What happened Friday

Economy / news

A review of things you need to know before you sign off on Friday; Westpac next to cut some rates, but raise one TD rate, PMI better but not good, job ads retreat, swaps stable, NZD holds, & more

[updated]

10th May 24, 3:58pm by David Chaston

Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).

MORTGAGE/LOAN RATE CHANGES
Westpac said it will be lowering home loan rates on Monday. Details here. Bank of Baroda trimmed its fixed home loan rates.

TERM DEPOSIT/SAVINGS RATE CHANGES
TSB has trimmed all its TD offers for terms 5 months to 5 years. Westpac has raised its 9 month rate but lowered its six month rate. Bank of Baroda trimmed its term deposit rates. Update: SBS Bank will also be trimming many TD rates on Monday.

BETTER BUT NOT GOOD
The BNZ-Business NZ factory PMI rose in April. It has been a survey that has been a yoyo this year, albeit continuously below the breakeven 50 line. "April was a relative up month. Let’s call it better, but not good. Better because April’s 48.9 was higher than March’s 46.8. Not good because the PMI remains below 50 indicating contraction continues in the manufacturing sector – as it has for 14 consecutive months now", says BNZ.

FAST-TIGHTENING JOB MARKET
The BNZ/Seek analysis of job ads shows them dropping further in April, and applications per job ad continue to rise rapidly. All regions and industries see fewer job ads than a year ago, they report. They also noted that Design & Architecture job ad trends are now very low.

CORRUPTION CLEANUP
The SFO has got guilty pleas in a corruption case. A roading subcontractor charged by the Serious Fraud Office has pleaded guilty to corruptly giving gifts to an agent totaling $626k to secure contracts. Frederick Pou is one of three subcontractors charged with allegedly paying bribes in exchange for being awarded road maintenance work by former Broadspectrum roading contract manager Jason Koroheke. Mr Koroheke and former maintenance manager Aurelian Mihai Hossu (also known as Michael Hossu) were also charged in relation to the scheme. Charges against a fourth subcontractor have been withdrawn.

A SETP CLOSER FOR HYDROGEN?
The key to producing hydrogen at scale by splitting water is the cost of the electricity used to do the electrolising function. And the rate of efficiency of the process. This second aspect is getting serious attention now. And serious investment is now being attracted. If that nut can be cracked, hydrogen is one step along to replacing both liquid and gas fossil fuels. A Wollongong startup is claiming it is ahead of the pack.

THINGS GETTING CHEAPER IN JAPAN?
Household spending there dropped in real terms by -1.2% in the year to March, compared with market forecasts of a 2.4% fall, after a 0.5% decline in the prior month. It was the 13th straight month of declining personal expenditure, dragged by weak spending on housing, fuel, electricity & water charges. In contrast, expenditure for food, transport & communication, and education all rose.

SWAP RATES ON HOLD
Wholesale swap rates are likely to be little-changed today. Our chart below will record the final positions. The 90 day bank bill rate is unchanged at 5.63%, a level it has hovered around for more than 70 days. The Australian 10 year bond yield is down -4 bps from yesterday on global pressures, now at 4.37%. The China 10 year bond rate is little-changed at 2.33%. The NZ Government 10 year bond rate is down -1 bp to 4.80% and the earlier RBNZ fix was at 4.73% and up +1 bp from yesterday. The UST 10yr yield is down -1 bp from yesterday's close at 4.46%. Their 2yr is now at 4.82%, so the curve is little-changed at -36 bps inverted.

EQUITIES HIGHER. NZX50 MISSING OUT
The NZX50 is basically unchanged near the close today. That means it will end its week down -1.6%. The ASX is up +0.5% in afternoon trade and heading for a weekly rise of +1.7%. Tokyo is up +1.6% in morning trade. Hong Kong is up +1.5% at their Friday open; Shanghai is down -0.3%. Singapore has opened up +0.8%. Wall Street ended its Thursday session with the S&P500 up +0.5%.

OIL FIRMS SLIGHTLY
The oil price is +50 USc higher today from this time yesterday, at just over US$79.50/bbl in the US, while now at just on US$84/bbl for the international Brent price.

GOLD ON THE MOVE UP AGAIN
In early Asian trade, gold is up +US38 from this time yesterday, now just on US$2350/oz. Chinese retail demand is driving much of the price action.

NZD HOLDS
The Kiwi dollar has risen a net +10 bps from this time yesterday to just over 60.2 USc. Against the Aussie we are softer at 91.1 AUc. Against the euro we are little-changed at 55.8 euro cents. This all means the TWI-5 is now about 69.4, and basically unchanged again.

BITCOIN FIRMS
The bitcoin price has risen to US$62,859 and +1.9% higher than this time yesterday. Volatility of the past 24 hours has been moderate at +/- 2.3%.

Daily exchange rates

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Source: RBNZ

Source: CoinDesk

Daily swap rates

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Source: NZFMA

This soil moisture chart is animated here.

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94 Comments

by J.C. | 10th May 24, 4:07pm 1715314049

THINGS GETTING CHEAPER IN JAPAN?

The retail environment is so competitive in Japan that pricing is crucial. Put your prices up and you lose market share immediately....and maybe forever. I had personally warned P&G on this back in 2010 with regards to one of their brands. They're hanging on for dear life but shoppers still dictate their P&L.

Now, the Western mindset is hard to change. We believe the drunken sailor approach to spending and consumption is baked in. But the media and the consultants are finally starting to get it. CNN reports:

“The ‘budget conscious consumer’ is no longer just low- or middle-income earners. By far the starkest decrease in intent to spend is coming from the higher-income groups, and those that were previously the most immune to an economic downturn are now tightening their belts,” said Chad Lusk, managing director in global consultancy firm Alvarez & Marshal’s consumer and retail group. “Retailers should be thinking about targeted deals on higher-priced discretionary merchandise, too, to increase buying frequency.”

“A lot of retailers have said that discretionary spending is slowing. People are buying essentials, they’re also trading down in prices and then calling it a day,” Stambor said. “If you want to convince consumers to spend you have to give them a reason to do so. Lower prices are a clear opportunity to drive people into the store or online.”

https://edition.cnn.com/2024/05/05/business/retailers-cutting-prices/in…

by Pa1nter | 10th May 24, 4:15pm 1715314504

If your profits are 5-10%, you can only cut pricing so much, before you have to start rationalizing your product.

In the West, we've already been doing this for decades, by outsourcing to cheaper labour markets, and making lower quality products. Japan has added to this on their end, by making domestic wages stand still for the better part of 30 years.

I guess we just do all this even more?

by J.C. | 10th May 24, 4:20pm 1715314827

If your profits are 5-10%, you can only cut pricing so much, before you have to start rationalizing your product.

That's already the case in Japan. But they're the masters of being able to deliver a minimum level of functional performance. Case in point: Uniqlo.

And the trade-up opportunities in Japan are far better than in countries like NZ and Aussie.

Japanese discounter Daiso is moving into the US market because the Americans cannot do what they do.

by Pa1nter | 10th May 24, 4:58pm 1715317122

Daiso is a slightly better $2 shop, like Kmart, and you can get comparable clothing to Uniqlo a bunch of places, like H&M. Both of those Japanese companies are basically targeting a space in between the cheapest of the cheap, and higher quality established marketed brands, who's head office costs (think design, R&D, advertising and marketing) add significantly to the final sticker price.

Demand for them will increase, as disposable incomes wane.

by J.C. | 10th May 24, 5:00pm 1715317203

Daiso is a slightly better $2 shop, like Kmart,

No. Daiso is not a $2 shop. It is a private company and not listed on the TSE. It started with a standard prices of JPY100 and has been involved in the development of 100,000 products. Daiso controls production through supply chain to retail.

by Pa1nter | 10th May 24, 5:03pm 1715317421

I know what Daiso is dude. I'm talking about their products. As you just pointed out, they started as a Japanese equivalent of a $2 shop, just rather than assembling a bunch of cheap knick knacks from a variety of manufacturers, they do everything in house - like what Kmart/Anko has morphed into.

by J.C. | 10th May 24, 5:21pm 1715318516

I know what Daiso is dude. I'm talking about their products.

Then you would know they're not a "$2 shop."

by Pa1nter | 10th May 24, 5:43pm 1715319837

So you'd put a $10 Daiso fry pan up against a Le Creuset then?

My point is that their stuff is slightly better quality than a $2 shop, but it's still fairly disposable.

It's cheaper for a reason, some of it's reduced overheads like I mentioned above, and also because it's lower quality - definitely not Toyota level.

Most people use the sticker price as the primary determination of "value", because it involves a lot more understanding to differentiate the inherent quality of one similar item over the other. It's why people buy 3 cheap USB cables a year, instead of spending twice as much on one that'll last as long as you can still remember where you last put it.

by IT GUY | 10th May 24, 5:41pm 1715319702

Le Creuset is IMHO not that great .... I rate there pots and casserole stuff but there fry pans.... we buy Briscoes and turf every year... only way to get non stick, it just does not last..... Anyone whop said went to the moon on this tech knows we not going back on it (side note : we never went)

by Pa1nter | 10th May 24, 5:45pm 1715319934

You get the general drift though, right?

Non stick is a bit of a fools game, buy cast iron, learn how to use and care for it, and use it for life.

by mfd | 10th May 24, 6:15pm 1715321738

+1 for cast iron, better product and lasts essentially forever. You can also get them up to the temperatures you want for a decent steak, for example.

Good exercise hauling them around too

by IT GUY | 10th May 24, 6:47pm 1715323621

The biggest thing about le C is that its very heavy for old people... I am not there yet , but can see in with in laws.... they are 80 cannot lift it empty

another view, they are lucky to be living independantly

by EdwardD | 10th May 24, 6:58pm 1715324327

Agree. We have had our cast iron LC pans for over 35 years and still look amazing.

by jeremyr | 10th May 24, 7:09pm 1715324981

Yep. They are miles better than non stick. Just treat them right.

by E46 | 10th May 24, 11:25pm 1715340307

Carbon steel is my favourite.

by pigeonbox | 10th May 24, 10:01pm 1715335261

IT GUY: you genuinely believe the moon landings were a hoax? Is climate change a hoax too? Is the earth really flat?

I just cannot believe how dumb we're all getting.

by Zwifter | 10th May 24, 10:07pm 1715335652

The moon landing was a hoax mate, cannot wait for the Chinese to get there first and discover there was no evidence of a moon landing, still the USA will just say the Aliens stole the rover and took it for a joy ride, people are dumb enough to believe that.

by pigeonbox | 10th May 24, 10:26pm 1715336803

Yes, and the Indian space research agency, which captured images of the Apollo landing sites from its moon orbiter, and all the equipment exactly as it was left in the 1970s, as well as tyre and boot prints, and made those images freely available online, was all in on the conspiracy too, 50 years later, right? Along with the tens of thousands of NASA employees, blah blah blah.

I love a good conspiracy theory but this one is just so inane and boring. Honestly.

by Zwifter | 10th May 24, 10:04pm 1715335458

LOL tell me you do not cook on Teflon do you ? Just buy some decent ScanPan all stainless, it can even handle the heat of gas and it basically lasts a lifetime. Add a small amount of olive oil and away you go.

by J.C. | 10th May 24, 6:09pm 1715321348

So you'd put a $10 Daiso fry pan up against a Le Creuset then?

You don't understand Daiso's business model. Their customers use them for what they consider to be "low involvement" purchases where price is a key driver. A Daiso fry pan can be very appealing to someone who doesn't have the need for a Le Creuset fry pan. Similarly, an audiophile doesn't buy headphones at Daiso.

by Pa1nter | 10th May 24, 6:24pm 1715322246

I totally understand Daisos business model. It's not unique to them.

by J.C. | 10th May 24, 6:50pm 1715323848

Daiso created their business model. It is unique to them. Nobody has replicated their business model. The company has been around since the 70s.

by Pa1nter | 10th May 24, 6:55pm 1715324129

So no other company runs retail stores using their own label, cheaply manufactured goods?

by J.C. | 10th May 24, 7:19pm 1715325599

Not like Daiso. In fact their whole with the discounter brand and retail model is a product of meeting market demand in a deflationary environment.

by Pa1nter | 10th May 24, 8:46pm 1715330796

So their point of difference is their primary market is deflating?

by J.C. | 10th May 24, 9:32pm 1715333542

In their own words:

"We hold to the idea of the everyday low price providing infinite power to improve people's lives. We want to improve people's lives through the exciting discovery of our high-quality, innovative products"

by Pa1nter | 10th May 24, 9:51pm 1715334681

Fairly standard marketing speak for a low cost producer/retailer.

You still haven't explained what's proprietary about their business model, there are similar firms the world over, just most don't exist in an economy like Japan's.

by Speedmax | 11th May 24, 11:42pm 1715427774

Just checked…JPY100 = USD 0.64 currently. So more a $1 shop than $2. Whether private or publicly owned isn’t relevant. I shop there sometimes too but prefer Muji (different I know)

by Flying high | 10th May 24, 4:37pm 1715315823

Fruit and veg getting cheaper in NZ ... from RNZ

https://www.rnz.co.nz/news/country/516263/cheaper-fruit-and-veges-due-t….

Idyllic growing conditions have led to fresh fruit and vegetable prices dropping 25 percent compared to this time last year - and they are now at prices not seen for several years.

by J.C. | 10th May 24, 4:43pm 1715316190

Produce prices in NZ are obscene considering we consider ourselves a food-producing nation and our small population.

But our reliance on the Ponzi as the be-all-and-end-all has meant that we are a high-cost nation across supply chains, etc.

There's no way you can really get proper economies of scale with this.

by Pa1nter | 10th May 24, 4:51pm 1715316661

Produce prices in NZ are obscene considering we consider ourselves a food-producing nation and our small population.

They're actually super rational, given our wages.

There's a reason you can get a tin of Italian tomatoes for $1, and it's mostly down to the fact much of it is farmed and processed by illegal migrant labour, sleeping outside, with absolutely none of the protections and entitlements of an Italian citizen.

We're half way there by using RSE workers, but even those are still significantly more expensive than using under the radar refugees.

I make it a habit to look thoroughly into food prices anywhere I go, and the only common denominator when things are significantly cheaper than NZ is the people producing it are being paid next to nothing.

by J.C. | 10th May 24, 5:04pm 1715317453

They're actually super rational, given our wages.

As I explained, we are a high-cost country because of the Ponzi. Read Werner's Quantity Theory of Credit.

by Pa1nter | 10th May 24, 5:16pm 1715318192

Or Richard Cantillons essay on economic theory (centuries older, still relevant today).

It's not the only reason though. Being a developed western nation, there's a political will there to constantly ratchet the cost of labour via mechanisms such as routine minimum wage hikes, and ever increasing worker entitlements like increased sick pay, public holidays, paid maternity leave, ever escalating health and safety rules and regs, and a whole host of labour inflation mechanisms. Cheap food production either has none, or much less of all of those.

If we all accept much lower incomes, our domestic goods will be cheaper to produce. It's all relative. But then our imported goods, will also be more expensive.

by J.C. | 10th May 24, 5:24pm 1715318643

Explain to me why produce on the whole is generally quite affordable in Japan compared to NZ. Japan does not have a reputation as a primary food producer.

by Pa1nter | 10th May 24, 5:53pm 1715320399

Economies of scale, much cheaper retail overheads, and close proximity to a very large pool of cheap labour.

Probably why you said "on a whole", because if people think NZ fruit and veges are expensive, much Japanese produced fruit (and to a lesser extent their veges) are next level expensive, more like luxury goods - their agriculture is often less mechanized than ours is.

by J.C. | 10th May 24, 6:15pm 1715321720

Economies of scale, much cheaper retail overheads, and close proximity to a very large pool of cheap labour.

You cannot have what you mention if you're over-allocating credit towards consumption and the Ponzi.

Japan`s domestic industrial and retail structure is cut-throat competitive. Also, the Japan Agriculture Cooperative plays a key part in expertly balancing fiscal support for producers while preserving the peoples` purchasing power.

by Pa1nter | 10th May 24, 6:36pm 1715322986

You cannot have what you mention if you're over-allocating credit towards consumption and the Ponzi.

If you're talking about the exert of my comment you quoted, we can't obtain it regardless.

I can't think of any country with high wages and super low food costs that doesn't have them supported by cheap labour providing it. But feel free to give me some.

by J.C. | 10th May 24, 7:24pm 1715325866

I can't think of any country with high wages and super low food costs that doesn't have them supported by cheap labour providing it.

Wage pressures are lower in low-inflation environments. The reason being that share of wallet allocated to basic needs (food, shelter, transport, power) is not stretched.

by Pa1nter | 10th May 24, 10:54pm 1715338468

Sure. But that doesn't change the reality that food costs in any given territory are extremely relative to the incomes in the territory. They rise (and sometimes fall) in rough tandem.

Japanese groceries are "cheap" when you're looking at them as a dollar or euro earner, but not if you're earning yen.

Your view is kinda muddled on Japanese consumer pricing. On one hand, you're aware it's a deflationary environment, with flat (or negative depending how much you want to factor in inflation) wage growth. Then on the other, you praise Japanese businesses for low food and consumer item pricing, when their economy is dictating prices, not the businesses actions or business models.

Otherwise if it were down to any inherent difference in approach, Japanese manufacturers and retailers would be able to own much of the global market in these sectors. Daiso would upend the likes of The Warehouse, and we'd all be shopping at Seiyu instead of Countdown and New World.

by Te Kooti | 10th May 24, 5:24pm 1715318678

Is that the "Royal We"?

by Pa1nter | 10th May 24, 5:36pm 1715319382

It's the we that somehow thinks we can have super high wages, and super cheap stuff. It's not really a realistic position, which is why it's been accomplished for nearly 40 years by finding some other poor wretch being paid a fraction of our wages, to make our stuff.

by Advisor | 10th May 24, 6:10pm 1715321407

Cheaper housing would make a far bigger difference to our wallets but there are more people with vested interests in that market remaining dysfunctional than a few hundred owners of supermarkets around the country.

For that reason, increasing real estate prices in NZ is met with a lot of fanfare!

by ChrisOfNoFame | 10th May 24, 6:09pm 1715321366

"They're actually super rational, given our wages."

Production = Land + Labour + Capital + Entrepreneurship

Why not given our Capital ...or Land ... or Entrepreneurship?

Bur sure ... Blame Labour. All the others are working perfectly. /sarc

by Pa1nter | 10th May 24, 6:29pm 1715322596

I produce a nominal amount of produce, only in the hundreds of tonnes annually. But work in with and are pretty well versed in doing it on much larger scales, think hundreds of millions of dollars.

We've made some massive strides on the entrepreneurship level at mechanism and automisation across many aspects of production in NZ over the years. What used to take a couple dozen people days to do, can now be done in mere hours by one machine (plus driver and running/maintenance costs). Robotics involved in processing and packaging. Drone involvement in crop inspection.

But the technology and capital curve gets steeper the further we are going, much of the remnant human involvement is incredibly complex to automate. And that remaining labour, is fairly expensive to provide. So the costs for us to get there, will struggle to compete with overseas competitors who can throw endless amounts of indentured labour at the same function. You can get a lot of cheap labour overseas for the same costs as a $750k harvester.

I'm not "blaming" labour, just highlighting the dynamics we're dealing with. Makes sense?

by ChrisOfNoFame | 10th May 24, 6:58pm 1715324315

"Makes sense?"

None whatsoever.

by Pa1nter | 11th May 24, 4:25am 1715358310

I'm not sure then how I can explain the nuances of agriculture/food production to you in any other way. Regardless, there's a lot more dots involved than your rather simple, arid equation.

If there's a business case to evolve production, it generally gets done. The extra steps involved to replace more humans often either don't exist, or don't have an economic rationale relative to the cost of labour, or the costs to implement.

You do understand the concept for selling something for more than it costs you to make, right?

by redcows1 | 10th May 24, 6:15pm 1715321741

This time last year we were 3/4 through one of the wettest most miserable 12 months growing period ever so 25% down perhaps not so good.

by Foxglove. | 10th May 24, 4:37pm 1715315879

Hydrogen.In the 1960s there used to be pub talk, a la conspiracy theories of the time, about the bloke who could make cars run on water, but he had been bought off and “silenced” by the oil barons and associates (ie millionaire, nasty people.) Nobody then actually thought to think about the science involved though. Just one of those things to keep the usual babble & swill going until 6pm closing. Maybe though, the method in the madness is crystallising?

by Grattaway | 10th May 24, 4:12pm 1715314355

PDK will be rapt that a new energy source is coming so we no longer need fossil fuels

I know it has been troubling him greatly

by mfd | 10th May 24, 5:20pm 1715318416

In most cases, hydrogen is not an energy source. It's a method of storing and transporting energy - you still need to source that energy from somewhere else.

The exception is naturally occurring 'white hydrogen', but that's fairly speculative at this time in terms of scope and usability.

by IT GUY | 10th May 24, 5:43pm 1715319793

we will have to rename that, its racist

by mfd | 10th May 24, 6:31pm 1715322718

Wait till you hear about Brown and Black hydrogen

https://www.ricardo.com/en/news-and-insights/insights/hydrogen-colour-c…

by Harvey W | 10th May 24, 7:07pm 1715324857

I don't think PDK (Chicken Little) wants a solution...

by jeremyr | 10th May 24, 7:14pm 1715325253

Never a truer word spoken.

by ChrisOfNoFame | 10th May 24, 6:16pm 1715321790

"The exception is naturally occurring 'white hydrogen'..."

How about calling the H2 that is produced from renewables "clear hydrogen'? I.e. one can have a relatively clear conscience from consuming it.

by Baywatch | 11th May 24, 7:51am 1715370688

I think he would be more troubled about the space he takes up in your head?

by solardb | 10th May 24, 4:44pm 1715316240

The problem was the energy needed to split the hydrogen out of the water . Where does it come from in a car???

Its always been doable , just not practical.

by JohnfromtheTron | 10th May 24, 4:57pm 1715317069

https://www.hiringaenergy.com/post/hiringa-bringing-the-power-of-clean-…

by ChrisOfNoFame | 10th May 24, 6:01pm 1715320869

"Nobody then actually thought to think about the science involved though."

Nobody? Seriously?

Please don't add to these conspiracy theories.

EVERYONE with the nous to look at the science looked! Oil just needs to get more expensive and H2 was viable.

(Far too many looked the other way while oil was kept 'cheap' while many developing countries stayed in war and turmoil so 'oil' could stay cheap!)

by Foxglove. | 10th May 24, 6:41pm 1715323310

Why on earth would you think to take that so far out of context? Nobody present thought idle talk amongst a group of pub drinkers sixty years ago was the ideal platform for the development of sophisticated scientific theory although, Monty Python might have developed the discussion as a segment.

by IT GUY | 10th May 24, 4:54pm 1715316890

Its starting to feel like a recession......

by Pa1nter | 10th May 24, 5:04pm 1715317482

Sung to the theme some of "it's beginning to look a lot like Christmas"?

by Foxglove. | 10th May 24, 5:17pm 1715318234

Daresay, more likely Milligan & Co. “I’m walking backwards to Christmas.”

by solardb | 10th May 24, 5:19pm 1715318369

ATM, I feel like its like the govt is singing the sex pistols version of "I did it my way".

by Foxglove. | 10th May 24, 7:26pm 1715325990

As previously posted have little interest in political polls especially so long before an election is scheduled but just for entertainment, and for the first time in a long time, will tune in to TV One new tonight to discover whether or not the news editor that caused all the fuss over the Talbot poll recently is going to screen a similar fervent presentation in the direction of the entirely different perspective that the Curia poll published today. Given her subsequent profound assurances of balanced reporting and unbiased political motivation, if nothing else it should be a good watch as it does seem hard to find worthy entertainment, all that often.

ps. Watched the news programme accordingly and there was no segment about that that poll at all. In truth, that was the most enjoyable part about the whole presentation.

by IT GUY | 10th May 24, 5:45pm 1715319906

What a larf stuff next to go on headline.... NACT may be able to govern on latest poll.......... like really I think they have a legal ability to for a little bit yet...

by jeremyr | 10th May 24, 7:42pm 1715326928

That’s correct. They don’t report the Curia poll (taxpayers union) or the Roy Morgan one. Both more professional than the 1news or Talbot Mills (Labour Party poll). TV3 and 1news both talk about the rubblish polls, as we have clearly seen.

by Foxglove. | 10th May 24, 7:57pm 1715327834

That’s the point that is really concerning, If it is sensational news that a poll has indicated that the elected government is going to be out of office on or before the next election why then is it no news at all that a subsequent poll indicates that that government, is not actually, at this point at least, under any such threat. Some questions have to be asked. The state funded broadcaster has a statutory duty to broadcast and present factual and unbiased news.

by solardb | 10th May 24, 8:24pm 1715329454

Tv3 only reports the reid research poll , tvnz only reports the Verian poll. Way its been for ages , its more of a competition thing than a political thing.

by agnostium | 10th May 24, 8:32pm 1715329957

by Baywatch | 11th May 24, 7:52am 1715370752

Back on the track apparently

by solardb | 10th May 24, 5:17pm 1715318236

Hatchet job on Kiwirail, no mention that most of the costs are for earthquake and flood resistance, who is going to pay for that?

https://www.nzherald.co.nz/nz/government-releases-documents-behind-deci…

by kiwikidsnz | 10th May 24, 5:45pm 1715319914

In the case of the Kiwirail ferries most of the associated unbudgeted costs result from their self serving poison pill decision to firstly presume rail capacity was required across Cook Strait.

Bluebridge has demonstrated that is incorrect & doesn't require a taxpayer subsidised business model.

by IT GUY | 10th May 24, 5:47pm 1715320038

agree we can simply offload onto custom trailors or ship via crane containers....

ok stock units there is an issue, we need an options paper this is a total shambles bring in PWC or EY for 1bil they can sort it out

by solardb | 10th May 24, 6:02pm 1715320928

And 100 tonne locomotives, and specialist non containererised freight?//

The issue is the time it takes, rail already lags roads speed because its still running on 1890's alignments. The main auckland - CHCH route is where rail can compete with road for general goods. but no if you add a couple of hours each end to transload.

the rail loading of the ferries is actually quite efficient , they beat the loading of trucks and cars. But then they have to get to Wellington yard , assemble into a train and go .If the railway alignment was improved so rail was time competitive , it would be viable to have the string of wagons come straight off the ferry , and onto the mainline north .

by Pa1nter | 10th May 24, 6:11pm 1715321471

The main auckland - CHCH route is where rail can compete with road for general goods.

The question begs if there's a port in Auckland, and one in Chch, whether there's a decent business case to overland goods between the two.

by kiwikidsnz | 10th May 24, 6:28pm 1715322504

by solardb | 10th May 24, 6:28pm 1715322514

That would be the cheapest and most energy efficient way , and Kiwirail organised a service during the Kaikoura rebuild , but it can't compete timewise.

Incredible what our J.I.T distribution systems , based on anywhere in the country in 24 hours , actually cost us . Especially now with couriers , overnight can be up to a week .

by IT GUY | 10th May 24, 6:50pm 1715323856

NO the decent couriers fly stuff they are great

by Pa1nter | 10th May 24, 5:47pm 1715320050

The commercial case for rail over water sucks, but the optics are priceless.

by kiwikidsnz | 10th May 24, 6:18pm 1715321910

priceless ≠ costless

by ChrisOfNoFame | 10th May 24, 6:21pm 1715322095

Please explain. On it's own - your comment is meaningless tosh.

by Pa1nter | 10th May 24, 6:27pm 1715322465

The improved efficiency of rolling the rail on and off a ferry over how it's currently done doesn't justify the cost.

Well, maybe in 50 years it might.

by solardb | 10th May 24, 6:30pm 1715322604

What cost are you talking about?

by Pa1nter | 10th May 24, 6:43pm 1715323401

The cost to upgrade Wellington and Picton terminals?

We're effectively talking about spending billions replacing the current system that moves containers and items using small loader vehicles and lifters on and off the ferry, with another system that does the same thing except the container is sitting on a rail cart.

That's not a substantive cost improvement.

by solardb | 10th May 24, 7:42pm 1715326920

No , the majority of the costs are there, whether rail is used or not.

The rail capable ferries turned out to be a good deal, sheer luck of ordering at the right time. Most of the costs are for earthquake resislence , and raising the whole area to allow for climate change. Plus new terminal for passengers.

Some years ago , NZR proposed ditching passengers and cars , and basically going to barges for the rail traffic, as is done in the USA , and most of the world outside Europe. I think it was at a time when new ferries were needed , and the govt was not stumping up . It is a option for them, although some years away, they will probably just keep rebuilding the Aratere for rail traffic, in the meantime.

meanwhile , we roll the dice on the existing ferries not doing a wahine , with no tugs capable of assisting them if they lose power in a storm. Same with bluebridge.

by Pa1nter | 10th May 24, 9:53pm 1715334811

The cost of the ferries themselves isn't the issue (and the existing ferries need replacing).

It's the cost of the required infrastructure to facilitate them.

by Baywatch | 11th May 24, 7:56am 1715370964

Was this explained by Willis to the country before cancelling the whole deal? Or did she just rave on about Corollas?

by solardb | 11th May 24, 12:03pm 1715385826

Have to say the advice from treasury to the ministers is pretty crap. They mention the earthquake resistance costs, then totally ignore it. They look at it from a business's case model alone, but obviously there is more infrastructure costs than business costs. They laud bluebridge, and ignore it has no infrastructure, using existing wharf.

Maybe kiwirail should have just handed the infrastructure over to the ports

Kiwirail made a hash early on, they have been replaced.

by solardb | 10th May 24, 5:54pm 1715320440

Probably because Bluebridge is not a railway company.

by ChrisOfNoFame | 10th May 24, 6:19pm 1715321998

It's kind of in the name, isn't it?

by MikeM | 10th May 24, 8:24pm 1715329478

Anyone care to predict where unemployment will be by year end? I think it will be higher than 5% at the rate we're going.

by HouseMouse | 10th May 24, 11:31pm 1715340706

Circa 5%.

One of the few upsides of having so many people coming here on work visas over the past 12-18 months is that many of them will become surplus to requirements and will have to return home. This will limit the extent to which unemployment rises

by IT GUY | 11th May 24, 7:28am 1715369286

That's a valid point. I am seeing lots of 50 year old's redundant, its sad be a while until new opportunities present for some.