jinping’s hopeful appearance at the G20 and APEC summits. Our apologies, but the promoted appearance of Adam Jasser was a bit too ambitious. We hope to get him back another week.

Peter and I also talked about Elon Musk’s week of chaos at Twitter, the implosion of Sam Bankman-Fried’s FTX and look ahead to the final interest rate decision of the year by the Reserve Bank this coming Wednesday.

Some longer reads and listens for the weekend

Profundities, spookies, feel-goods and curiosities

Have a great Sunday

Mā te wā

Bernard

TLDR: This week in geo-politics, the global economy and Aotearoa’s political economy, we learned:

* Te Putea Matua (The Reserve Bank) found in its review of its own performance over the last five years it complied with its own act couldn’t have done much different to stop inflation jumping to 7% or house prices surging 45% in 18 months;

* The Opposition was “shocked and appalled” at the reappointment of Adrian Orr as Reserve Bank Governor for another five years, saying it would launch an independent inquiry into the central bank’s actions over covid if it was elected next year;

* PM Jacinda Ardern criticised bank profits as too high for them to keep their social licenses, but did not support a windfall profits tax or a markets study;

* Energy Minister Megan Woods delayed forcing fuel companies to mix in biodiesel to reduce emissions by a year to avoid increasing diesel costs by as much as 10c/litre; and,

* US inflation was slower-than-expected in October, amplifying hopes global interest rates won’t have to rise so much to control inflation, which unleashed stock and bond market rallies, which makes mortgage rate hikes here less likely for now.

What was in this week’s hoon

We talked with Oil Change International’s Global Campaigns Manager David Tong from Sharm-el-sheikh about progress at COP27 and McClatchy investigative journalist David Wieder from Miami about better-than-expected results for Democrats in mid-term elections and worse-than-expected results for candidates backed by Donald Trump.

We also talked about:

* Adrian Orr’s contested reappointment;

* The collapse of crypto-currency exchange FTX after its founder Sam Bankman-Fried failed to repay depositors with the token he created and then borrowed off them; and,

* Elon Musk’s tumultuous week in charge of Twitter, including warnings of bankruptcy and suggestions he would take it behind a paywall.

Other places I appeared this week

I was on RNZ’s Morning Report on Friday to talk about the Reserve Bank’s review.

I was on 1News talking about bank profits and a windfall tax on Tuesday.

Ka kite ano

Bernard

TLDR: This week in geo-politics, the global economy and Aotearoa’s political economy, we learned:

* PM Jacinda Ardern didn’t take the Three Waters offramp offered to her by the new mayors of Auckland and Christchurch;

* Aotearoa kept growing jobs and real incomes at faster-than-expected rates in the September quarter;

* Reserve Bank stress tests found banks were so profitable and well stocked with spare capital they could handle a 47% fall in house prices;

* the US Federal Reserve and the Bank of England both hiked their key interest rates by 75 basis points, setting the scene for the Reserve Bank to do the same on Nov 23; and,

* Elon Musk bought Twitter, retweeted a crazy conspiracy theory, deleted the retweet, and then sacked the social network’s moderation and ethics team, while Substack launched a chat function on its iOs app for subscribers forming around writers and podcasters (including me).

What was in this week’s hoon

We talked with special guest University of Canterbury political scientist and IPCC climate change report co-author Bronwyn Hayward about this weekend’s COP27 conference in Egypt, including the geo-political challenges for emissions reduction and how well (or not) Aotearoa is responding.

Later, we talked about:

* the mid-term elections in the United States this coming Wednesday (NZ Time);

* the future of Twitter under Musk and the alternatives growing on Substack;

* the return of Binyamin Netanyahu in Israel;

* China’s Orwellian attempt (still) to eliminate covid ; and

* how rising real incomes and rudely healthy household balance sheets contrast with the gloomy rhetoric of opposition politicians calling for the biggest tax cuts for the wealthiest.

What was on The Kākā this week;

For examples of how I covered these issues for paying subscribers this week, here’s my deeper dive analyses of:

* rising real weekly incomes and the resilience of home-owners’ finances to rising interest rates and falling house prices in Thursday’s email;

* the Government’s decision to drive past a Three Waters offramp offered by Wayne Brown and Phil Mauger in Tuesday’s email;

* a Green call for a windfall profits tax in Monday’s email;

* whether this week’s big rate hikes in the United States and Britain were too big and fast for the global economy to handle in Friday’s email; and,

* how National’s tax cuts would deliver more than half of their $11.1b in lost tax revenues to the top 10% of income earners and landlords in Wednesday’s email.

Other places I spread my journalism this week

I talked on TV3’s The Project about rising real incomes and low debt

I podcasted about broken relations between councils and the Crown

I appeared on TVNZ’s Breakfast to talk about Three Waters

Charts of the week

Useful longer elsewhere for the weekend

Profundities, curiosities, spookies and feel-goods

Cartoons of the week

The Craic of the week

Mā te wā e hoa

Bernard

TLDR: This week in geo-politics, the global economy and Aotearoa’s political economy, we learned:

* China is retreating further into itself under a now completely dominant Xi Jinping;

* global investors think central banks are about to do a ‘dovish pivot’ on interest rates;

* but Adrian Orr isn’t ready to pivot yet and wants unemployment to rise first;

* our Employment Court ruled Uber drivers are employees and the Fair Pay Act passed;

* ANZ reported record profits and its economists forecast a 27% fall in real house prices; and,

* The UN forecast current climate policies would warm the planet by 2.8 degrees celcius by 2100.

What was in this week’s ‘Hoon’

In this week’s ‘Hoon’ live webinar for paying subscribers on Friday at 5pm that is in recorded podcast form above, co-host Peter Bale and myself talked with special guests Robert Patman from the University of Otago and Jason Young from Victoria University of Wellington about:

* Vladimir Putin’s unproven allegations Ukraine is planning to set off a dirty bomb and the latest signs his henchman in Russia are unhappy and organising against him;

* America and NATO’s continued solidarity behind Ukraine despite the occasional waverings of both some Republicans and Democrats ahead of key mid-term elections on Nov 8;

* President (for life) Xi Jinping’s clean-out of the rest of his rivals and any remaining ‘opening up and reforming’ influencers from China’s top leadership groups at last weekend’s five-yearly Party Congress, which further spooked international investors who should have known better; and,

* Why US moves to block exports of computer chip technology to China are so important.

Separately, Peter and I talked about:

* the unfairness of the Reserve Bank’s aggressive rate-hikes on covid’s losers, and how the Government itself could help to reduce inflation by cutting GST and other fees and levies;

* the Future of Local Government Review’s draft proposals to change council finances and governance, including ideas to lower the voting age, create four-year terms and create a co-investment fund; and,

* What Elon Musk’s takeover of Twitter might means and why Facebook’s valuation crash shows markets sometimes do better work than regulators.

What was on The Kākā this week

For examples of how I covered these issues for paying subscribers this week, here’s my deeper dive analyses of:

* the fairness of the Reserve Bank’s fast rate hikes in Friday’s email and podcast;

* the early signs of easing inflation pressures in Thursday’s email and podcast; and,

* how global investors and traders are positioning for a ‘dovish pivot’ by central banks later this year in Tuesday’s email and podcast.

Other places I spread my journalism this week

A discussion about the economy on TV3’s The Nation on Saturday

Scoops this week elsewhere

Useful longer reads, listens & watches elsewhere

Charts of the week

Right back to where we started from?

ANZ’s economists this week increased their forecast fall in house prices from the peak in November to a trough next year to 18% in nominal terms from 15% previously. It also forecast a wage-inflation adjusted 27% fall in real house prices back to pre-covid levels.

A good year for the bankers

ANZ reported its profit in the six months to September 30 rose 9.6% to $920m from the previous six months because of rising net interest profit margins as the Reserve Bank hiked interest rates and because it grew mortgage lending sharply in 2020 and 2021.

We’re doing nowhere near enough

The UN Environment Programme reported this week that that planet was on track to warm by a disastrous 2.8 degrees by 2100 with current policies.

Profundities, curiosities, spookies and feel-goods this week

Mā te wā

Bernard

TLDR: This week in geo-politics, the global economy and our local political economy, our inflation was hotter than expected as profit margins rose, Xi Jinping doubled down on China’s zero Covid strategy, the Government loosened migration settings without a population plan or enough infrastructure, and Liz Truss resigned.

The podcast above is a recording of our weekly ‘hoon’ (plural for Kaka) webinar for paying subscribers, which co-host Peter Bale and myself regularly do on Fridays for an hour at 5pm. This week’s edition includes special guests Robert Patman, a Professor in International Relations at the University of Otago, and Kelvin Davidson, the Chief Property Economist at CoreLogic. We talked about:

* the chances of a Russian nuclear strike in Kherson this weekend;

* whether Russia might have cut undersea cables to Britain;

* why Iran sending drones to Russia is disturbing;

* how the faster-than-expected CPI inflation figures here on Tuesday led to mortgage rate increases and may cool a reheating housing market; and,

* what Christopher Luxon should learn from Liz Truss’ demise.

Here’s what I focused on this week

Ready fire aim - PM Jacinda Ardern denied the Government was flying blind on migration and hadn’t built enough infrastructure before removing its residency planning range and loosening visa settings (see my full analysis here from Tuesday);

It was the lettuce wot won it - UK PM Liz Truss resigned after 44 days in the job because global investors rejected her plans for unfunded tax cuts for the rich and an anti-climate approach, which offers lessons for Christopher Luxon here in my full analysis yesterday;

A profit-price spiral - Data on Tuesday showing CPI inflation in the September quarter of 7.2% from a year ago was higher than the 6.5% consensus forecast from economists, which I argued on Thursday is partly due to companies globally and here widening their profit margins because they have greater market power.

Some longer weekend reads

George Magnus is right on this. The Chip Choke is a very big deal.

Very worried Germans - Jeremy Stern’s piece in The Tablet this week about Germany’s fears about Russia and the winter is more than sobering. A chilling sample here:

“As many Germans see it, Ukraine’s dazzling advances do not leave Putin with the binary choice of accepting his own death and defeat or else embarking on Armageddon. He may instead be left with the potentially attractive option of deploying a tactical nuclear bomb to achieve a limited military objective in Ukraine, or of causing an “accident” at the Russian-occupied Zaporizhzhia nuclear plant and attempting to blame it on the Ukrainians. This would almost certainly trigger some sort of NATO attack on Russia—to which Germany would never, under any circumstances, ever agree. Berlin would instead lead a small dissenting bloc within NATO, including Hungary, refusing any use of its funds, communications, weapons, or territory. In other words, Germany would violate its treaty obligations—as Putin has likely judged.”

“NATO would thus officially break along the lines Putin knows it is already broken. The EU’s commitment to Ukraine would also fracture. The U.S.-German alliance would be no more. Even a small nuclear explosion would send markets crashing, and the German economy would grind to a halt. All of Europe would enter a depression more severe than anything Russia has experienced to date. It would no longer make sense to speak of “the West.” This, as much as reclaiming lost territories, would be Putin’s life’s work.” Jeremy Stern in The Tablet

Useful longer watches

Profundities, soberings and feel-goods

The Craic

Have a great weekend

Ka kite ano

Bernard

TLDR: This week on the weekly ‘hoon’ webinar for paying subscribers on Friday at 5pm for an hour, myself and co-host Peter Bale, along with economist Rodney Jones and University of Canterbury-based and Ukrainian-born political communications scientist Natalia Chaban discussed the news of the week in geo-politics, the global economy and Aotearoa’s political economy, including:

* the anti-Labour backlash in local elections last weekend that saw older pro-car and anti-densification candidates win most of the mayoralties (except Wellington) … see my analysis earlier in the week here;

* the Government’s proposal for a world-first methane and nitrous oxide levy on farmers to slash climate emissions, which beef and sheep farmers said would gut their sector because the scheme would not allow offsets from mass tree planting on farms and the levy would be set by the Government, rather than farmers (see my analysis here from Wednesday);

* the Government’s announcement of the reopening of the Skilled Migrant and Parent residency visa programmes, along with the removal of the decades-long residency planning range (see my analysis here out today);

* the Bank of England’s desperate attempts to avert a financial crisis in Britain after a disastrous mini Budget by new PM Liz Truss and new Chancellor of the Exchequer Kwasi Kwarteng proposed £45b of unfunded tax cuts for the rich (we talked about this with Rodney Jones last night before this morning’s news that Liz Truss had sacked Kwarteng and done a U-turn on a planned corporate tax cut);

* hotter-than-expected inflation figures in the United States that is driving up expectations for US interest rates, driving up the US dollar to record highs and threatening financial market mayhem (we talked about this with Rodney Jones);

* this weekend’s Communist Party Congress is set to confirm President Xi Jinping for a third term and unveil a new lineup of China’s leaders (we talked about this with long-time analyst of China’s politics and economy Rodney Jones); and,

* Vladimir Putin lashed back at Ukraine with dozens of missile strikes on civilian targets in cities across the country after his signature bridge to Crimea was blown up (we talked with Natalia Chaban about how the strikes only hardened Ukraine and West’s resolve to push Russia out of Ukraine completely).

My longer deep-dive listening for the weekend

This weekly podcast from New York-based British political and economic historian Adam Tooze on Europe’s energy crisis is an eye-opener in explaining just how important Germany’s reliance on Russian gas was and how broken it is now.

This is a weekly podcast from Irish economist David McWilliams is one I try to listen to. He is a hoot and this week’s piece on how central bankers want more unemployment is a cracker. It explores the ultimate class war behind inflation targeting.

This week’s episode of The Spinoff’s ‘Gone By Lunchtime’ is an excellent and comprehensive debriefing of last week’s local council election results.

Useful longer reads elsewhere

There’s so much news around this week, but this shouldn’t be ignored. The US is really, really cracking down on US high tech exports or sharing with China.

Paul Krugman makes some great points about this week’s hot US inflation number. It’s mostly about rents, and the CPI numbers that looked hot are lagging indicators of rents that are now falling.

This is another big story among many this week I haven’t had a chance to tackle properly.

This is a sweeping and fascinating piece from Ben Hunt.

Scoops of the week elsewhere

Charts of the week

Cartoons of the week

The Craic

I’m a big fan of Gillian Tett from the FT.

Profundities and feel-goods

Ka kite ano

Bernard

Have a great weekend.

It may be a bumpy ride for the world but the era of Donald J. Trump will die with him if we can wait him out says the author of four best-sellers on the indefatigable real-estate bloviator-turned-President.

Michael Wolff has spent a decade tracking Trump’s improbable rise, Icarian fall, and resurrection, fed by salacious insider stories — gossip and alarming insights. His latest book All Or Nothing: How Trump Recaptured America is a fast-moving page-turner released within a month of the inauguration of the 45th president as the 47th.

“It feels like I have written too many books on Donald Trump, and, I am trying to resist…working on a fifth,” Wolff told The Hoon. Yet, Trump really is absorbing — drawing all the light towards him and needing it desperately.

In a rollicking interview for The Hoon with Bernard Hickey and Peter Bale, Wolff described the in-fighting in an inexplicably successful Trump campaign fuelled by Trump’s singular focus on himself; his predictions (spoiler alert: Wolff reckons Trump will explode); and his journalistic methods and thoughts on the future.

The one and only

Wolff describes Trump as “suis generis” — Latin for ‘one of a kind’ and says he will neither be repeated nor leave a legacy for others to pick up the mantle of Trumpism.

“It's going to end in the obvious way: he's going to come to the limits of his term, and at 78 years old, he's going to come to the limits of his life. So at that point, we will be able to to to exit from this story. It will not go on post-Trump. It is not going to go on with JD Vance. It's not going to go on with any of these other Shmendriks [a Yiddish word for idiots.]

“Trump is truly sui generis. There is no one like him. No one is going to be able to do this again. There will be all sorts of damage and wreckage in his wake, but nevertheless, we will, at at the point at which he exits, return to some relatively familiar baseline,” Wolff said on The Hoon.

Meanwhile, like watching an arsonist at work, it’s hard not to stare: “You can use that metaphor or the train wreck because I continue to believe that it will finally smash into something that it cannot go through.”

The book, whose audiobook version is read by Wolff with dry cynicism and a little awe, captures the madness of the Mar a Lago crowd who insist on calling Trump “Mr President” even when out of office, as though the election of Joe Biden never happened (which of course in his mind it didn’t). The sycophants and enablers tell Trump what he wants to hear cocooned in his own ego and kitsch castle.

Wolff, writing in the book, marvels at Trump’s orange rhino hide and determination to turn legal cases and convictions that would destroy anyone else into ammunition for his insatiable desire for headlines: ‘Given the rage with which Trump continued to damn the “witch hunt” against him, he remained, in fact, fairly sunny about his situation. This was in part because he was, by nature, impervious to the outside world. He lived in a highly controlled universe populated only by lackeys, flunkies, and sycophants. And, too, the vulnerabilities that undermined ordinary mortals—the doubts, shame, and fear—­were absent in him. Conflict made him feel alive.’

“What Donald Trump is stays as a constant. The fact that he became the president is just like changing real estate. The guy in the White House in 2017…was…no different from the guy in Trump Tower. The guy in Mar a Lago was no different from the guy in the White House and here we are again. The fixed point always is Donald Trump. That…thing…everybody says [that] ‘the indisputable point of presidential history is that the presidency changes whoever holds it.’ This is not true about Donald.”

Wolff dismisses the idea that behind the madness of Trump is a cabal of focused, intelligent, political operatives somehow using him to fulfill their own agenda be that tariffs, disengagement from alliances, or almost any other policy or strategy.

“Headlines are the strategy, whether that's chaos or not…and because today's headlines are obviated by the next day's headlines, I guess that is a form of chaos. But central to this is headlines. He needs to dominate every news cycle, every headline,” Wolff said. “That's what he lives for. That's the entire point of the process.”

Reports that people around Trump a cooking up a plan — a so-called Mar a Lago Accord — to weaken the dollar and bully holders of U.S. debt — are the stuff of being in the Trump orbit but having no real influence over the star at its centre.

“There's a clear dichotomy,” Wolff told The Hoon. “There's what's on Trump's mind, and then the conversations everybody else has been having. And the fact that there is not necessarily a connection there means that the conversations everybody else has been having are either meaningless or involve something that Trump doesn't care about…I can't say this emphatically enough…let me be perfectly clear, he's not listening to those people. They have never actually spoken to him. They've listened to him. They have never spoken to him. They have never gotten two consecutive sentences out in his presence.”

A review in the New York Times captured the horrifying yet compelling drama portrayed in Wolff’s tale of TrumpWorld and in the norm-immolating presidency.

“What excites Trump most is not the fire but the clanging fire engines and sirens rushing to the scene,” a Trump insider tells Wolff, prompting the New York Times reviewer to wonder ‘Will President Trump leave policy to ideological terrors, people like his draconic homeland security adviser Stephen Miller? Will he be tempted to light more fires himself, just to see what chaos will ensue? Either way, when the fire trucks come, one thing is certain: Wolff will be hanging off the back.’

Wolff admits he struggles to pull himself away from the spectacle of Trump: “The story goes on. I mean, I wish it did not go on, but it continues to go on so that there is reason to tell it. Also, it’s Donald Trump, so nobody pays attention to anything else. So if you're a good writer, if you're a writer of books, it is a propitious subject.”

“… a lying sack of s**t”

For his part, Trump has attacked Wolff frequently but in his comments on the new book effectively confirmed Wolff did have access in his circle: “He called me many times trying to set up a meeting, but I never called him back because I didn’t want to give him the credibility of an interview…I assume, however, he was able to speak to a small number of people, but not meaningfully.”

Trump spokesman, Stephen Cheung, whom Wolff described as a “nice guy” to The Hoon, called the writer “a lying sack of s**t”.

A writer first

What of his craft? Wolff prefers to describe himself as a writer rather than a journalist — telling stories with verve and panache rather than what he might see in other more reportorial authors as a halting approach distracted by rules on sourcing, attribution, and fact-checking. He reckons gets the sweep of history right.

He and I have talked before about what he calls the “Church of Journalism” whose high priests accuse him of flamboyant if not inflated storytelling. Not unlike Trump might, Wolff gives it back at least as good as he gets and has the homes and lifestyle to show for the millions of books he has sold — not least on the Trump saga.

He also bridles at a comparison with say Bob Woodward of the Washington Post who has built a career as an author on the now 50-year-old scoop on Watergate.

“The only difference between Bob Woodward's approach and method and mine, because Bob also allows a range of anonymous sources, is that I'm a significantly better writer than Bob Woodward is,” Wolff says archly and with a smile sitting in front of a bookcase where I can see tomes by the pugnacious Norman Mailer.

Apart from chronicling the life and times of Trump, Wolff is best known as the most biographer of Rupert Murdoch. In The Man Who Owns the News: Inside the Secret World of Rupert Murdoch Wolff turned a remarkable level of access to Murdoch and his family into a story that laid bare the drama that would become Succession.Fire & Fury described Murdoch calling Trump a “f*****g idiot”. Yet Murdoch and his Fox News are crucial allies of the monster they created, Wolff said: “It’s among the most bitter ironies of Rupert’s life: his dream was to elect a US president and that, tragically for him, turned out to be Donald Trump.”

Interviewing Wolff at the gorgeous Long Island second home from which Wolff spoke to us, journalist Ben Smith wrote that the huge sales of Fire & Fury were allowing him to ‘finally afford the lifestyle he had already been living.’

But what of the future? Is he scared his young children and now grandchildren from the offspring of his first marriage will grow up in a world defined by the chaos of ‘TrumpWorld’: “I tend to be an optimistic person…so I tend to believe this too will pass only to bring on something else that will, in turn, pass.”

* The Hoon is an offshoot of Bernard Hickey’s The Kaka. We record the show in front of a live audience on YouTube each Thursday and then publish an edited audio version on the usual podcast platforms on Friday.

TLDR: This week in the news in geo-politics, the global economy and Aotearoa-NZ’s political economy:

* Te Pūtea Matua (The Reserve Bank) hiked its interest rates again to control inflation (Thursday’s email);

* the Government revealed a robust set of accounts that will allow room for competing tax cut offers in next year’s election (Thursday’s email);

* local elections came to a close with a revolt against the Government brewing (Interviews with Efeso Collins and Simon Wilson);

* TOP proposed a residential land tax to pay for income tax cuts for low to middle income earners (Interview with Raf Manji)

* An increasingly-desperate Vladimir Putin faces growing opposition at home and more defeats on the battlefield in Ukraine; and,

* the IMF and UNCTAD warned about a slowing of global economic growth, especially in developing economies, because of the rapid and concerted tightenings of monetary policy led by the US Federal Reserve (Friday’s email).

We recorded the podcast above from the weekly ‘hoon’ webinar we do for paying subscribers every Friday evening at 5pm for an hour. This week co-host Peter Bale and myself talked about the local elections, flawed plans to merge TVNZ and RNZ and the potential for tax cuts next year.

We talked in the second half of the show with regular guest, University of Otago Foreign Relations Professor Robert Patman about the situation in Ukraine, the risk Putin might use tactical nuclear weapons and Saudi Arabia’s defiance of the United States by promising (along with Russia) to cut oil output.

Five things this week

These are the five key bits of news and analysis this week that may not have crossed your radar and I thought was important, given in my focus on the issues of improving housing affordability, reducing climate emissions and reducing child poverty. I welcome the support of paying subscribers to allow me to do this work, and to share it publicly after paying subscribers see it first.

Te Pūtea Matua may hike 75 bps to 4.25% on Nov 23

Deep in the notes from the Monetary Policy Committee’s commentary with the statement on this week’s fifth consecutive 50 basis point hike in the Official Cash Rate to 3.5%, Te Pūtea Matua said the committee considered putting up the OCR by 75 basis points, which would really have thrown the cat into the mortgage rate pigeons. It argued this was partly because mortgage rates had yet to rise in line with wholesale rates (swaps rates) and it wondered if the tightening therefore needed a hurry up.

In the end, the committee decided against 75 basis points, in part because it thought the banks would get around to putting up mortgage rates more.

“The Committee expects that higher wholesale interest rates will be reflected in higher retail interest rates, particularly deposit rates, as banks compete for funding.” MPC

Here’s the chart for the two year swap rate, which has risen by 350 basis points from 1.25% before Covid to 4.75% now. In theory, that should have meant average two-year mortgage rates should have risen from 3.5% pre-Covid to 7% now, all other things being equal, including profit margins.

Instead, what we’ve seen is the average two-year mortgage rate has risen from 3.5% pre-covid to 5.5%, although it has risen 300 basis points from its post-covid low of around 2.5%.

Some of those average figures disguise the discounted rates that banks offer so the 7% estimate of where they ‘should’ be may not include the loss-leader discounts the banks include.

So what? - My suspicion is the Reserve Bank wants to see the banks give up some of those discounts and put the mortgage rates up to around 6% from 5.5% now. We’ll find out more on November 23 when the last full Monetary Policy Statement of the year (and the last monetary policy decision) comes out. If the banks have not put their ‘specials’ up closer to 6% by then, that may encourage the Reserve Bank to do a final 75 basis point hike for the year to 4.25%, given the next decision after that is not until February 22.

The bottom line - Brace for a 75 basis point hike on November 23 if inflation is still running hot and the banks have not nudged their retail mortgage rates up much. We’ll find out more about inflation on October 18 (the Tuesday after next) when the September Quarter CPI comes out.

The young are deserting Labour and going to ACT & TOP

The Roy Morgan opinion poll is the only long-running and truly regular monthly public poll but is not promoted or attached to a media outlet or interest group so doesn’t get much publicity. Some others also think it’s an inferior poll to the 1News-Kantar, Newshub-Reid Research, Talbot Mills (for corporate clients and Labour) and Curia-Taxpayers Union polls. The television-sponsored polls are irregular and depend on the whims and budgets of newsrooms. The monthly Talbot Mills poll is not regularly leaked and the Curia poll has not been available publicly and monthly for long. The Roy Morgan poll’s methodology is standard, but its commentary release is written from Australia and often jars, which undermines its credibility. Its numbers though are as good or bad as the others, in my view.

This week Roy Morgan released its September poll of 942 electors taken by landline and mobile phone. It found Labour down 5.5 percentage points to a record-low 29.5% since Labour came to power in 2017. National rose 0.5 points to 36% and ACT rose 2% to 12.5%. The Greens rose 2.5 points to 12.5%. Te Pāti Māori fell 1.5% to 3.5%, while TOP rose 1.5% to 2.5%. On those numbers, National/ACT would be able to govern alone

But the most interesting trend for me was the continued desertion of Labour and National for ACT, Te Pāti Māori and TOP by young men and women. Support for Labour among young women (18-49) fell to 26.5% from 30.5% a month ago and fell for National to 30.5% from 31% a month ago. Support for Labour among young men fell from 30.5% to 27% and fell for National to 25.5% from 35%. Young men increased their support for the Greens to 16% from 9.5%, to 5% from 3.5% for Te Pāti Māori and others (including TOP) to 8% from 4%.

The other thing to watch is whether support for the Government, and therefore Labour, bounces in line with consumer confidence as the summer arrives and passes without more Covid drama, as the economy opens up more and as inflation fades. Consumer and business confidence have bounced in the last couple of months and their may be a lagged effect to boost Labour over the summer.

So what? - TOP/Te Pāti Māori are now regularly polling at 5-6% overall and over 10% for the young. Disillusion with National and Labour’s addiction to untaxed capital gains is beginning to grate among the young, who have much lower home ownership rates.

The bottom line - If TOP leader Raf Manji can win the Christchurch electorate seat of Ilam (where he polled second in 2017 when up against then-National-MP Gerry Brownlee) and drag in one or two more TOP MPs, alongside another three or four Te Pāti Māori MPs, then there is the prospect that TOP and Te Pāti Māori could extract some form of wealth, land or capital gains tax out of Labour or National for either to form a Government.

The bottom bottom line - TOP and Te Pāti Māori need electorate polls done in early 2023 to show they are viable prospects to coat-tail in votes under 5% to win more support from the young who don’t want to ‘waste’ their votes.

The early global inflation indicators are falling fast

We all tend to watch our own inflation figures in the rear-vision mirror, which means here we still think inflation is 7.3%. That was actually four to seven months ago and since then the leading indicators for inflation globally for later this year and early next year are blowing cold as the European and Chinese economies are slowing rapidly because of the Ukraine war, Covid lockdowns and China’s apartment development collapse respectively. The US economy is also slowing.

That means shipping costs and input costs for businesses are falling in Europe and the United States. Chinese inflation hasn’t been nearly as high as elsewhere throughout the last year either. Here’s the charts for Brent Crude (down 25% since June) and the Freightos Global Container price index (down 50% since June)

It will take a while for these to feed through, but the chances are rising that inflation will ‘cure itself’ without central banks having to put up their official cash rates much beyond 4.25% in the next three or four months.

Some scenarios for our political economy in the year ahead

So what? - I’m still in Team Transitory and see mortgage rates falling again late next year as the global economy cools and these big energy and shipping costs surges wash out. If National/ACT remain on track to govern alone from September next year onwards, expect the housing market to take off again in late 2023 in expectation of the repealing of Labour’s tax tweaks for landlords and the effects of lower mortgage rates.

The bottom line - Our housing market’s fundamental over-valuation relative to incomes and rents, will remain in place, and potentially worsen again because the fundamental problems of the non-taxation of residential land value appreciation and the under-investment in infrastructure for new housing and public transport would remain unsolved, especially after that potential election result.

Aotearoa-NZ’s political economy would still be little more than a housing market with bits tacked on that embeds a two-tier society split between the landed gentry families of older, Pakeha home owners and the families of younger (and older) Maori and Pasifika renters.

The bottom bottom line - First home buyers shouldn’t wait for more price falls in the ‘bleeding edge’ markets of Auckland and Wellington, and should get in as soon and as much as they can to ensure they get their share of the leveraged and untaxed gains in land values to come.

The even thicker bottom line - Young renters and old owners who want to change that status quo and grow their own families in Aotearoa-NZ would need to campaign and vote for Te Pāti Māori and TOP in the next election to have a hope of extracting land and/or capital gains taxes out of either National/ACT or Labour. Votes for the Greens are effectively wasted because the Greens would never transfer their deciding votes to anyone other than Labour, which means Labour can ignore any Green demands.

So what will determine which scenario happens?

So what now? - The key things to watch over the next year in these calculations are:

* what happens to polling support for Te Pāti Māori and TOP;

* whether Raf Manji and Te Pāti Māori co-leaders Rawiri Waititi (Waiariki) and Debbie Ngarewa-Packer (Te Tai Hauāuru) are on track to win their electorate seats;

* whether National/ACT remain in the polling position of being able to form Government alone;

* whether Jacinda Ardern resigns as PM in late December or late January to hand over to Grant Robertson (a small chance in my view), which could boost Labour in the polls;

* whether inflation globally and here comes off the boil as expected, and if not, whether the world’s central banks carry on cranking up interest rates (which would keep driving house prices down), or are forced to bail out markets to avoid another financial crisis (which would force house prices up);

* whether, as I expect, Labour eases migration settings to restart population growth in response to demands from businesses and promises of the same from National/ACT, which would support house prices and possibly help Labour in the polls; and,

* whether Australian PM Anthony Albanese confirms a faster pathway to residency in late April next year, which could unleash a flood of those young renters migrating to Australia.

The best-case scenario to achieve better housing affordability, lower climate emissions and lower child poverty? These things would need to happen in combination:

* TOP and Te Pāti Māori would have to win electorate seats and more than 5% in the election, and are able to extract some form of land or capital gains taxation pledges out of either Labour or National;

* Inflation stays uncomfortably high or worsens, which would drive interest rates up and force house prices down; and,

* Labour chooses not to unleash more migration, or does ease settings and the migrants don’t turn up, which I think would be unlikely.

The worst case scenario, which is my current base case, is that:

* National/ACT win Government without the need for TOP/Te Pāti Māori, cut taxes for home owners and repeal the interest deductibility, ring-fencing and brightline tests that are helping to repress house prices at the moment;

* Inflation is clearly dropping by early next year and mortgage rates are dropping through late 2023;

* Migration and population growth is surging by late 2023/early 2024 because both Labour and/or National/ACT have released the restrictions and the temporary work migrants (work visa, students, backpackers) show up because they haven’t worked out how to get into TradeMe property or realestate.co.nz to see the rents and house prices; and,

* This population growth overwhelms the exodus of young renters seeing a future for higher wages, lower rents, more secure and healthy housing and bigger pensions in Australia because the fear of being a second-class non-citizen living there is removed.

Your thoughts? Flaws in the logic or facts you can point out? I welcome comments from paying subscribers below.

Ka kite ano

Bernard

TLDR: I spoke this week in the podcast above to NZ Herald senior writer Simon Wilson about the election campaign for the Auckland Council that ends this weekend. In particular, we looked at the potential makeup of the new council and the attributes of Mayoralty contenders Efeso Collins and Wayne Brown.

This election is crucial for Auckland’s future, given the huge decisions needed in the next couple of years around mode shift from cars to walking and cycling, and whether Auckland’s housing densification plans are sufficient.

We talked through the particular sets of skills and attributes of Collins and Brown to be Mayor. The long story short: Brown, 76, has a combative and reactionary approach that is less likely to build the necessary agreements on those issues above with fellow councillors and the Government than Collins, 48, who is a two-term councillor.

For more reading on this issue, here’s all of Simon’s articles via NZ Herald-$$$ on the election campaign, including this piece on Wayne Brown and this piece on Efeso Collins.

I spoke with Efeso Collins in this podcast recorded on Monday. Wayne Brown declined a request for an interview with me earlier in the campaign.

Ka kite ano

Bernard

TLDR: This week the financial and geo-political outlooks darkened in Britain and northern Europe after Britain’s plans for unfunded tax cuts were trashed by financial markets and sabotage of gas pipelines in the Baltic Sea aggravated tensions between NATO and Russia.

Closer to home, National’s leaders Christopher Luxon and Nicola Willis were forced to deny their tax cuts were similar to Britain’s disastrous plans and postal voting in council elections got off to a slow start, prompting suggestions they should be run in future by the Electoral Commission in similar ways to the General Election.

In the podcast above of Friday evening’s ‘hoon’ webinar for paying subscribers, co-host Peter Bale and myself talked about the news of the week in geo-politics and Aotearoa-NZ’s political economy with the University of Otago’s Robert Patman, including:

* The Bank of England’s intervention to promise to print at least £65b to stop Britain’s £1.5t pension sector from collapsing under the weight of billions of pounds of margin calls from the use of a new derivative tool called Liability Driven Instruments (LDIs);

* the LDIs were triggered by the fastest ever rise in British bond yields because new PM Liz Truss and new Chancellor of the Exchequer Kwasi Kwarteng promised £45b of unfunded tax cuts, most of which will go to the richest taxpayers;

* the turmoil on global financial markets saw the NZ dollar fall to a 14 year low of 56 USc, complicating the inflation-fighting job of the Reserve Bank, which is expected to hike the Official Cash Rate again next Wednesday at 2pm by 50 basis points to 3.5%;

* the mysterious explosions under the Baltic Sea that destroyed the Nordstream 1 and 2 gas pipelines from Russia to Europe, which Danish authorities have said was caused by sabotage with 500kg of TNT;

* without formally accusing Russia of the sabotage, NATO pledged to defend Europe’s infrastructure with concerted military action;

* Russia’s deputy head of security said he thought Russia would be able to get away with nuking Ukraine because NATO was afraid of retaliation;

* surveys of the confidence of consumers, employees and businesses in Aotearoa-NZ found improvements in the September quarter as mask restrictions were lifted and tourists and working holiday makers began returning; and,

* a political opinion poll showed National-ACT in a position to govern alone (just) if the election was held now, with another survey showing the net approval ratings of Christopher Luxon and Jacinda Ardern were neck and neck.

Here’s Peter Bale’s weekly email on world affairs as a primer.

An update from the podcast: Robert Patman talked on Friday night about the potential fall of the key city of Lyman in the Donetsk province of Ukraine. Since then, Russia’s troops have indeed pulled out of the strategic city.

Ka kite ano

Bernard

TLDR: This week The Kākā had its first anniversary as a paid subscription email newsletter and podcast. We marked the occasion at midday for an hour on Friday by having a special ‘hoon’ webinar for all subscribers to discuss the events of the week in geo-politics and Aotearoa-NZ.

Popular special guests Professor Robert Patman from the University of Otago, ANZ Chief Economist Sharon Zollner and Dominion Post columnist Josie Pagani joined myself and Hoon co-host Peter Bale to discuss some monumental events in geo-politics and the global economy, and what they might mean for our political economy.

We talked about:

* Vladimir Putin’s announcement of the mobilisation of 300,000 reservists and subsequent street protests in Russia, along with attempts by potential draftees to flee the country;

* Putin’s barely disguised threat to use tactical nuclear weapons to defend the ‘motherland’ of Russia, which will shortly include the areas of Ukraine annexed by Russia and where referendums to confirm that will shortly be held;

* the West’s strong and mostly united reaction rejecting the annexation and nuclear threat at the United Nations General Assembly (UNGA), where PM Jacinda Ardern gave this speech on Friday night;

* some signs of division in support for Ukraine bubbling in Europe, including in the Putin-backed Hungary and in Italy, where an election this weekend is expected to deliver a right-wing Government seen as more sympathetic to Russia;

* the US Federal Reserve’s ‘jumbo’ 75 basis point rate hike to a range of 3.0% to 3.25% and Chairman Jerome Powell’s hawkish rhetoric about the need to clamp down on inflation with interest rates over 4% for a couple of years;

* the Bank of Japan’s vow to keep printing to keep its interest rates low, and its subsequent need to intervene to stop the yen falling late on Thursday, which was the first such currency market intervention by a major central bank since 1998;

* the new Liz Truss-led UK Government’s plan to borrow to fund massive tax cuts for higher income earners and companies, which it subsequently confirmed yesterday with a plan to borrow £234b to pay for £150b of winter energy subsidies and £45b of tax cuts;

* new polling showing voters in democracies want to tax wages less and wealth more, as Josie Pagani detailed in her column yesterday;

* signs consumers in Aotearoa-NZ are not rolling over and tightening their belts under the weight of higher interest rates, which Sharon Zollner said might require our Reserve Bank to hike higher than the 4.75% peak she had previously forecast; and,

* why voters in western democracies want more of their tax money spent at local levels, and how difficult that is in Aotearoa-NZ where the central Government doesn’t share tax revenues with councils.

Five things of note this week

‘You can’t go out much, and we order you to go up’

The Government ordered councils not to allow greenfields housing developments to sprawl out into highly productive farmlands, but also wants councils to open up more land for housing. I argued these two things weren’t credibly consistent with the current approach to funding infrastructure and winning the political battles needed for housing to grow ‘up’ instead of ‘out.’

They could be if the Government also provided the financial incentives and released the debt funding shackles on itself and councils that would enable much, much more brownfields ‘densification’ of housing. Instead, the Government is simply ordering councils to allow more densification, without adequately funding the public transport or allowing for the NIMBY-fueled political backlash that is now consuming councils from the political ground up. It is magical thinking of the highest order.

This creates an awful Catch 22. Not allowing councils to build ‘out’ or helping them much to build ‘up’ is a recipe for yet more land price appreciation captured by today’s land owners. This comes at the expense of future renters locked out of the home ownership they need to build stable families and finances, and keeps them paying the world’s most expensive rents. Here’s my full article from Monday.

The densification backlash went mainstream

Earlier this month, the Christchurch City Council refused to submit an updated plan that allowed the three-storey townhouses on all sections, as ordered by the central Government after a bipartisan ‘Townhouse Nation’ deal late last year. Outgoing Mayor and former Labour minister Liane Dalziel wrote to Environment Minister David Parker to protest against the ‘one size fits all’ approach and call for a more ‘bespoke’ approach.

I asked Parker if the Government was considering legal action to force the Council to adopt the new rules, or could even appoint Commissioners. He declined comment because he said he yet to receive legal advice.

Here’s Dalziel’s argument (bolding mine):

“We are supportive of the Government’s aims to address housing shortages and enable the delivery of a wider range of housing options. However, a blanket rule change is not necessary here. We have an ample supply of places available where people can subdivide to create more housing and where no resource consent is required.” Liane Dalziel’s plea to the Labour Government.

My view: There is not ample supply of land available in Christchurch, otherwise housing would be affordable. Truly elastic land supply would allow developers to build in response to the recent surge in prices and push prices back down in response with a new housing supply surge. That has not and is not happening, as well demonstrated in this speech from Treasury Chief Economist Dominick Stephens, which is in turn based on this deep research note on housing costs by the Housing Technical Working Group, which includes Treasury, the Reserve Bank, and HUD.

‘We’re really serious this time’

The US Federal Reserve hiked its key interest rate by 75 basis points for a third consecutive time and forecast significantly higher interest rates for another couple of years to try to win back its reputation for keeping inflation low.

The very hawkish view of the world’s most important central bank is now much tougher than most investors, traders and economists think. Global stocks fell sharply.

Someone is wrong and this could get ugly because global asset prices, and that includes the most expensive residential land in the world in Aotearoa-NZ, are based on lower interest rates sooner and for longer than the Fed is now saying. This morning the Fed forecast quite high rates for quite a bit longer.

Is it safe to come out now?

Spring is in the process of springing in the housing market for first home buyers, thanks to strong income growth, low unemployment, lower prices and early signs mortgage rates have peaked.

FOOP (Fear Of Over Paying) is about to flip back to FOMO, unless global central banks pull the rug out from under the market heading into summer with big new rate hikes to beat down un-cooperatively high inflation rates. See more detail here in my Thursday email detailing signs that first home buyers and some investors are nudging back into the market.

Another captured state

Liz Truss’ extraordinary embrace of Reagan-style supply-side economic theories that are now widely debunked from people as conventional as the IMF stood out this week. It is another case where the populist leaders of a democracy win power and then promptly cut taxes in a way that makes their wealthy backers vastly wealthier.

The brazenness and cravenness is something to behold. Now even financial markets are calling out the economic lunacy of tax cuts paid for with borrowing. The bond vigilantes stirred back into life this week and drove British ‘gilt’ bond yields higher in the biggest and fastest way in modern history.

Quotes of the week

‘I’m not bluffing’

“To those who allow themselves such statements regarding Russia, I want to remind you that our country also has various means of destruction, and for separate components and more modern than those of Nato countries and when the territorial integrity of our country is threatened, to protect Russia and our people, we will certainly use all the means at our disposal. It’s not a bluff.” Vladimir Putin in a presidential address, via The Guardian

‘I’m also not bluffing’

“We have got to get inflation behind us. I wish there were a painless way to do that. There isn’t.” US Federal Reserve Chair Jerome Powell in a news conference on Thursday, via PBS.

‘I think trickle down will work this time’

“I don’t accept this argument that cutting taxes is somehow unfair. People on higher incomes generally pay more tax, so when you reduce taxes, there is often a disproportionate benefit because those people pay more taxes in the first place.” UK PM Liz Truss this week, via CNBC

‘Trickle-down has been tried and failed’

“I am sick and tired of trickle-down economics. It has never worked. We're building an economy from the bottom up and middle out.” US President Joe Biden in a tweet a day before meeting Truss.

Ka kite ano

Bernard

TLDR: The podcast above is a recording of our Weekly ‘Hoon’ webinar for paying subscribers. We do this every Friday for an hour at 5pm and it’s one of our most popular features, along with my Ask Me Anything session from midday on a Friday. Yesterday’s was a cracker.

This week’s guests on the ‘hoon’ were University of Otago Foreign Relations Professor Robert Patman and Kiwibank Chief Economist Jarrod Kerr.

This week I was in the Parliamentary Press Gallery in Whanganui-a-tara and co-host Peter Bale joined us from Tamaki Makaurau.

The five things of note I’ve focused this week included:

* Christchurch City Council voting against the Government’s densification directives and doubling down by promising to charge developers extra if they don’t have enough trees;

* the Government completely dumping the ‘traffic lights’ system of Covid controls, including vaccine mandates and mask mandates, but not seven-day isolation for Covid sufferers;

* REINZ figures showing Auckland City and Wellington City house prices down 17-23% from the peak in October/November, but with signs the market is warming up again in Auckland in particular;

* Wellington City Council voting to limit speeds on most city streets to 30 km/hr, triggering accusations of being ‘anti-car’ as voting papers are mailed to potential council voters; and,

* an inflationary surprise in the United States unnerving investors hoping the Fed won’t have to crunch the global economy into a recession with sharply higher interest rates.

But also overseas:

* Ukraine’s amazing counter-offensive that drove Russian troops out of 6,000 square kilometres of eastern and southern Ukraine, and have sparked the glimmerings of dissent in Russia;

* Vladimir Putin met with Xi Jinping overnight and Putin reported Xi was not thrilled with his invasion of Ukraine; and,

* Europe announced windfall taxes on energy firms.

Here’s Peter’s always excellent weekly bulletin email on international affairs that goes out on a Thursday via the Spinoff. Sign up here

I also started the Substack ‘threads’ trial on the Substack iOs app.

Chart of the week

ANZ lifted its OCR forecast peak to 4.75% from 4%

Quote of the week

“We’re making Earth our only shareholder.” Patagonia founder Yvon Chouinard said while announcing he and his family had given the company to two trusts dedicated to fighting the climate crisis.

Other places I’ve been

A fun thing. I want one.

Mā te wā

Bernard

TLDR: In this week’s ‘hoon’ webinar in podcast form above, Peter Bale and myself invited on ANZ Chief Economist Sharon Zollner and talked about:

* Europe’s energy crisis and how Governments were intervening in markets to impose windfall taxes and pay hundreds of billions in energy subsidies to households;

* the European Central Bank’s biggest rate hike in 24 years and why this meant Peter would finally get some interest on his euro deposits;

* what the election of Liz Truss means for Britain’s debt and taxes;

* Sharon’s view house prices may not fall as much as previously thought; and,

* Emmanuel Macron’s speech about the ‘end of the age of abundance’.

We also briefly talked about the Queen’s passing, including Peter’s recollections from meeting her a couple of times. The podcast above is available for all paying and free subscribers as part of this weekly sampler email. Subscribe in full to support my public interest journalism on housing affordability, climate change and child poverty and to join our community debating these issues daily.

My Five Things to note this week

Our housing crisis writ large in Rotorua

TVNZ’s Sunday programme (below) aired a startling documentary exposing bullying of homeless people in Rotorua motels by a charity with unlicensed security guards with gang connections. Opposition parties called for an inquiry. The Government said it hadn’t found anything untoward.

The exposure of the ‘Golden Mile’ highlights again the failure of 30 years of infrastructure under-investment allied with a structural taxation bias in favour of residential property. The Government, like the last one, is now scrambling with short term solutions, but won’t address the core issue:

* our taxes and infrastructure investment rates are too low;

* we don’t tax capital gains or wealth, unlike every other developed country; and,

* there is no immediate political prospect to break this log jam, largely because home-owning median voters like it just the way it is, until they see the end results of child poverty, social dysfunction and rising welfare costs in their faces every day.

The immediate solution is to push the social problems ‘somewhere else.’ That somewhere else in the middle of the North Island is Rotorua. The same ‘Golden Miles’ are in place in many provincial cities up and down the country.

Here’s my weekly ‘When the Facts Changes’ podcast via The Spinoff talking about the housing supply issues with Kiwibank economist Jeremy Couchman, and the Golden Mile documentary below that.

Europe intervenes massively in energy markets

Faced with Vladimir Putin’s act of economic warfare of cutting off their gas supplies completely, European governments are intervening massively in markets to impose price caps and redistribute profits and resources from asset owners to households, or to simply park the cost as public debt and let the owners reap the rewards from more taxpayer-funded bailouts.

European Union countries this week announced plans to imposing windfall taxes on the winners from exploding wholesale gas and electricity prices in order to pay over €500b euros in subsidies to households so they can afford to pay their gas and power bills this winter.

Britain’s new PM Liz Truss announced plans to borrow over £150b to freeze household energy bills. She also announced Britain would start fracking for gas and remove its energy levies designed to reduce climate emissions. She is effectively paying taxpayers’ money to fund profits and cash returns for the energy companies on the right side of the price spikes, and to rescue those on the wrong side.

Europe is now re-organising parts of its economy for a long war, which means pivoting production for war aims and imposing the sorts of rationing and price caps used in war. The video below that emerged this week of French President Emmanuel Macron’s first call with former comedic actor and now Ukraine President Volodymyr Zelensky on the first night of the war is remarkable. It introduces the phrase ‘total war’ to the conversation.

Europe scrambling to contain inflation headed for 10%

The European Central Bank hiked its main interest rates by the most in the 24 year history of the euro this week. It is battling inflation that is headed for 10% across the continent and faces the prospect of a recession later this year at the same time as double-digit inflation.

Europe’s other problem is it hasn’t yet matched its single monetary policy and currency with a single Government or fiscal policy. It means the ECB has ended up printing money to buy Greek, Italian and Spanish bonds to contain their interest rates, which would normally be much higher because their Governments have higher debts than the rest of Europe. Rising interest rates and the stresses of the winter will put this fundamental weak point in the global economy under enormous financial and political pressure in the months to come.

Vladimir Putin may be losing on the battlefields of Ukraine, but his acts of economic warfare on Ukraine’s immediate suppliers of support and arms is having an extraordinary effect. As Peter points out in the podcast above, Italy’s leaders are now openly talking about trying to negotiate with Putin to resume gas supplies.

We talk about Europe’s economic and political woes with Sharon in the podcast above, as well as whether the US Federal Reserve will win its battle of wills with markets. The Fed reiterated again this week it is very determined to squeeze the US economy with rate hikes until the pips squeak to beat down inflation, while markets see inflation solving itself and the Fed eventually relenting so asset prices can stay high.

Underlying all these problems is the very live issue of whether central banks can maintain their independence in the face of political pressure to solve Government debt and economic growth problems by just inflating away the debt.

‘The end of the age of abundance’

On August 24, Macron gave a sobering short speech to his first post-summer cabinet meeting on what faced them. In the process, he became the first world leader to openly talk about ‘de-growth.’ This is the idea that the planet is hitting its physical limits and the task now is to manage a decline in GDP and a redistribution of resources to stop the earth from cooking and dissolving into a Mad Max-style hellscape of wars over energy and water.

Here’s what he said:

“What we are currently living through is a kind of major tipping point or a great upheaval … we are living the end of what could have seemed an era of abundance … the end of the abundance of products of technologies that seemed always available … the end of the abundance of land and materials including water.

“This overview that I’m giving, the end of abundance, the end of insouciance, the end of assumptions – it’s ultimately a tipping point that we are going through that can lead our citizens to feel a lot of anxiety. Faced with this, we have a duty, duties, the first of which is to speak frankly and clearly without doom-mongering.” Emmanuel Macron talking to his cabinet. Guardian

I wrote a piece on Wednesday about how 30 years of magical thinking had led us to this point. Here’s the guts of it.

This magical thinking says voters in a property-owners’ democracy can have:

* low taxes, low debt, low interest rates and rising asset prices into infinity;

* without having to invest much in repairing or preventing the damage to the environment, or in new technology to use energy more efficiently;

* or having to invest in affordable housing or transport for the generations of youth sentenced to live as renters on precarious wages for decades to come;

* or don’t have to worry about election revolts from those unborn generations who will have to pay both rent and taxes for the publicly-funded pension and healthcare costs for today’s asset owners;

* that democracies can easily survive the social stresses and lower economic growth rates caused by widening inequality, over-consumption of physical assets without paying for externalities, and unaddressed climate change; and,

* that autocracies competing for those resources with democracies will not take advantage of this dysfunction to protect and grow their own share of those resources.

The bottom bottom line - None of this really computes in the long run and it’s beginning not to compute in the short run either as climate change accelerates into growth-sapping events in the near-to-now future.

For example, just overnight:

* offices closed and data centres were flooded in the global outsourcing capital of Bangalore after record-setting torrential rains allied with poor water infrastructure investment; (ABC)

* California, the world’s fifth biggest economy, is in severe drought and faces power blackouts and water shortages because of climate change Reuters;

* a third of Pakistan, which is being bailed out by the IMF, is under water and it’s trying to widen a breach in its biggest lake to avoid it overflowing even more Reuters; and,

* Shenzen, the globalised supply chain’s component assembly centre, is locked down with a disease (Covid) initially transmitted zoonotically on a planet that transmits more diseases zoonotically as it warms Reuters.

The unpriced-and-unpaid-for externalities generated by over-consumption, under-investment and deliberately widening inequality over the last 30 years appear to be coming together in a poly-crisis moment. The bill feels as if it’s coming due all at once in a series of climate events and wars that accelerate each other into a series of feedback loops into yet more crises.

Covid restrictions are ending here too

Our Cabinet will meet on Monday and is expected to let Aotearoa-NZ’s remaining Covid restrictions on mask use lapse by the end of the week as case numbers and intensive care occupancy rates head back to February levels.

Marc Daalder from Newsroom wrote a strong commentary piece on this prospect:

This would be a foolhardy move, when even the Government's own variant plan spells out an uncertain future of recurring pandemic waves which represent "a substantial increase in the overall burden of disease".

The fortunate situation we find ourselves in is unlikely to last forever. New variants could push baseline case numbers to levels where masks and other protections are still warranted, as happened after the first Omicron peak.

New variants and rapidly waning immunity will also fuel new waves, necessitating the imposition of more stringent but short-lived health measures to flatten the curve and dampen transmission.

The problem is that, with no framework like the traffic lights or alert levels to enable the reintroduction of protections on either a semi-permanent or temporary basis, the Government simply won't. We'll all suffer a much higher burden of disease and death for that failure. Marc Daalder via Newsroom.

Have a great weekend.

Ka kite ano

PS: My apologies to subscribers and Peter who dialled into this week’s live ‘hoon’ webinar. I was a few minutes late due to a scooter battery issue. I would not do well in Mad Max world.

TLDR: This week on the weekly hoon webinar, we talked about the Government’s GST U-turn, the likely election of Liz Truss as UK PM, Ukraine’s counter-attack in Ukraine, and National’s relaxed reaction to a UN report on China’s oppression of Uighurs.

I’m keeping this short this week as I’ve been focused on getting out my interview with Adrian Orr earlier this morning.

The audio from the webinar on Friday night for paying customers is in the podcast above for all subscribers.

TLDR: The five signals I picked out from the noise this week were:

The Fed scared markets a bit

US Federal Reserve Chair Jerome Powell said in his hotly-anticipated speech at Jackson Hole at 2am this morning that the Fed must keep hiking interest rates “until the job is done,” which would probably lower economic growth for “a sustained period.” This was seen as tougher than traders and investors had expected so the S&P 500 fell 3% by 10 am. The 2-year Treasury bond yield, which is the one fixed mortgage borrowers here in Aotearoa-NZ should watch, rose only 3 basis points to 2.07%. The 10-year yield rose just 1 basis point to 3.03%.

So what? - Clearly Powell’s hawkishness has unnerved share investors a bit, but bond investors, who are the ones who forecast inflation and interest rates for a living, were more relaxed. The bond market moves were not enough on their own to force big moves up in our fixed mortgage rates, but our stocks are likely to fall a bit on Monday morning. Meh.

Europe’s gas shock deepened

European gas prices jumped another 10% overnight to a fresh record-high over €343 per megawatt hour because of fear Russia will turn off its gas completely. This is more than ten times pre-war prices. Heating bills in Europe in the coming winter will be brutal and the political pain of Europe’s support for Ukraine is deepening. Putin is applying the screws hard.

This chart from Capital Economics this week shows just how serious the shock is for Europe.

The 20% fall in house prices won’t wipe out many at all

Some people are worried a lot of recent first home buyers will be wiped out by the 20% fall in house prices that is now rippling out from Auckland and Wellington. I wrote in Wednesday’s email about why very few people are likely to lose their houses and deposits. As in less than 10. I was then invited on to 1News’ Breakfast show to talk about it and on RNZ’s The Panel on Friday.

Climate Change is hitting the economy from all directions

Climate change feedback loops hammered the global economy this week, adding to the inflationary and recessionary pain of Covid and the war in Ukraine. Europe’s drought was declared the worst in 500 years as German and French factories hit by higher electricity costs reported output in recessionary territory.

Meanwhile, China closed shopping centres, turned off light displays and ordered factory closures because of hydro-electric power shortages from the worst drought it has experienced in 50 years.

That water seemed to head straight for us in an extension of the ‘Atmospheric River’ that caused extensive damage in Nelson and Marlborough this week. I wrote in Tuesday’s email about how these climate changes are affecting our economy.

Migration settings are being loosened

I wrote in Monday’s email about how the Labour Government was loosening migration settings and in Tuesday’s email I wrote about how this loosening reinforced that all roads towards a real improvement in investment and productivity would lead to an annual levy or tax on residential land values.

I hosted our weekly live ‘hoon’ webinar for over 100 paying subscribers on Friday night to talk about these events of the week. The audio from the webinar is in the podcast above for all subscribers immediately as part of this weekly summary and sampler of the week’s news and my work this week on The Kaka.

We talked about:

* why a 20% fall in house prices isn’t too big a problem for NZ Inc;

* how consumers are feeling about spending (a bit better), even those with mortgages;

* why all roads lead to a tax or levy on residential land values;

* how accelerating climate change is shunting the global economy around;

* why Labour’s loosening of migration settings shows how hard it is to kick our economy’s basic business model; and,

* what might happen next with inflation, interest rates, asset prices and jobs markets.

TLDR: The five signals I picked out from the noise this week were:

* Reserve Bank Governor Adrian Orr’s second term is hanging in the balance as he scrambles to drag inflation down and have some sort of outside review before March;

* A call from the Human Rights Commissioner for a rent freeze and an increase in the accommodation supplement exposed again the Government’s lack of a housing affordability target to hold it accountable;

* Fresh emissions reductions commitments without funded investment plans from the Auckland and Wellington City Councils exposed again the performative nature and magical thinking behind central and local Government climate pledges;

* China eased monetary policy after surprisingly weak factory output and consumer spending figures for July, adding to the recessionary forces building in the global economy that are expected to drag inflation lower later this year.

* China increased subsidies for coal-fired power stations to offset lower hydro-power output caused by climate-change-driven droughts, showing how hard it is for even the last democratic emitters to avoid short term-thinking to solve a long term problem.

I co-hosted our weekly live ‘hoon’ webinar for over 100 paying subscribers with Peter Bale at 5pm on Friday night to talk about these events of the week and others with special guest Raf Manji, who is the leader of The Opportunities Party. The audio from the webinar is in the podcast above for all subscribers immediately as part of this weekly summary and sampler of the week’s news and my work this week on The Kaka.

In particular, we talked about

* The Reserve Bank’s rate hike and the challenges it faces reassuring politicians and voters that it needs to remain independent;

* the threat to local democracy from the slate of Voices For Freedom candidates in this year’s council elections;

* the risks of a new Chernobyl-style nuclear catastrophe at the Zaporizhzhia power plant in Ukraine;

* TOP’s proposal for a residential land value tax.

A reminder to free subscribers reading here that we have a special $30 a year deal for under 30s and anyone on a benefit. We also have a new special $65 a year deal for over 65s who are renting and reliant on NZ Superannuation. Any students, teachers and staff who signs up to the free tier with a .school.nz or .ac.nz email address will also be comped up to the full paid tier for free.

This week’s five signals from the noise

Adrian Orr refused to say if he wanted a second term

The Reserve Bank hiked the Official Cash Rate by 50 basis points to 3.0% as expected on Wednesday and forecast it would raise it to around 4.0% by the end of the year. That didn’t surprise anyone in financial markets or change fixed mortgage rates.

The hottest questions at the news conference with the quarterly August Monetary Policy Statement were around the criticism of the Reserve Bank’s performance and whether Governor Adrian Orr wanted a second term. His current five-year term expires at the end of March and a second-term would potentially see him having to serve under a Government run by National and ACT, both of whom have been sharply critical of the bank and Orr.

Orr refused to say whether he wanted a second term, even though Finance Minister Grant Robertson has expressed confidence in him and has said he is working with the Reserve Bank board on the details of the reappointment. National has called for an independent inquiry into the bank’s performance before any decision on Orr’s reappointment.

Orr used the news conference to frame an ongoing Reserve Bank-commissioned review of the central bank’s operation of monetary policy as enough of a review. In particular, he pointed to a part of the review being done by independent overseas experts, former Reserve Bank of Australia monetary policy board member (2001-2011) Warwick McKibbin and former Bank of Canada Deputy Governor Larry Schembri (2013-2022). Here’s my fuller report and analysis in Thursday’s Dawn Chorus.

Where’s the affordability target?

Human Rights Commissioner Paul Hunt called this week for a new rent freeze and an increase in the Accommodation Supplement. Housing Minister Megan Woods responded with a list of the Government’s actions to increase housing supply and reduce demand from rental property investors.

I focused in Wednesday’s Dawn Chorus on why the Government’s failure to identify a house-owning and rental affordability target (something like three times income for owning and 30% of disposable income for renting) makes that list a pointless exercise because its impact cannot be measured or the Government held accountable.

Who do they think they’re kidding?

Auckland Council agreed this week to a Transport Emissions Reduction Pathway that reduces climate emissions by 64% by 2030. The plan requires:

* a 10-fold increase in walking, cycling and scooter use;

* a six-fold increase in bus, ferry and train use;

* EVs to be responsible for 32% of total vehicle kilometres travelled by 2030; and,

* reductions in freight emissions of 45% by 2030, aviation emissions reductions of 50% by 2030 and shipping emissions reduction of 50% by 2030.

Two things are required to make this work: congestion charging and an awful lot of new central Government funding, neither of which have been agreed. These are easy things for an outgoing Mayor and a bunch of councillors to say with a couple of months left on their term.

China’s economy is slowing fast, which will help reduce inflation

China’s central bank eased monetary policy unexpectedly this week after the world’s second largest economy reported factory production fell and consumer spending growth was weaker than expected because of Covid lockdowns and cooling demand for exports.

Along with easing economic growth in the United States and Europe, China’s slowdown is taking pressure off inflation and encouraging financial markets to think the US Federal Reserve will have to start cutting interest rates next year. The Fed is not saying that though, potentially creating a dangerous gap between market expectations and central bank actions.

China lifts coal subsidies to offset climate-caused cuts in hydro-power

I wrote in Friday’s Dawn Chorus about China’s decision to increase subsidies for coal-fired power plants to help them cope with electricity shortages because of a drought in China’s south-western province of Sichuan.

China is doing what most of the world is doing right now in the face of intense short term financial and climate pain. It is turning to the short-term tools it has to deal with the short-term pain, even though it knows it will make the long-term problem of climate change worse in the long-term. Politicians, even the ones in undemocratic dictatorships, are afraid of the short-term consequences of unhappy voters and citizens having to cope with short-term pain.

Ka kite ano

Bernard

TLDR: The five signals I picked out from the noise this week were:

* China only rattled its sabres in the Taiwan Strait;

* There was no inflation in the United States in July;

* House prices are bottoming out in Auckland City and Wellington City;

* Christopher Luxon failed his first candidate selection test; and,

* An Auditor General’s report exposed Three Waters’ democratic deficit.

I co-hosted our weekly live ‘hoon’ webinar for over 100 paying subscribers with Peter Bale at 5pm last night to talk about these events of the week and others with special guests University of Victoria Foreign Affairs Associate Professor Jason Young to talk about. The audio from the webinar is in the podcast above for all subscribers immediately as part of this weekly summary and sampler of the week’s news and my work this week on The Kaka. It usually goes out every Saturday morning for your weekend reading and listening pleasure.

In particular, we talked about

* a proposed select committee inquiry into the Government’s financial response to Covid and how Labour’s rejection of it shows the weaknesses of our limited democratic protections;

* the Government’s Reshaping Streets proposal to encourage the swapping of cars for walking and cycling, which National has called a ‘war against cars’; and,

* China’s angry (but so far not destructive) military response to Nancy Pelosi’s visit to Taiwan, and the intensifying conflict in Ukraine.

This is my weekly summary and sampler of the news of the week on The Kākā for both free and paid subscribers. The public interest journalism I do daily on housing unaffordability, climate change inaction and poverty reduction is possible with the support of paid subscribers. Join our community by subscribing in full.

A reminder to free subscribers reading here that we have a special $30 a year deal for under 30s and anyone on a benefit. We also have a new special $65 a year deal for over 65s who are renting and reliant on NZ Superannuation. Any students, teachers and staff who signs up to the free tier with a .school.nz or .ac.nz email address will also be comped up to the full paid tier for free.

This week’s five signals from the noise

Luckily, China only rattled its sabres in the Taiwan Strait

China reacted angrily to last week’s visit to Taiwan by US Speaker of the House of Representatives, Nancy Pelosi, by staging its most intense series of drills, test missile firings and naval manoeuvres in the Taiwan Strait in almost 30 years. Chinese fighter jets, bombers and warships repeatedly crossed the median line between China and Taiwan and probed its defences. China also fired ballistic missiles over Taiwan and into the seas near Japan.

But the United States was careful not to send its carrier group nearby into the Taiwan Strait and, somehow, these drills and counter-drills passed by without any accidents or actual clashes. We all dodged a big bullet. China declared the exercises over this week, avoiding the prospect of a full blockade of shipping or air traffic in this key pathway for much of the world’s shipping.

Aotearoa-NZ also managed to avoid further inflaming China by calling only for diplomatic moves to de-escalate tensions. Our public comments were less openly supportive of Pelosi’s move and Taiwan than Australia’s. China’s diplomats said this had set back efforts to warm relations with Australia’s new Labor Government, which had initially improved since its election in May.

“I think my personal understanding is that once Taiwan is reunited, coming back to the motherland, there might be a process for the people in Taiwan to have a correct understanding of China about the motherland.” China’s ambassador to Australia, Xiao Qian, speaking at the National Press Club in Canberra, where he said there was no room for China to compromise on Taiwan and suggested re-education for Taiwan’s people after reunification. The Guardian

There was no inflation in July in the United States

The Consumer Price Index in the world’s biggest economy was flat in the month of July and the annual US inflation rate fell to 8.5% from 9.1% in June. This data released on Wednesday night was lower than expected and sparked rallies on stock and bond markets as investors hoped it meant the pain of higher interest rates would be not need to be quite so painful.

This was a big deal in the global economy and reinforced the hopes of those in ‘Team Transition’, including me, that global inflationary pressures have peaked and central banks won’t have to hike short term interest rates too much to get inflation back down to around 2% in the next couple of years.

I wrote in depth about this in Thursday’s Dawn Chorus, which included my podcast version that talked through the underlying reasons why disinflationary forces would eventually overwhelm the inflationary spikes of 2021 and 2022.

House prices are bottoming out in Auckland City and Wellington City

The Real Estate Institute of New Zealand (REINZ) published its sales data for July on Thursday, which was reported more broadly as showing a housing market in virtual free-fall mode. The slightly panicky tone of the coverage elsewhere suggested the figures were just the beginning of a slide that could turn uglier.

Actually, I think they showed the beginning of the end of a 15-20% fall in house prices nationally this year from their peaks in October and November of last year. Prices have begun bottoming out in the ‘bleeding edges’ of the market in central Auckland and Wellington. Prices in Auckland City are now down 17.2% from their November peak and Wellington City prices are now down 18.8% from their October peak, although they bounced 2.4% in July from June. Wellington City’s peak-to-trough fall was 20.1%. The rest of the country is still catching up.

Interest rates have stopped rising, migration is restarting and many investors are becoming more hopeful of a change of Government late next year, which would see interest serviceability, ring-fencing and bright-line taxes repealed, along with a softening of expensive rules forcing landlords to make homes warmer. I wrote in depth in Friday’s Dawn Chorus about why we’re likely to see a rebound from late 2023.

Christopher Luxon’s failed his first candidate selection test

Late on Monday afternoon Kirsty Johnston reported via Stuff that new National MP for Tauranga, Sam Uffindell, violently assaulted a fellow Kings College boarding school student in 1999. The former banker had apologised to the victim last year before standing in the by-election to replace Simon Bridges in the safe seat. Uffindell also told the selection committee about the assault and apology, but the committee including then President Peter Goodfellow, new President Sylvia Young and senior MP Todd Barclay, chose not to tell National’s delegates selecting the candidate or Luxon. Barclay told staffers in Luxon’s office, but they didn’t tell Luxon, Luxon said.

Luxon initially defended Uffindell to the hilt as a ‘changed man’ all through interviews and standups on Tuesday, until new allegations of bullying and flat-trashing emerged that evening via RNZ. Luxon then suspended Uffindell via email at 11.21 and set up a two-week inquiry by QC Maria Dew.

I wrote in Tuesday’s Dawn Chorus about Christopher Luxon’s failure to choose a good candidate at his first attempt under reformed selection rules, and the problems he now has with the National Party outside Parliament, given Peter Goodfellow remains a board member and Sylvia Young was Goodfellow’s pick and now President.

"I'm very confident we'll get a great candidate in Tauranga - we've got a great local organisation, and they'll have a great selection I'm sure." Christopher Luxon on March 24 rolling out a new selection process called 'National 101' to get better candidates for Parliament.

“He’s going to bring something really different to our caucus and some diversity to it in that in that he’s really well educated, he’s had a local and international finance background, he’s a local agribusiness owner, and he’s a very committed family man from Tauranga who can advocate well for those local issues, so that’s what we wanted, so I’m really excited about what he’s going to be able to bring to our party.” Luxon describes Uffindell when asked about a lack of diversity in candidate selection by Waatea News on May 2.

“Sam is a good candidate and is a high integrity person and he's got good character.” Luxon at 10.20am on Tuesday after learning about the first revelations about Uffindell’s violent assault in 1999 and admitting being a bully as a young man, as well as his decision not to reveal it to voters, delegates or Luxon.

"We've had an MP involved in completely unacceptable and unlawful behaviour.” Luxon at 11.20pm on Tuesday in a statement suspending Uffindell after new allegations emerged.

The Auditor General exposed Three Waters’ democratic deficit

Auditor General John Ryan lobbed his submission on the Water Services Entities Bill into the Parliamentary Select Committee process on Monday, including unusually sharp criticism of the Three Waters reforms.

Ryan skewered the lack of accountability that Three Waters is creating in its attempt to solve Aotearoa-NZ’s existential infrastructure funding blockage. The too-clever-for-its-own-good nature of Three Waters finally caught up with it and sank its teeth into its own rear.

I wrote in Tuesday’s Dawn Chorus about how the Labour Government’s attempt with Three Waters’ to quietly solve Aotearoa-NZ’s fundamental infrastructure financing problem had backfired, largely because not being crystal clear about the need for higher taxes and debts had allowed others to insert co-governance into the vacuum left by that vagueness.

“I am concerned about whether these mechanisms will be sufficient, individually or collectively, to enable comprehensive and effective public scrutiny and accountability.” John Ryan in the submission.

Ka kite ano

Bernard

The podcast above of the weekly ‘Hoon’ webinar for paying subscribers on Thursday night features co-hosts Bernard Hickey & Peter Bale talking about the week’s news with regular and special guests, including:

* Robert Patman on the week in geopolitics, including Donald Trump’s wrecking of the post-WW II political landscape; and

* Health Coalition Aotearoa co-chair Lisa Te Morenga on school lunches and bowel cancer screening.

The Hoon’s podcast version above was recorded on Thursday night during a live webinar for over 200 paying subscribers and was produced and edited by Simon Josey.

The Hoon won the silver award for best current affairs podcast in this year’s New Zealand Podcast awards.

(This is a sampler for all free subscribers and anyone else who stumbles on it. Thanks to the support of paying subscribers here, we’re able to spread my public interest journalism here about housing affordability, climate change and poverty reduction other public venues. Join the community supporting and contributing to this work with your ideas, feedback and comments, and by subscribing in full. Remember, all students and teachers who sign up for the free version with their .ac.nz and .school.nz email accounts are automatically upgraded to the paid version for free. Also, here’s a couple of special offers: $3/month or $30/year for under 30s & $6.50/month or $65/year for over 65s who rent.)

Ngā mihi nui.

Bernard

TLDR: This week, National called for an independent review of the Reserve Bank’s unleashing of a ‘tidal wave of cash’ during Covid after a former Governor joined a chorus of critics, which Finance Minister Grant Robertson dismissed as ‘hindsight economics’.

Also in the news in global geo-politics and our political economy:

* China warned the United States it was ‘playing with fire’ by planning to send House Speaker Nancy Pelosi to Taiwan;

* Russia halved its gas supplies to Europe, forcing it to plan voluntary consumption cuts of 15% that economists see as recessionary;

* the US economy entered a technical recession, which stock investors celebrated because they think it means the US Federal Reserve won’t have to hike interest rates quite so much; and,

* Democratic Senator Joe Manchin backflipped on his opposition to higher taxes on US companies and hedge fund managers to pay for climate emissions reduction measures.

In this week’s ‘hoon’ webinar for paid subscribers to The Kaka at 5pm yesterday, I discussed these and other events with co-host Peter Bale and special guest Josie Pagani. The audio of the hour-long webinar is in the podcast above.

Elsewhere in the hoon above, we talked about Russia’s decision to end the International part of the International Space Station and the death of James Lovelock. Here’s Peter’s Weekly World Bulletin email newsletter for more background.

The highlights on The Kaka this week

In Monday’s Chorus, I made the case for profitable and dividend-paying companies to repay the remaining $19b of their Covid wage subsidies and for the beneficiaries of over $500b of land appreciation paying a Covid windfall tax.

In Tuesday’s Chorus, I covered former Governor Graeme Wheeler’s criticism of the Reserve Bank, including a pointer back to my call last week for a full independent review of its operation of monetary policy.

In Wednesday’s Chorus, I looked at National’s call for a review and why it had put Governor Adrian Orr’s reappointment for a second five-year term from the end of next March in doubt.

In Thursday’s Chorus, I dived into the positive reaction to the Fed’s second consecutive 75 basis point hike this week and why global investors and traders are now betting on a soft landing for the US economy.

In Friday’s Chorus, I covered the US economy’s surprise fall into a technical recession in the June quarter, and what that might mean for interest rates and house prices here in Aotearoa-NZ.

This is my weekly summary and sampler of the big news of the week we’ve covered on The Kākā for both free and paid subscribers. The public interest journalism I do daily on housing unaffordability, climate change inaction and poverty reduction is possible with the support of paid subscribers. Join our community by subscribing in full.

A reminder to free subscribers reading here that we have a special $30 a year deal for under 30s and anyone on a benefit. We also have a new special $65 a year deal for over 65s who are renting and reliant on NZ Superannuation. Any students, teachers and staff who signs up to the free tier with a .school.nz or .ac.nz email address will also be comped up to the full paid tier for free.

TLDR: This week, Aotearoa-NZ’s annual inflation rate rose more than expected to 7.3%, which restarted the debate about who was to blame and what should be done about it, as I wrote in Tuesday’s Chorus. Meanwhile, Europe finally tightened its monetary policy, but faces the potential for another debt crisis, as I wrote in Friday’s Chorus.

In the climate crisis, I wrote in Monday’s Chorus about performative declarations of climate emergencies by politicians and why they can’t now be trusted. In Wednesday’s Chorus, I wrote about growing fear of another house-building bust and why that’s both a long term problem and a symptom of our political economy’s structural failings.

In Friday evening’s live hoon webinar for paid subscribers, which is in recorded form above for all subscribers, I took a lap around these issues and more in geopolitics and the global economy with co-host Peter Bale.

We talked about:

* who Liz Truss is and why she might become Britain’s next Prime Minister;

* how the ground war in Ukraine is now playing out;

* whether inflation is really peaking;

* whether the Reserve Bank here can be blamed for high inflation;

* how the Auckland Mayoralty campaign is playing out.

Here’s Peter’s Weekly World Bulletin email newsletter for more background.

This is my weekly summary and sampler of the big news of the week we’ve covered on The Kākā for both free and paid subscribers. The public interest journalism I do daily on housing unaffordability, climate change inaction and poverty reduction is possible with the support of paid subscribers. Join our community by subscribing in full.

A reminder to free subscribers reading here that we have a special $30 a year deal for under 30s and anyone on a benefit. We also have a new special $65 a year deal for over 65s who are renting and reliant on NZ Superannuation.

TLDR: This week, demands to loosen restrictions on bringing in migrant workers grew to a crescendo amid widespread delays, cancellations and employer concerns about wage inflation. In Thursday’s Chorus, I looked at whether a loosening is a good idea on its own, and what a bipartisan deal on migration along with infrastructure spending should look like.

Also, the Reserve Bank hiked its official interest rate as expected and house prices kept falling, but I took a closer look in Wednesday’s Chorus at the central bank’s $12.7b worth of cheap loans for banks, which are diluting the effects of its tightening and giving already-very-profitable banks a taxpayer subsidy.

I also challenged the assumptions about our ‘squeezed middle’ in Friday’s Chorus and detailed in Tuesday’s Chorus how our bi-partisan 30/30 mantra on public debt and the size of Government is sucking our future dry. In Monday’s Chorus, I looked at how a pathway to citizenship for New Zealanders living in Australia would expose employers here to much more ‘brain drain’ pressure.

In Friday evening’s live hoon webinar for paid subscribers, which is in recorded form above for all subscribers, I took a lap around these issues and more in geopolitics and the global economy with co-host Peter Bale and special guest Professor Robert Patman from the University of Otago.

We talked about:

* Sri Lanka’s political and economic implosion;

* what Boris Johnson’s departure might mean for Aotearoa-NZ; and,

* How the Pacific Islands Forum went and why China may have over-played its hand in the Pacific.

Here’s Peter’s Weekly World Bulletin email newsletter for more background.

This is my weekly summary and sampler of the big news of the week we’ve covered on The Kākā for both free and paid subscribers. The public interest journalism I do daily on housing unaffordability, climate change inaction and poverty reduction is possible with the support of paid subscribers. Join our community by subscribing in full.

A reminder to free subscribers reading here that we have a special $30 a year deal for under 30s and anyone on a benefit. We also have a new special $65 a year deal for over 65s who are renting and reliant on NZ Superannuation.

TLDR: This week PM Jacinda Ardern pushed back at talk Aotearoa-NZ has joined the ‘west’ too strongly in a new cold war between the United States and China, British PM Boris Johnson (finally) resigned (sort of) and former Japanese PM Shinzo Abe was shot and killed.

Closer to home, two-year mortgage rates were cut 30-40 basis points to around 5.45%, commodity prices fell again as global recession fears mount, and consumer confidence here slumped despite record-low unemployment and household income growth actually being more than than the CPI inflation rate.

Also:

* the Infrastructure Commission told the Government and Wellington’s Councils that their choice of $7.4b of tunnels for ‘Lets Get Wellington Moving’ was not the best option for reducing carbon emissions, although the Councils approved it anyway; and,

* the Government announced plans to appoint a single Grocery Commissioner inside the Commerce Commission in the hope of doing a ‘2 Degrees’ on the groceries duopoly of Foodstuffs (Pak’n’Save/New World/Four Square) and Woolworths (Countdown).

In Friday evening’s live hoon webinar for paid subscribers, which is in recorded form above for all subscribers, I took a lap around these issues and more in geopolitics and the global economy with co-host Peter Bale and special guests Professor Robert Patman from the University of Otago and ANZ economist Finn Robinson.

We talked about:

* British PM Boris Johnson’s demise (finally);

* PM Jacinda Ardern's two big foreign policy speeches at Chatham House in London and the Lowy Institute in Sydney, which struck different tones on China, Russia and our independent foreign policy;

* Shinzo Abe’s assassination;

* the unprecedented joint warning in public from the bosses of MI5 and FBI to business leaders in a speech in London warning of China's corporate espionage; and,

* a preview of next week’s Pacific Islands Forum, where China’s recent attempt to pull various Island nations into its sphere of influence will be at the top of the agenda, along with how Australia, Aotearoa-NZ and the United States can do more on climate change and elsewhere to push back.

Also, I talked with Finn Robinson about the curiously weak noises coming from consumers, despite unemployment being at 3.2% and household incomes actually outpacing inflation in consumer prices. Finn wrote this excellent note this week on the issue.

Here’s the charts we refer to in the podcast. Firstly, this one showing how divergent confidence is from unemployment.

And then this one showing how spending isn’t quite as depressed as confidence. At least yet.

Peter and I also discussed:

* the big four banks cutting their two year mortgage rates by around 30-40 basis points to around 5.45% after two year wholesale ‘swaps’ rates fell 80 basis points from their June 16 peak of 4.56% in response to cooling global economic growth and inflation expectations in recent weeks; and,

* the fall in commodity prices to pre-war levels as fears grow that the ‘demand destruction’ from inflation’s post-war spike and much-higher interest rates are doing the central banks’ work for them.

There’s more on those interest rate moves here from me earlier in the week.

Earlier in the week, I looked in depth at the move to create a new Groceries Commissioner inside the Commerce Commission.

I also covered another survey showing the depth of hopelessness among young renters.

This is my weekly summary and sampler of the big news of the week we’ve covered on The Kākā for both free and paid subscribers. The public interest journalism I do daily on housing unaffordability, climate change inaction and poverty reduction is possible with the support of paid subscribers. Join our community by subscribing in full.

A reminder to free subscribers reading here that we have a special $30 a year deal for under 30s and anyone on a benefit. We also have a new special $65 a year deal for over 65s who are renting and reliant on NZ Superannuation.

TLDR: This week PM Jacinda Ardern signed a trade deal with the European Union and gave an historic speech to NATO’s summit in Madrid, which edged Aotearoa-NZ ever closer to the US-led alliance lining up against Russia and China. In response, our largest trading partner called the speech wrong and unhelpful.

Also, business and consumer confidence here slumped again and the Reserve Bank’s new Chief Economist said he was hopeful the tide was finally turning against the housing market’s one-way bet. House prices have fallen 7% from their peak in November and the central bank sees a 15% fall from peak to trough over the next year.

In Friday evening’s live hoon webinar for paid subscribers, which is in recorded form above for all subscribers, I took a lap around these issues and more in geopolitics and the global economy with co-host Peter Bale.

This is my weekly summary and sampler of the big news of the week we’ve covered on The Kākā for both free and paid subscribers. The public interest journalism I do daily on housing unaffordability, climate change inaction and poverty reduction is possible with the support of paid subscribers. Join our community by subscribing in full.

A reminder to free subscribers reading here that we have a special $30 a year deal for under 30s and anyone on a benefit. We also have a new special $65 a year deal for over 65s who are renting and reliant on NZ Superannuation.

The Five Things that changed this week

The PM called out China in her NATO speech

Prime Minister Jacinda Ardern called in a speech at a NATO summit for the alliance to stand firm against China’s newly assertive approach in the Pacific and again pointed to China’s human rights abuses. This followed Aotearoa-NZ joining a new aid and cooperation grouping formed by Australia, the United States and Japan called the Partners in the Blue Pacific (PBP).

In turn, NATO named China as a significant challenge in its new statement of strategic intent and lumped China in with Russia.

“The deepening strategic partnership between the People’s Republic of China and the Russian Federation and their mutually reinforcing attempts to undercut the rules-based international order run counter to our values and interests.” NATO in its new strategic statement agreed at a summit in Madrid.

China called Ardern’s comments ‘wrong and regrettable’

In response to all of this, China’s Embassy in Wellington stated Ardern’s speech was ‘misguided, wrong and regrettable.’

“It is obvious that such comment is not helpful for deepening mutual trust between the two countries, or for the efforts made by the two countries to keep our bilateral relations on the right track.” China Embassy statement

Aotearoa NZ signed a trade deal with the European Union

Ardern announced a last-minute trade agreement with the EU that will dramatically improve access for our kiwifruit, fish and honey exports, but has disappointed meat and dairy exporters. Overall, the deal is expected to increase exports to Europe by $1.8b by 2035, with up to $600m extra in meat and dairy exports.

But meat and dairy exporters were unhappy the deal was accepted, but Ardern may have decided the winds were blowing against and improvement and some sort of deal was needed, just in case our largest trading partner decided to restrict access.

RBNZ said it hoped the housing obsession tide has turned

The Reserve Bank’s new Chief Economist Paul Conway talked hopefully about the chances the tide is turning on the ‘one-way bet’ for housing as an investment because interest rates are rising, houses are being built, tax rules have been tweaked and migration is low. I’m not so sure and made my case in Friday’s Chorus.

Councils prevaricated again on transport and housing

Auckland Council voted to protect 15,000 villas in central suburbs from intensification, Stuff’s Todd Niall and the NZ Herald’s Bernard Orsman reported this week. Meanwhile Wellington City Council voted this week to water down its intensification plans, The Spinoff’s Jacob Flanagan reported.

Earlier in the week, the Government and the Wellington Council announced a preference for $7b worth of road tunnels and (possibly) a light rail line to Island Bay some time in the next 20 years, although no money was allocated or final decisions taken.

These performative announcements and council set pieces all disguise the unwillingness of central and local Government to take on higher debt and use higher taxes to pay for the transport and water infrastructure needed to underpin new house building. The National and Labour parties have agreed over the last 30 years to keep net Government debt and tax at around 30% of GDP and to keep capital gains on owner-occupied residential land tax free. Significant infrastructure investment and a shift away from the ‘one way bet’ is not possible without a change in that consensus.

These performative announcements also disguise that central and local Governments don’t have social licenses to reconfigure roads for rail, walking and cycling, or intensify housing zoning in a way to enable housing supply growth.

Median-voting homeowners and voting ratepayers don’t want new development near them or the bills that come with that, but they do like the house price and low-wage benefits that come with high population growth that is not catered for.

Other places I’ve been this week

The agreement I have with paid subscribers is to spread my public interest journalism around onto as many publicly available platforms as possible after publishing it and including it on podcasts put out here via The Kākā. That means I often agree to go on television and radio to talk about these issues, in particular housing unaffordability, inequality and poverty.

This week I talked through my idea for a Matariki account using a new central bank digital currency with Wallace Chapman on RNZ on Tuesday.

On Friday, I put out this week’s episode of When The Facts Change with The Spinoff.

Last night I was interviewed for Newshub on TV3 about this tweet I sent out on why so many young renters are looking to move to Australia.

I referred in the tweet to this chart showing a surge in job advertisements in Australia.

Have a great weekend

Ka kite ano

Bernard

TLDR: This week the US Federal Reserve hiked its key interest rate by a super-sized 75 basis points to fight inflation running at 8.6%. That unleashed fresh mayhem on global markets, including another slump in shares into bear market territory and the collapse of crypto-lender Celcius. Bitcoin fell more than a third.

Meanwhile, house prices in Aotearoa-NZ fell again, including Auckland City’s median price falling $360,000 or 23% in six months, the chances of a recession here rose and the Gib crisis morphed into shareholder complaints to Fletcher Building’s CEO. PM Jacinda Ardern replaced Building and Construction Minister Poto Williams with Housing Minister Megan Woods to deal with the crisis. Williams was also replaced by Chris Hipkins as Police Minister.

In this week’s live hoon webinar for paid subscribers, which is in recorded form above, Peter Bale and I talk with special guests independent economist Rodney Jones and Easy Crypto CEO Janine Grainger.

This is my weekly summary and sampler of the big news of the week I’ve covered on The Kaka for both free and paid subscribers. The public interest journalism I do daily on housing unaffordability, climate change inaction and poverty reduction is possible with the support of paid subscribers. Come and join our community by subscribing in full. Our full subscribers have allowed us to make The Kākā fully free for students, teachers and those working for advocacy groups and political parties in these areas. Anyone in these groups should just sign up to the free tier with their work, school, university, polytechnic or advocacy group emails and we’ll convert you to the full paid tier behind the scenes.

A reminder to free subscribers reading here that we have a special $30 a year deal for under 30s and anyone on a benefit. We also have a new special $65 a year deal for over 65s who are renting and reliant on NZ Superannuation.

The five things that changed this week

The Fed’s super-sized rate hike

The US Federal Reserve announced a 75 basis point rise in its official cash rate to a range of 1.50% to 1.75%, which was its biggest official interest rate hike since 1994. Global stocks fell sharply before and after the hike, which only a week earlier economists had expected to be a 50 basis point hike. The difference was surprisingly hot inflation data last Friday night showing US CPI inflation of 8.6% in the year to May.

Now we’ll find out how much pain the US economy and global markets can take before the Fed and other central banks have to stop the tightening, or even resume the money printing, as they have done repeatedly over the last decade whenever they tried to force investors to go ‘cold turkey’ on the easy and cheap money.

The Federal Reserve appears determined to squash inflation rather than rescue investors again, but the European Central Bank showed on Wednesday it doesn’t have the same resolve. Having only just signalled last week it would stop printing this month and would hike from below 0% next month, the ECB held an emergency meeting and pledged to keep printing to buy Italian and Greek Government bonds to stamp on a threatened return of the repeated European debt crises seen from 2009 to 2012.

We talked with Rodney Jones about the dramas through the week on global markets, and also looked again the Reserve Bank’s decision to keep lending at cheap rates to banks here, and to slowly unwind its money printing from 2020 and 2021.

Crypto-currency lender Celsius collapsed and Bitcoin fell almost a third

Celsius, an unregulated bank of sorts that lent crypto-currencies to crypto startups at double-digit interest rates, collapsed after a classic run on the bank. It froze withdrawals and is now trying to work out where the collateral for its loans is and whether it can pay back the crypto-currencies it has lent. Fellow crypto lender Babel Financial also blocked withdrawals and crypo-investing hedge fund Three Arrows Financial collapsed.

The collapses comes after the implosion of the Terra-Luna stable coin complex a month ago and coincided with near 30% fall in Bitcoin to a key support level at US$20,000 on Friday. We talked late on Friday with Easy Crypto CEO Janine Grainger on the hoon about the events in global crypto markets and how it had affected traders in Aotearoa-NZ.

Bitcoin fell another 15% to US$17,616 on Sunday morning.

House prices kept falling in Aotearoa-NZ

The Real Estate Institute released sales volumes and prices data for May showing prices nationwide down 6.0% from the peak in November to where they were in June 21. Prices, as measured by the REINZ’s House Price Index, were down 13.3% in Auckland City to where they were in October 2020. Prices were down 15.8% in Wellington City to where they were in October 2020.

In median price terms, Auckland City’s median price has fallen by $360,000 or 23% from a peak of $1.54m in November to $1.18m in May. The median price isn’t as representative a measure as the House Price Index because a change in the type of properties sold can skew the figures. For example, a surge in the sale of apartments relative to larger houses would skew the numbers lower. But still, that’s a loss of $60,000 a month or $2,000 a day.

In Wellington City, the median price fell 14.6% to $988,000 in May from a peak of $1.157m in October.

The Gib crisis moves to Fletcher Building’s board room

After last week’s loudly-announced decision by Simplicity Living to dump Fletcher Building as its plasterboard supplier, Fletcher Building’s Wallstone Wallboards announced it would import one million square metres of plasterboard that would be available from July. The imports by the maker of Gib, which has a 94% market share, represents an increase of about 7-8% of annual supply.

By Thursday, MBIE and Auckland Council were reassuring ministers and the public that the largest consenter was approving non-Gib plasterboard. By Friday, the Shareholders Association and Simplicity, which owns 0.8% of Fletcher Building worth $35m, met in person with Fletcher CEO Ross Taylor. It didn’t go well from the shareholders’ point of view.

A recession in Aotearoa-NZ by the end of 2022?

Stats NZ reported this GDP fell 0.2% in the March quarter and was up 1.2% in Q1 from the same quarter a year ago. GDP in the year to the end of the March quarter was up 5.1%. The result was below market expectations that ranged from no growth to as high as 0.7% growth by the Reserve Bank in its April Monetary Policy Statement. Covid illness and the after-affects of the lockdowns in the second half of 2021 were blamed.

Economists said the result hadn’t changed their views on what the Reserve Bank would do with the Official Cash Rate on July 13 because the labour market and inflation pressures remained very tight. They still see another 50 basis point hike to 2.5%, although markets have been flirting with the prospects of a 75 basis point hike in recent days.

Most see GDP rebounding around 1.0% in the June quarter to avoid the technical definition of a recession, which is two quarters of lower GDP in row. However, BNZ Economist Stephen Toplis said on Thursday a mild recession was possible later this year.

Other places I’ve been this week

Part of the deal I have with paid subscribers is that I’ll spread my analysis and reporting on the economy, housing, climate and poverty as widely as I can through interviews and panel appearances on publicly available media, such as Newshub’s The Nation, Waatea News, my When the Facts Change podcast via The Spinoff and The Working Group.

Ka kite ano

Bernard

TLDR: This week our Reserve Bank detailed its plans to slowly unwind its $55b of Covid-era money printing, the European Central Bank finally stopped its money printing to fight inflation of over 8%, the United Nations warned the war in Ukraine was unleashing a global hunger and poverty catastrophe, and Simplicity Living cancelled its orders to buy Gib from Fletcher Building.

Elsewhere: US inflation figures overnight was higher than expected, which triggered another slump in share prices and fears the US Federal Reserve will have to hike interest rates much faster and higher than previously thought. Meanwhile, the Reserve Bank of Australia surprised most investors and economists earlier this week by hiking a full 50 basis points. That slammed Australian bank share prices and prompted ANZ to put up its mortgage rates here.

In this week’s live hoon webinar for paid subscribers, which is in recorded form above, Peter Bale and I talk with special guests Professor Robert Patman from the University of Otago about the latest geo-political news and Simplicity CEO Sam Stubbs about financial market ructions and Simplicity Living’s decision to cancel its orders to buy Gib from Fletcher Building.

This is my weekly summary and sampler of the big news of the week I’ve covered on The Kaka for both free and paid subscribers. The public interest journalism I do daily on housing unaffordability, climate change inaction and poverty reduction is possible with the support of paid subscribers. Come and join our community by subscribing in full. Our full subscribers have allowed us to make The Kākā fully free for students, teachers and those working for advocacy groups and political parties in these areas. Anyone in these groups should just sign up to the free tier with their work, school, university, polytechnic or advocacy group emails and we’ll convert you to the full paid tier behind the scenes.

A reminder to free subscribers reading here that we have a special $30 a year deal for under 30s and anyone on a benefit. We also have a new special $65 a year deal for over 65s who are renting and reliant on NZ Superannuation.

The five things that changed this week

The Reserve Bank confirmed a slow unwinding of its money-printing

The Reserve Bank detailed on Thursday its plans to unwind its $55b programme of money printing relatively slowly over the next five years to avoid disrupting the economy and asset markets. It also says it might have to print again and wants to sideline the issue of growing inequality between renters and home owners in its current review of monetary policy.

I argued in Friday’s Dawn Chorus that the Reserve Bank decisions in early 2020 to unleash a credit boom that inflated the housing market by 45% to save the economy should be reviewed with an eye on the long-term effects of money printing on inequality. Right now, both the Government and the Reserve Bank are hoping few will notice or care about the $1t transfer of wealth to asset owners engineered during Covid without debate.

Finally, the Europeans stopped printing

The European Central Bank took a hawkish turn against inflation on Thursday night, announcing after its monthly monetary policy meeting it would stop printing money later this month and hike next month by 25 basis points. That would be the ECB’s first hike in 11 years. Its main deposit rate is actually still -0.5%. The ECB said it expected to hike by more at its September meeting, which markets saw as meaning a 50 basis point hike is likely. It forecast inflation wouldn’t fall from 6.8% this year to its 2% target until well into 2024.

So what? - It’s astonishing to think that the ECB still hasn’t stopped quantitative easing yet, which means it is still creating its own cash to buy European Government bonds, especially the ones from the PIGS (Portugal, Italy, Greece and Spain). Remember the PIGS? And the ECB pledging in 2012 to do ‘whatever it takes’ to stop the euro zone breaking up? It’s still doing that, partly because that last rate hike in 2011 was premature and destabilised the euro zone economies. So that’s why the pivot to stop printing and start hiking overnight matters.

Behind the curve - For comparison’s sake, our Reserve Bank stopped printing money and buying bonds in the middle of last year and started hiking in October. Our official cash rate is now up to 2.0% and is expected be hiked by another 50 basis points on July 13. Our inflation is about the same as Europe’s, but our unemployment rate is half that of Europe’s at 6.8%.

Brace for fallout - Even the anticipation of this ECB pivot from very dovish to slightly hawkish has caused ructions in financial markets. That’s because the euro zone economies remain much weaker than others in the developed world and its banking system is still under-capitalised. The ECB also has to extricate itself from being the largest owner of PIGS bonds and avoid another Greek-style meltdown in financial markets. That’s why the ECB went out of its way in its statement overnight to reassure investors it would keep buying Greek bonds to stop another collapse.

Mamma Mia - Italy’s 10 year bond yield jumped 27 basis points to 3.68%. It has tripled in the last year. It has also risen sharply relative to Germany’s 10 year yield at 1.51%, which has itself risen faster in the last 90 days than at any time in this century. This gap or ‘spread’ between Italy’s 10 year yield and the German ‘bund’ is a key indicator of stress and fear inside Europe’s financial system. It rose to a two-year high this week. And then there’s the not-so-small matter of the most destructive war since World War Two raging on the edge of the euro zone…

On meltdown alert - Plenty of players in financial markets have feared some sort of repeat of the Global Financial Crisis at various points since the Covid pandemic broke out in February 2020. Central banks acted preemptively and globally to throw all sorts of money-printing kitchen sinks to avoid a repeat of the 2008 GFC, which forced central banks and Governments to bail out US banks and UK banks, and to prop up European banks. The US and British banks have since been reorganised and recapitalised, but the European banks have mostly just staggered on without having to have proper cleanouts.

The excuses evaporate - The ECB’s ‘whatever it takes’ interventions in 2012 helped the European banking system stave off its ‘Minsky Moment.’ Here’s a useful Enda Curran backgrounder via WaPo on what a Minsky Moment is. But those interventions through money printing to buy the weakest European government’s bonds and hold up their values on bank balance sheets was only possible because European inflation was painfully low and the ECB knew it could stimulate through money printing without having to worry about a damaging inflation breakout. Now there is nowhere for the ECB, European banks and the PIGS to hide. That’s why many fear this pivot to rate hikes and the end of ECB money printing could trigger a European version of the 2008 GFC. As if we (and the Europeans in particular) don’t have enough to worry about…

UN warns of global food and poverty catastrophe

‘A food catastrophe’ - The United Nations warned on Wednesday that the war in Ukraine and the after-effects of the Covid Pandemic had turned into a perfect storm of higher food, energy and finance costs for 1.2b workers. It issued a briefing note showing how higher energy and food costs, along with blockades on fertiliser and wheat exports via the Black Sea, could turn a food crisis this year into a food catastrophe next year.

UN Secretary General Antonio Guterres called again for a lifting of the blockades in the Black Sea and said the developed world would have to ensure emerging market debt crises can be resolved. See more below in chart and quote of the day.

“The cost-of-living crisis could spark a cycle of social unrest leading to political instability.” UN trade chief Rebeca Grynspan in a briefing note on what the UN calls the greatest cost of living crisis of the 21st Century.

The note explains the negative feedback loops and spirals of prices and supply that are worsening the situation, driving more than a third of a billion people into starvation territory. The bolding is mine.

“Countries and people with limited capacity to cope are the most affected by the ongoing cost-of-living crisis. Three main transmission channels generate these effects: rising food prices, rising energy prices, and tightening financial conditions.

“Each of these elements can have important effects on its own, but they can also feed into each other creating vicious cycles - something that unfortunately is already starting. For instance, high fuel and fertilizer prices increase farmers’ production costs, which may result in higher food prices and lower farm yields. This can squeeze household finances, raise poverty, erode living standards, and fuel social instability.

“Higher prices then increase pressure to raise interest rates, which increase the cost of borrowing of developing countries while devaluing their currencies, thus making food and energy imports even more expensive, restarting the cycle. These dynamics have dramatic implications for social cohesion, financial systems and global peace and security.” UN briefing note.

I think the note is this week’s must-read. It includes this chart showing how even-faster-rising fertiliser prices were worsening the feedback loops.

Simplicity Living cancelled its orders for Gib from Fletcher Building

‘We’re not taking it any more’ - Simplicity Living, which is building 550 build-to-rent- homes in Auckland, announced on Thursday night it had cancelled its orders for Gib plasterboard from Fletcher Building and was importing an alternative from Thailand for 40% cheaper per-sheet of plasterboard board, even after shipping costs.

Simplicity Living MD Shane Brealey blasted Fletcher Building over the Gib crisis.

"It's tragic that it takes only eight weeks to get much needed plasterboard from South Asia, but eight months from south Auckland. By looking at building consents, Fletchers must have known there would be a shortage of plasterboard at least 12 months ago. So why aren’t they doing what we’ve just done?” Simplicity Living MD Shane Brealey in a statement

We asked Simplicity CEO Sam Stubbs onto the weekly hoon to talk in more depth about the decision and he explained how the Gib shortages were hammering so many small builders, who were too dependent on Gib-driven building techniques and too fearful that using an alternative would mean their homes weren’t approved by Council building inspectors, who are themselves hyper-focused on avoiding any new products that might expose councils to ‘last-man-standing’ building quality claims (as happened with leaky buildings that used James Hardie’s Hardietex cladding).

The discussion is fascinating. I’d recommend listening to the start, where Peter explains the origin of the Gib brand name, and from 44:18 onwards where we discuss the Gib crisis and the way it is scuppering large sections of the building industry.

Don’t expect a grocery duopoly breakup pre-election…or maybe ever

High bar for breakup - MBIE released a Cabinet paper on Wednesday that it prepared for Commerce Minister David Clark on The Government’s response to the Commerce Commission’s recommendations on dealing with (or to…) the supermarkets duopoly. MBIE’s advice included slightly more detail on the breakup option including talking about retail divestment rather than structural separation, but noted there would be a high bar for action and hardly any preparatory analysis had been done. Consultation would not begin until early next year.

Here’s the key details in the cabinet paper on Clark’s actions and officials’ timelines (bolding mine):

“Retail divestment would involve divestment of existing retail stores or banners by major grocery retailers to establish new grocery retailers. There is a high burden of proof to be met before decisions on retail divestment can be taken as the Commission did not carry out a detailed cost-benefit analysis.

There are several considerations to be worked through further, including: considering possible implementation options in detail; undertaking policy design and a detailed cost-benefit analysis of retail divestment options; considering potential risks and issues; understanding the potential impacts of retail divestment on retailers’ operations, economies of scale, property rights and supply models; and, determining how interventions would be enforced. MBIE on Page 15 in the paper

Officials will consider these matters in detail between now and September 2022. I will then report back to Cabinet in October 2022 with a detailed cost benefit analysis on retail divestment options and to seek decisions on whether to proceed with further steps on retail divestment. Based on this work, implementation options could then be developed for public consultation in early 2023.” David Clark on Page 15 in the paper.

So what? I’d be surprised if any concrete breakup plans or action emerge before the next election. The grocery duopoly can happily stall action ahead of a likely change of Government. National has said it supports the creation of a regulator and mandatory codes for wholesale access and suppliers, but has been cautious about supporting a breakup. I think that would be highly unlikely, given National stalled Section 36 reform from 2009 to 2017 that would have given the Commerce Commission more powers.

TLDR: In the podcast above of this week’s ‘hoon’ webinar for paid subscribers, co-hosts Bernard Hickey and Peter Bale bring talk with special guests Robert Patman and Josie Pagani about China’s backlash against a strengthening of NZ’s security ties with the United States.

This is our weekly sampler email for both free and paid subscribers.

A reminder to free subscribers reading here that we have a special $30 a year deal for under 30s and that students and teachers should sign up for the free tier using their ‘school’ or ‘ac’ email addresses to get converted to the full subscription for free. And we have a new special $65 a year deal for over 65s who are reliant on NZ Superannuation.

Five things of note this week

Aotearoa-NZ strengthened ties with the United States

This week PM Jacinda Ardern met with US President Joe Biden in the White House. They talked about gun control, the Christchurch Call and trade, but most importantly they signed a detailed joint statement that was heavily critical of China in the Pacific and elsewhere, and which strengthened our security and defence ties with the United States.

China lashed back at the joint statement

Chinese officials attacked what they saw as a strengthening of our military ties with the United States and a ramping up of joint anti-China rhetoric in the strong joint statement. They suggested it might affect our trade ties.

Here’s what I wrote on Friday about the back and forth.

Cabinet threatened the grocery duopoly with a breakup

The Government threatened to break up the supermarkets duopoly if they don’t play nice with plans for mandatory wholesale access.

Here’s what I wrote on Tuesday.

The grocery duopoly’s oppressive lease clauses revealed

There were revelations that supermarkets on Thursday that the supermarkets duopoly have been using special clauses in leases to stop competitors in all sorts of retail categories being allowed into shopping centres.

Here’s the deep dive I published today on that.

Yet again, a sugar tax is rejected

Here’s the chorus I wrote on Thursday, which led with the latest research showing sugar taxes work to reduce consumption, but the Government continues to oppose them.

Ka kite ano

Bernard

TLDR: This week the Reserve Bank warned of a rise in mortgage rates to 6% and a peak-to-trough fall in house prices of 15%, but said the economy and homeowners could handle it without forcing the economy into recession. It also rejected Opposition claims that Labour’s fiscal policy and employment mandate had forced the Reserve Bank’s faster move to higher interest rates.

Elsewhere, China launched an aggressive push for much deeper trade and security deals in the Pacific to add to the one it already has with the Solomon Islands. In response, the United States opened a new Indo-Pacific Economic Framework that it hopes will contain China, even though it doesn’t offer extra trade access into the world’s largest economy. Aotearoa-NZ and Fiji joined it.

In this week’s live hoon webinar for paid subscribers, which is in recorded form above, Peter Bale and I talk with special guests Professor Robert Patman from the University of Otago about the latest geo-political news and Green Finance Spokesperson Julie Anne Genter about monetary and fiscal policy.

This is my weekly summary and sampler of the big news of the week I’ve covered on The Kaka for both free and paid subscribers. The public interest journalism I do daily on housing unaffordability, climate change inaction and poverty reduction is possible with the support of paid subscribers. It has allowed us to make it all free for students, teachers and those working for advocacy groups and political parties in these areas. Anyone in these groups should just sign up with their work, school, university, polytechnic or advocacy group emails and we’ll convert to the full paid tier behind the scenes.

A reminder to free subscribers reading here that we have a special $30 a year deal for under 30s and that students and teachers should sign up for the free tier using their ‘school’ or ‘ac’ email addresses to get converted to the full subscription for free. And we have a new special $65 a year deal for over 65s who are reliant on NZ Superannuation.

The five things that changed this week

The Reserve Bank turned more hawkish

The Reserve Bank hiked its Official Cash Rate 50 basis points to a six-year high of 2.0% this week. That was an unprecedented second ‘double-whammy’ 50 point hike in succession, but that wasn’t the surprise. The central bank also raised and steepened its forecast track for the OCR in a way that would see mortgage rates rise to around 6% by early next year and help drive house prices down 15% from the peak in November last year to a trough late next year.

The Reserve Bank described its approach as “briskly” raising interest rates to get annual inflation down from 6.9% in the March quarter to under 3% late next year, and that it was “resolute” about getting back into its 1-3% target band.

Here’s my preview on the day and my report on the next day.

China went fishing for friends in the Pacific

China’s Foreign Minister Wang Yi embarked on a series of visits to nine Pacific Island nations this week, offering a series of deeply integrated trade, security, data sharing and police cooperation deals similar to the one it has just signed with the Solomon Islands. The depth and breadth of the proposals surprised many and alarmed the ‘western’ powers in the Pacific.

In response to China’s latest push for influence in the Pacific, the United States announced a widening of its ‘Quad’ security alliance with India, Japan and Australia to a new Indo-Pacific Economic Framework (IPEF), which Aotearoa-NZ and Fiji immediately joined. IPEF is the US-driven alternative to the Trans-Pacific Partnership, which was originally designed to include the United States in a grouping that excluded China and created a massive free trade block. But Donald Trump pulled the United States out and Joe Biden does not have domestic support for an easing of trade access to the world’s largest economy.

IPEF is largely about writing the rules for and securing supply chains and services trading arrangements that don’t include China.

Here’s what I wrote about IPEF this week.

Global recession warnings flashed red

Fresh data was reported this week showing the US and Japanese economies contracted in the March quarter because of Covid supply chain disruptions and weak consumer spending due to demand destruction from real wage deflation.

China also warned its strict lockdowns to maintain Covid elimination had reduced output in the world’s second largest economy, and Aotearoa-NZ’s largest trading partner. Here’s what I wrote about that this week.

Britain announced a 25% windfall tax

Britain’s Conservative Government made a U-turn and decided to go ahead with a 25% windfall profit tax on oil, gas and electricity companies to raise £15b to paid for energy discounts for households.

I talked in Friday’s Chorus about the prospects for a windfall tax here to claw back some of the $20b in cash payments to businesses that are now stored in company bank accounts or being paid out as dividends.

Fresh quake shocks for Wellington’s CBD

The Ministry of Education moved 1,000 staff out of its relative-new head office building on Bowen St in Wellington after it was found to have hollow-core pre-cast concrete floors that are now deemed quake prone. Another 150 buildings in Wellington’s CBD use the same flawed construction system, delivering another blow to the capital city’s economy after an awful few years dominated by Covid lockdowns, protest blockades at Parliament and brutally high rents and house prices.

I talked about this in Friday’s Chorus too.

Chart of the week

Real wages deflated, but real household incomes still rose

Here’s the Reserve Bank’s summary from its MPS this week:

“A strong labour market and higher costs of living have driven wages higher in recent quarters. The share of annual wage increases greater than 5 percent is near its peak prior to the global financial crisis (GFC). Despite this, wage growth for those staying in the same job has not generally kept up with inflation.

Overall, household incomes have been supported by workers switching jobs for higher pay, promotions with the same employer, and working longer hours (figure 2.10). Once these factors are taken into account, aggregate labour income growth has been stronger than consumer price inflation over the course of the pandemic – albeit to a much lesser extent in the past year.” Reserve Bank May 25 MPS

Have a great weekend

Ka kite ano

Bernard

TLDR: This week the Government released a tame Emissions Reduction Budget and presented a tighter Budget, while overseas, the United Nations warned 47m more people will starve within months if the war in Ukraine continues and Australian PM Scott Morrison faces an election loss this week.

I discussed these events and more in our weekly ‘hoon’ live webinar for paid subscribers to The Kākā, which is in recorded podcast form above for all to listen to. This is our weekly ‘sampler’ email for both free and paid subscribers.

The public interest journalism I do daily on housing unaffordability, climate change inaction and poverty reduction is possible with the support of paid subscribers. It has allowed us to make it all free for students, teachers and those working for advocacy groups and political parties in these areas. Anyone in these groups should just sign up with their work, school, university, polytechnic or advocacy group emails and we’ll convert to the full paid tier behind the scenes.

A reminder to free subscribers reading here that we have a special $30 a year deal for under 30s and that students and teachers should sign up for the free tier using their ‘school’ or ‘ac’ email addresses to get converted to the full subscription for free. And we have a new special $65 a year deal for over 65s who are reliant on NZ Superannuation.

Five big things this week

Is that it?

On Monday the Deputy PM Grant Robertson and Climate Change Minister James Shaw released the long-awaited Emissions Reduction Plan, which is the Government’s roadmap to achieve the emissions reductions budgets set by the Climate Commission.

The $2.9b of spending over four years listed in the plan is being paid for by $4.5b of receipts from the Emissions Trading Scheme (ETS), which has been cordoned off into an Climate Emergency Response Fund (CERF) . It disappointed those hoping for faster and more aggressive action to shift people out of cars and onto bikes, buses, trains, footpaths, electric cars, e-bikes and scooters. It also did not include details of how to bring Agriculture into the ETS. That is due later this year.

Here’s what I wrote from the ‘lockup’ presenting the plan.

The 12 blocks of Tasty Cheese Budget

On Thursday, Robertson tabled his fifth Budget, including a $27-a-week-for-three-months one-off cost of living support payment for people not already getting the winter energy payment or a benefit. The price of a block of ts The Opposition criticised the Budget as profligate, although it actually represented a slight tightening of fiscal policy over the next four years.

Here’s what I wrote on Wednesday, Thursday and Friday about the background to Budget 2022 and the details announced on the day.

A looming global food crisis

The UN warned on Thursday night that another 47m people faced starvation within a few months if the war in Ukraine and Russian blockades of grain shipments from Black Sea ports continued, adding to the 276m already hungry because of climate change and civil wars. Wheat prices rose another 6% on Wednesday night after India, the world’s second largest grain grower after China, banned exports.

The Economist-$$$ reported yesterday that Russia and Ukraine usually provide 12% of the world’s traded calories.

They supply 28% of globally traded wheat, 29% of the barley, 15% of the maize and 75% of the sunflower oil. Russia and Ukraine contribute about half the cereals imported by Lebanon and Tunisia; for Libya and Egypt the figure is two-thirds. Ukraine’s food exports provide the calories to feed 400m people. The war is disrupting these supplies because Ukraine has mined its waters to deter an assault, and Russia is blockading the port of Odessa. The Economist-$$$

The United States is considering sending long-range anti-ship missiles to Ukraine to destroy Russian vessels enforcing the blockade and accused Russia of holding the food security of tens of millions hostage.

The UN’s World Food Programme also called for the blockade to end.

Scott Morrison is set to lose power this weekend

The Opposition Labor Party is ahead of the governing Liberal/National coalition by around five percentage points in the last polls before this weekend’s Federal election. PM Scott Morrison looks set to lose because women see him as sexist and his Government has taken little action to address climate change.

Stocks slumped on fresh recession fears

US stocks briefly fell into bear market territory overnight, taking their falls from their peaks in January to over 20%. Here’s what I wrote on Tuesday.

The podcast above of the weekly ‘Hoon’ webinar for paying subscribers on Thursday night features co-hosts Bernard Hickey & Peter Bale talking about the week’s news with regular and special guests, including:

* Robert Patman and Elaine Monaghan on the week in geopolitics, including Donald Trump’s wrecking of the post-WW II political landscape; and,

* Cathrine Dyer on the week in climate news.

The Hoon’s podcast version above was recorded on Thursday night during a live webinar for over 200 paying subscribers and was produced and edited by Simon Josey.

The Hoon won the silver award for best current affairs podcast in this year’s New Zealand Podcast awards.

(This is a sampler for all free subscribers and anyone else who stumbles on it. Thanks to the support of paying subscribers here, we’re able to spread my public interest journalism here about housing affordability, climate change and poverty reduction other public venues. Join the community supporting and contributing to this work with your ideas, feedback and comments, and by subscribing in full. Remember, all students and teachers who sign up for the free version with their .ac.nz and .school.nz email accounts are automatically upgraded to the paid version for free. Also, here’s a couple of special offers: $3/month or $30/year for under 30s & $6.50/month or $65/year for over 65s who rent.)

Ngā mihi nui.

Bernard

TLDR: The Kākā’s hoon about the week that was in the podcast above included Peter Bale and me talking with special guest Professor Robert Patman about the latest geo-political and economic fallout from Russia’s war on Ukraine, along with closer looks at Budget 2022 on Thursday, the week’s crypto-crash and double-digit house price deflation.

This is our weekly sampler email for both free and paid subscribers.

A reminder to free subscribers reading here that we have a special $30 a year deal for under 30s and that students and teachers should sign up for the free tier using their ‘school’ or ‘ac’ email addresses to get converted to the full subscription for free. And we have a new special $65 a year deal for over 65s who are reliant on NZ Superannuation.

Five things of note this week

War in Ukraine generates more inflation

Gas supplies cut - Russia cut off one gas pipeline through Ukraine and Poland to the rest of Europe, forcing European gas futures prices up more than 20%. Russia also cut off its electricity supplies to Finland after Finland indicated it would formally apply early in the coming week to join NATO. The European Union is close to agreeing a Europe-wide ban on imports of Russian oil by the end of the year.

Sweden is also on the verge of joining NATO, which Russia said it would respond to with measures of a “military-technical” nature. Meanwhile, US howitzers are already being used in eastern Ukraine by Ukrainian forces. The M777 155mm howitzer can fire a GPS-guided shell 40km with pinpoint accuracy. Patman talked in the podcast above about these howitzers being reported to have hit targets inside Russian territory.

Here, petrol prices rose over $3/litre and all eyes will be on the Government’s Emissions Trading Plan this coming week as to whether it is extended beyond three months.

The Emissions Reduction Plan and Health Budget

The Government will release its Emissions Reduction Plan in a two-hour ‘lockup’ in The Beehive that ends at midday on Monday. I’ll be inside and do a special email as it is released. It is speculated to include an extension of the current half-price discount for public transport and a congestion charge for Auckland. There’s also talk of a congestion charge. I welcome the suggestions for queries in the comments below from paid subscribers.

In the Budget itself on Thursday, the Government is expected to focus the bulk of its $6b operating allowance (unchanged from what was announced in December) on funding the Health system restructuring (and tidying up DHB debts and deficits) and leaving the multi-year capital allowance unchanged from December at $9.8b.

Double-digit house price deflation

The crypto-crash

This week the algorithmic stable coin Terra-USD collapsed, taking the Luna digital currency with it. The most-used fiat-backed stablecoin Tether also ‘broke the buck’ briefly on Thursday night, although was back at US$1 this morning.

I was asked to talk about the collapse on TVNZ’s Q+A yesterday and spoke in a panel discussion with Jack Tame and Rebecca Stevenson. Here’s the full panel sesssion resulting video report:

The migration ‘rebalancing’

Ka kite ano

Bernard

TDLR: This is a podcast of the live weekly ‘hoon’ webinar I do with Peter Bale most Friday afternoons for paid subscribers. This week we spoke about the wealth tax debate, National’s rise above Labour in the polls, the scale of our infrastructure deficit and what’s being done about it, what a higher debt ceiling means and how the war in Ukraine is going.

Here’s more detail on what we talked about here:

* Te Waihanga’s estimate of our infrastructure deficit and how much more we’d need to build to cope with future population growth, improve our water quality and prepare for climate change ($1t in today’s money over 30 years or a doubling of investment to 10%/GDP per year);

* Finance Minister Grant Robertson’s response that such a doubling was not financially or politically possible, and that we can’t build our way out of our infrastructure deficit;

* Robertson’s unveiling of a new 30% of GDP debt ceiling, which is effectively 30 percentage points higher than the last one, but that he doesn’t want to use the spare fiscal headroom, yet;

* The Government’s decision to freeze new capital spending and leave its $6b operating allowance unchanged in the May 19 Budget to avoid adding to inflation;

* Reserve Bank Governor Adrian Orr’s comments that a 30% fall in house prices was feasible and that our banking system could cope with that just fine, along with an estimate that sustainable house prices were 5-20% below current levels in his select committee clashes with Green MP Chloe Swarbrick and National MP Nicola Willis; and,

* PM Jacinda Ardern’s painful prevarications and eventual capitulation on whether she would propose a wealth tax in her political lifetime.

Enjoy, although please accept my apologies for my poor sound quality this week. I was stuck in my car. And many thanks to the paid subscribers to The Kākā who support this sort of work I do reporting on and analysing issues around the political economy, in particular housing unaffordability, climate change inaction and child poverty.

This is a regular recorded podcast open for all subscribers in which I talk with Peter Bale and sometimes guests. The live webinar currently on from 5pm to 6pm on Fridays is open to paid subscribers.

A reminder too that we have a special $30 a year deal for under 30s and that students and teachers should sign up for the free tier to get converted to the full subscription for free. And we have a new special $65 a year deal for over 65s who are reliant on NZ Superannuation.

The podcast above of the weekly ‘Hoon’ webinar for paying subscribers on Thursday night features co-hosts Bernard Hickey & Peter Bale talking about the week’s news with regular and special guests, including:

* Robert Patman on the week in geopolitics, including Donald Trump’s wrecking of the post-WW II politicial landscape; and,

* Cathrine Dyer on the week in climate news, including what Joe Rogan gets wrong about climate change, how the transport lobby screws the scrum of energy and climate policy in Aotearoa, and the latest research from the seas around Antarctica.

* Edward Miller on electricity gentailer profits, dividends and investments, along with the Government’s discussions around re-opening Marsden Point as a refinery.

The Hoon’s podcast version above was recorded on Thursday night during a live webinar for over 200 paying subscribers and was produced and edited by Simon Josey.

The Hoon won the silver award for best current affairs podcast in this year’s New Zealand Podcast awards.

(This is a sampler for all free subscribers and anyone else who stumbles on it. Thanks to the support of paying subscribers here, we’re able to spread my public interest journalism here about housing affordability, climate change and poverty reduction other public venues. Join the community supporting and contributing to this work with your ideas, feedback and comments, and by subscribing in full.)

Ngā mihi nui.

Bernard