Here's our summary of key economic events overnight that affect New Zealand with news that despite good economic data, Wall Street equity prices are tanking today as it dawns in investors they have been far too bullish on AI prospects.
[There will be no video version today.]
But first, there were July 'flash' PMIs released today. The American one is quite positive, especially for their service sector. There new order growth rose its fastest for the year, and that drove the overall PMI to its best result since April 2022, a 27 month high. The factory sector wasn't so positive, basically marking time. Encouragingly however, despite the rise, price pressures have waned. But there are suggestions employment has stopped growing.
Retail inventories might be becoming a bit of a problem however, up +5.3% from a year ago. But because wholesale inventories are well contained (+0.2%), there is no reason to panic at this point.
Meanwhile, things are not so bright in their housing markets. Mortgage applications fell last week from the week before to be -15% lower than the weak week a year ago, even though mortgage interest rates retreated and are now near their lowest of the year.
And new home sales came in quite low in June, well below anticipated levels. But this isn't a new situation. Overbuilding over quite some time means that they have a stunning nine months of inventory of new unsold homes at the current rates rate. The main problem area is in the North-East states.
American exports rose +4.0% in June from a year ago. Imports were up +3.0% on the same basis, meaning their merchandise trade deficit shrank a little. The still-rising import levels also means the healthy demand in the US economy is still the main driver of world trade.
There was another very well supported US Treasury bond auction overnight, this time for their 5 year Note. That delivered a 4.05% yield, down from 4.27% at the equivalent event a month ago. General market support for these debt issues remains impressive.
In Canada their central bank cut its policy rate by -25 bps to 4.5% at its overnight meeting, a second cut in a row. Another cut in September seems a live possibility. They say the reduced rates could contribute to a slowdown in mortgage and shelter costs, which have been a large component of inflation there.
Japan's July factory PMI actually slipped slightly below expansion levels to a very small contraction, an unexpected result of their Markit/S&P survey. But their services PMI went the other way with a solid expansion recorded for July.
In India, new orders and business activity surged in July, driving both their services and factory PMIs to very fast expansions. And that brought their best expansion of employment in over 18 years. But because these pressures have been rising for some time, they are starting to get strong inflationary pressures from them now.
India's soaring share prices, and the earnings growth by Indian companies have pushed this country to just under a fifth of the MSCI emerging markets index while China has fallen to a quarter, down from more than 40% in 2020. India is threatening China as the main emerging market.
South Koreans are increasingly confident, according to a survey released by their central bank. Their composite index rose to its highest level since June 2023. Consumer sentiment regarding current living standards rose, as did their future outlook.
In Europe, their flash PMIs show July sagged to a five month low. In Germany, while their service sector is still expanding a a good clip even if it is less, their factory sector is really struggling now and contracting at a rather sharp pace which will worry Berlin policymakers.
In Australia, their July PMI also recorded a weaker rise in services activity and a sharper decline in manufacturing production. Persistent demand weakness led to a second consecutive monthly decrease in total new business and the fastest fall in new export orders in nearly four years.
The UST 10yr yield is now at just under 4.29% and up +4 bps from this time yesterday. The key 2-10 yield curve inversion is very much less at -15 bps. Their 1-5 curve is slightly less at -71 bps. And their 3 mth-10yr curve inversion is holding at -112 bps. The Australian 10 year bond yield starts today at 4.37% and unchanged from yesterday. The China 10 year bond rate is holding at 2.24%. The NZ Government 10 year bond rate is now at 4.44%, and also little-changed from yesterday.
On Wall Street, the S&P500 is down a sharp -2.1% in Wednesday trade. Anything related to AI took a hit today, and the worst result was posited by Tesla, whose share price is down more than -10% so far today. Overnight, European markets were quite mixed with Paris down -1.1% while London was down just -0.2%. Yesterday, Tokyo closed down -1.1% and Hong Kong fell another -0.9%. Shanghai was down -0.5% in its Wednesday trade. Shenzhen fell hard again, down another -1.3%. Singapore was up +0.7%. The ASX200 slipped -0.1% in Wednesday trade but the NZX50 was up another +0.8% as the star of the show.
The price of gold will start today up another +US$9 from yesterday at US$2412/oz.
Oil prices are +50 USc firmer at just on US$77.50/bbl in the US while the international Brent price is just on US$81/bbl.
The Kiwi dollar starts today softish, down another -10 bps at 59.4 USc. Against the Aussie we are up +10 bps at 90.1 AUc. Against the euro we are down -10 bps at 54.8 euro cents. That all means our TWI-5 starts today at 68.4 and down -10 bps from yesterday.
The bitcoin price starts today at US$66,573 and up +1.1% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.2%.
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154 Comments
India this [sic] threatening China as the main emerging market. Yeah right!!!
Talk to an American via cell phone or Internet using US cell networks while they're driving, and you will realize how poor US telecommunication networks are. Ask them how much they pay for lousy coverage and you will be shocked again. The US not only denies its own population the best telecom services, they coerce nations around the globe to abandon cooperation with China to acquire the best telecom services for their people... Link
An uneducated guess. Too much saving lowers productivity (pushes stock prices up but for no new economic activity); too much capital inflows from offshore stifles local investment (profits are offshored); in summary, internal/domestic investment activity is of more benefit to an economy than domestic savings and offshore investment.
Just a guess!
Very interesting. You essentially suggest that overseas investment in the country is what we DON"T want? Sort kicks the legs out of what government has been telling us for years doesn't it? It also reinforces some of my views on what is needed for national resilience.
Thanks for your response. I wonder now if any of the experts will tell you you're wrong.
Too much saving lowers productivity (pushes stock prices up but for no new economic activity)
I can tell you that Nu Zillun stock prices have been going nowhere - the Ryman economy. Going gangbusters in Japan partly because of a weak yen. Also these Japanese companies are sitting on massive cash reserves.
Exceed the countries investment needs? My interpretation of this would be along the lines of:
- Income inequalities are due to the never-ending accumulation of assets, which becomes easier and faster as ones wealth grows. Companies buy out other companies and concentrate such as what is seen in the USA meat production industry for example
- Those with more assets hoard them and accumulate more, can live off of savings, dividens etc and thus savings accumulate further, especially in a down-turning economy where everyone is decreasing their spend and increasing their savings for fear of the future, and risk aversion
- A shrinking economy would relate to shrinking investment needs as: businesses fail due to lack of demand, spending decreases further and the wealthy only spend so much as a percentage of total spending in the economy vs the middle and low income workers, thus decreasing the investment needs and pushing savings above investment needs
I'd love to be further educated on this or corrected if my line of thinking is off. Sounds interesting
https://www.waikatotimes.co.nz/home-property/350341096/teenagers-buy-th…
Congratulations to this clever and industrious young couple. No need to wait too long before affording a home
Forget backpacking trips, going to concerts or heaven forbid, indulging in avo-on-toast weekend benders. You gotta sacrifice if you want to get on the New Zealand Property ladder! No easy feat. Seriously though good on them, they have bucked the trend of our seriously broken housing system.
We all have that one. I could have bought 10 acres over the fence in Albany from where we were living for $60K back in the day when I was earning $32K but who wants to do that at age 20, much more fun with cars and bikes and going out clubbing and having fun and spending $120 on three course meals and wine. As long as you pull your head in early enough it still all works out fine. If you have a failed relationship or two it will financially wreck you anyway. Probably easier to avoid the financial hits than to pick a financial winner.
It's a great achievement, good on them. But I didn't like this bit:
“We started dating in year 13. She was planning to go to uni, but I got her to stay and we kept saving together.”
We're only young once and I hope the young woman doesn't live to regret her decision.
And they have bigger financial fish to fry in the future. Buying their own Four Square, as a stepping stone to owning a New World supermarket, is in the 10-year plan.
“Buying the house is a step towards that to build up assets because you need quite a bit of cash to get into it,” Simmons says.
Charlie’s dad, Gerrard Simmons, who is a partnership manager for Foodstuffs, says he’s absolutely proud of his son.
Maybe not a typical kiwi couple, but good luck to them.
Agreed - good luck to them :) It's more ideal when, like what you've just done, posters first read the news report then repost the complete version instead of just getting excited over a title. It's often nothing more than click bait just to get subs.
This way, people are better informed.
Chances are, if they're not paying subscriptions here, they're not paying them there either😆🤣
While true, if it weren't Bruce and Don from Mainfreight it would've been somebody else. Let's not pretend they're revolutionary pioneers.
It was a heavily regulated sector that had the shackles removed in the 80's/90's resulting in huge growth.
https://teara.govt.nz/en/freight-and-warehousing/page-6
The end of regulation
The 1980s and 1990s saw significant change in New Zealand’s freight networks. Most importantly, between 1983 and 1986 the government removed the limits on long-distance trucking. The licensing system, which had controlled which goods could be carried and where, also ended.
Road transport
For trucking firms, deregulation opened the door to local expansion and entry into the Australian market. Long-distance heavy road freight flourished. Trucks had carried 49.7% of land freight in 1972; by 1993 this had risen to 81%.
Dumb luck is an element. The Government could have decided to heavily back rail instead of long haul road freight, and Don would probably be a small operator doing last mile deliveries around town.
Did Don create the demand for road freight, or did the market create the demand and divert their business his way? I don't doubt he worked hard, a lot of people work hard and don't make it. Are they idiots? Or just dumb luck didn't land on their lap?
$160k deposit, $720k house purchase. $560k mortgage. Both working at a supermarket. Either they're getting heaps of overtime, or money's coming in elsewhere?
I suppose if he's making $70k as a supervisor and she's making $50k, $4k per month mortgage is only 50% of their take home pay. So they have 50% left over to pay all other living costs AND save up to buy their own supermarket.
Good luck!
give me six months before I will collapse hehe
The interesting thing about our behaviour is the more you stick at something, the more of it you'll do.
Just as lying on the couch for an afternoon might make you lethargic and tired, being reasonably active makes it easier to be more active again.
So long as you can switch off the human tendency to gravitate towards lazy habits, you'll be fine.
Why the hell are we doing this?
[ Warning for other readers: this is just drivel. Ed ]
Its main driver is the hysterical myth of a climate “emergency”. That too has to be left behind. It is a perfect example of mass insanity (think Salem witch trials) that so much of our society and its leaders think it is wise to continue down this path.
I follow the science Audax not a rabbit hole conspiracy loony pro russian stooge any day.
The more important question is WHY is he being allowed to post this stuff? The publisher of this website came on strong a few days back (rightly) saying he was not going to tolerate conspiracy theory posts on the US election cycle (Trump had just been shot at) - and indeed months ago he also clamped down on the fringe anti-vax conspiracy posts. Why then are we still seeing posts like Audaxes when the reality of man made climate change is staring us in the face? Graphs like this don't lie............https://climatereanalyzer.org/clim/t2_daily/?dm_id=world
are you serious? have you not seen what x.com was before and the reason it was bought, say whatever you want... but other people are allowed to say what they want also.
depends if you actually know what is contributing to it, IMO its hard to tell weather its because of human contribution that Global warming happens or if it's a natural and inevitable cycle of earth, personally i do not know and i also don't believe everything that people, for all we know we are just getting closer to the sun?
I think there is some level of human contribution but i think its small and we are just slightly accelerating the process.
" IMO its hard to tell weather its because of human contribution that Global warming happens or if it's a natural and inevitable cycle of earth"
Yep, those pesky cars and factories in 1850BC really put out some Co2, just because it happened once a long time ago doesn't mean it could happen again, obviously.
The science is settled then, have fun owning nothing and being happy.
OK have a look here https://unlimitedhangout.com/ they cite all their sources.
"for all we know we are just getting closer to the sun"
I can guarantee that there are teams that are very aware of exactly how close to the sun we are and how that distance changes. You can be sure that someone would have picked up on that as a contribution to warming - I suspect the difference over the human timescale we are dealing with is infinitesimal.
At least you are honest admitting your complete ignorance on the subject, but that makes me wonder why bother posting?
Milankovitch (Orbital) Cycles and Their Role in Earth’s Climate
https://science.nasa.gov/science-research/earth-science/milankovitch-or…
And, of course, Why Milankovitch (Orbital) Cycles Can’t Explain Earth’s Current Warming
https://science.nasa.gov/science-research/earth-science/why-milankovitc…
HSBC bans all payments to cryptocurrency exchanges.
https://www.hsbc.com.au/help/security-centre/cryptocurrency-payment-cha…
Such a caring bank ...very good to deal with - not?
So, over a decade since some lessons were learned. There's some Govts with worse ethical performance.
Although not my main bank (I have an HSBC Oz account for use when I'm regularly there) i've usually found HSBC to have an excellent customer focus that isn't typical of other main banks, their Fx rates usually a click above & mortgage rates a click below as well.
Although Ive never been interested in cryptocurrency I linked the payment policy change because I wondered how many other banks have/would do this.
Even your purchases, let alone investments:
Western developed countries only have higher living standards from extracting from lesser fortunate countries. One could argue if the British never colonised, they would never have been able to extract such wealth in resources from other nations and hence we would not be the country we are today.
What resources did they extract? Why didn't the countries they were extracted from use them ahead of time to industrialise?
If you're actually interested in learning and understanding why it was the scientific and industrial revolutions occurred in Europe, why this led to Europe going from being an economic backwater to the global economic power, and how this translated into industrial power that allowed for empire, here are some good books:
- Clocks and Culture, 1300-1700 - Carlo M Cipolla
- Guns, Sails, and Empires: Technological Innovation and the Early Phases of European Expansion, 1400–1700 - Carlo M Cipolla
- Civilisation and Capitalism, 15th-18th Century - Fernand Braudel
A starting point is to understand that European imperialism occurred in two distinct phases.
The first was into the Americas, the second was into Asia/Africa. The American expansion occurred much earlier and could only happen due to disease wiping out the native populations. The colonialism that occurred in Asia/Africa happened centuries later only after a technological advantage allowed European powers to defeat sophisticated (but pre-industrial) Asian powers in war. You'll also note that the two other major European powers in the Americas (outside Britain and France) were the Spanish and Portueguese who had far more limited empires in Asia/Africa because they industrialised a lot later than Britain and France. Lots of reasons why that is but "they stole all the resources" wasn't the reason. If "stealing resources" is what led to industrial power then the Spanish should've been the leading industrial power early or pre-industrial empires in China/Middle East/India should have been able to industrialise as well. Then of course we have the real world examples of countries with extremely limited natural resources like Japan/South Korea being industrial powerhouses. While countries with hugely abundant resources like the USA having consistently decreasing portion of the world's manufacturing base.
The industrial power is what ALLOWED European nations to pursue the colonial policies in Asia/Africa. The colonial policies weren't the cause of the economic/industrial power.
Seriously, the world of economics is batsh*t crazy. We have businesses going to the wall (or into deeper debt) because consumers won't pay the prices that businesses have to charge to cover their costs. Even the geeks at Stats NZ have spotted that the main driver of higher costs is debt servicing costs. So, what do the very serious economists say? That businesses are still not moderating price increases enough, so we need to keep interest rates high!
As noted in the comment above on Canada (mortgages and rents), the quickest way to bring CPI down now would be to lower interest rates so that businesses can reduce prices to levels that consumers will pay. Then perhaps we can get on with working out how we get out of this tailspin that has 18 months of momentum behind it.
Businesses, individuals, the dipshit greedy human race, should firstly take responsibility for taking on massive debt. Interest rates are not the problem. It is the DEBT. An acquaintance of mine was recently championing a finance company deal of 56 months interest free. His eyes lit up just talking about it. I explained to him that he still has to repay the debt. Debt is debt. He went all quiet.
Pretty much. There's some more recent buyers that'll getting hurt which is unlucky timing.
But so much of our society continually borrows up to the hilt, often on expensive symbols of luxury. And in times like this where they come unstuck, that makes everyone else feel it too.
We were always getting this lesson, sooner is probably better than later.
But the sooner should have been 2008 or before.
Seems to me there's only the luck of timing between winners and losers from doing exactly the same thing. Biggest thing for me is the majority of society looses in the end due to the high burden of debt, except the banks.
2008 the bailouts and QE were as helpful as popping two No-Doz, and starting on another box of beer, at 3am after the party was starting to crash. It will work for a while, but the hangover worse and the recovery longer. It would have been far better to allow the crash and work with a plan for recovery than carrying on BAU for many.
Yes, here's the net bank money creation per day data for the last few years. Private debt can only reduce if private bank balances reduce (or Govt deficit spends). Total private debt is roughly the same as total NZ bank balances ($550bn). If we paid off all our debts, we would have no money.
The problem jfoe is not high interest rates. It's high debt level.
To solve the problem, get rid of the debt. Yes it's hard work.
The magic of the exponential curve applies, in this case it's downwards. At first it's a gentle slope, then your debt level falls off a cliff.
Yes, high private debt is absolutely the problem. Since 1990, our whole bloody economy has relied on private debt levels increasing in real terms by 4% to 5% per year. That flow of credit money has directly enabled the surpluses that businesses have generated (profits), provided the cash for savers to save, and kept our GDP growth at around 3% (GDP is basically a measure of the surplus generated by new bank loans being higher than loan repayments).
So, yes, let's reduce our private debt. But doing that will mean negative GDP and reducing private sector bank balances for the next few years. or a huge transfer of private debt to the Govt balance sheet (the reverse of what we did between 1990 and 2008). Are we ready for that?
It is important to remember that it was a different world then...we liberalised banking because thats what the worlds major economies were doing and we wanted (needed) access to the goods we could not provide ourselves. We still need access to many of those goods/resources and consequently are loathe to becoming an outlier in respect of 'playing the game' by the rules set by the major players so its not simply a case of reintroducing capital controls...there are however policies that could be adopted that would moderate the impacts of the free movement of capital, but we appear unable/unwilling to implement them.
It doesn't really matter if we are ready for it or not now. It's coming. The only questions remain "When?" and "How bad will it be?"
(In the 80's I joined the trading room of a brand-new start-up bank. And when I naively asked "Where are we getting all the money from to do all of this?" the MD just laughed and replied "You'll see" and I did. We borrowed it all from other banks, who created it and lent it to us. Wonderful things, credit lines. (NB: When that endeavour ultimately sank under the weight of Russian Debt gone wrong, he left to reconfigure Hill Samuel into...tada... Macquarie Bank, and do the same all over again)
But that aside. Yes, to all of your points above, but what are we doing about it? Nothing. And that's why whatever we are doing is going to continue - until it can't.
https://en.wikipedia.org/wiki/Australian_Bank
And yet in your first post your infer that the solution to our current problem is the reserve bank not dropping the OCR (current interest rates are causing high debt servicing costs which are being passed into consumers).
But if the RBNZ drop rates, people/companies will just start taking on more debt again which solves absolute nothing. At the next spike in oil prices we are back in a hole again. In my view we need private debt evens to be far lower than they currently are (as avoid ever handing out mortgages at such low rates again).
I agree.
But I don't see any reason to think that the banks want to curb housing lending. The RBNZ has tools but no obligation to use them, and they're set at very high levels. And while we're starting to see real recessionary signs, I don't think the Kiwi confidence in housing as a can't-lose speculative investment has taken a hit, at all. It's all 'waiting for the market to turn' - complete confidence that price will always rise.
So I say, keep the screws on. It's stupid that this is the mechanism we have when it causes so much collateral damage, but it's our own damn fault.
I agree with everything you have said in your posts today. Regarding your option I don't believe we will accept a massive depression (because that is what a negative GDP means for a few years) but a transfer of the debt to the government and RBNZ balancesheet is also not an option with the current type government which I expect will remain in power for a couple of more 3 year periods. What else is out there?????
jfoe,
What u are describing is a form of deleveraging. This does not necessarily need a deflationary process.
Dalio describes 4 ways that deleveraging can occur... chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.bridgewater.com/big-debt-crises/principles-for-navigating-b…
Dalio describes what he calls ..."a beautiful deleveraging "... and which is the most unlikely .
So... we live in a Political economy.... so there will never be an intelligent economic/fiscal policy decision that involves foresight.. Real change does not seem to happen....until we kinda hit the brick wall.
One of the best ideas on deleveraging I have come across, is from Steve Keen... ( the most fair method I've come across... so far) https://www.interest.co.nz/news/104502/debt-jubilee-universal-basic-inc…
Not thinking of transferring debt to the government jfoe. I envisaged the government getting rid of it's debt also.
I guess the ole double entry means the offshore balance changes.
But to get the gain, which would be marvellous, means some pain (aka 'work').
And that we will not do.
Hmmm ....
Jfoe: "So, yes, let's reduce our private debt. But doing that will mean negative GDP and reducing private sector bank balances for the next few years. or a huge transfer of private debt to the Govt balance sheet (the reverse of what we did between 1990 and 2008). Are we ready for that? "
Something of a false dichotomy there, Jfoe.
There are other ways to reduce private (and public) debt without the nihilistic outcome.
We could, for example, pull back on imports and expand exports. It's amazing what a long term trade surplus does to an economy - a constant injection of new money without an increase in local debt.
Yes, I agree on the trade - but that's a long-term shift, right? We would need to dramatically reduce our imports of oil and cars ($20bn) and billions of dollars of fertiliser. What could we export in the next few years that would get us anywhere near the billions required?
When I take a trend of the 2Y and 10Y bond yields over the period between Aug 2000 and Aug 2008 my conclusion is that current %rates are low compared with what they were during that period. My conclusion is, it is not the %rates but the insane levels of debt everybody accross the economy has been taken up since the GFC what is driving the current misery. Secondly there is not enough earning capacity within the New Zealand economy to service those %rates without affecting other spending and jeopardizing the economy. Some countries, Denmark, Switzerland, The Netherlands, Taiwan, South Korea and a bunch more do have that capacity because they produce products the rest of the world is prepared to pay for. The common factor of those countries are high exports to GDP (all above 70%), trade surplusses and a very high business driven scientific environment. Compare all of that with what is going on with New Zealand: only 25% exports to GDP, forever yearly trade and account deficits although some months are surplus, we reduce spending on science and research.
Tree farmers are going to need an ETS pay rise. A few weeks ago it was discovered light alone can cause evaporation, now we find out trees are net methane sinks.
"Sometimes we found a little methane emitted from the tree bases, but the higher up the tree we went, (> 1m above the forest floor) we observed something unexpected: Methane uptake from the atmosphere resulting in a net tree methane sink.
It also turns out that there’s about as much tree stem surface as there is total land surface.
Ultimately these procedures allow us to suggest that trees may contribute 24.6-49.9 Tg of atmospheric methane uptake globally. Similar in size to the only other land-based sink that we know of."
https://x.com/GauciGauci/status/1816129071321063694
https://www.nature.com/articles/s41586-024-07592-w
https://phys.org/news/2024-04-vaporize.html
Bless. Then there is Jfoe, pontificating about "methane clouds" - who up until a few weeks ago didn't even know NZ was a net CO2 sink.
Let's run out and design a tax system to hammer fuel and electricity users, and enrich Swedish furniture companies and Austrian aristocrats. All without knowing, at the most the basic level, about modelling clouds, solar evaporation and methane sinks.
"However, data-driven global modelling efforts tend to overestimate emission sources by about 151 Tg yr−1 when compared to smaller atmospheric ‘top-down’ derived estimates2, possibly suggesting that a substantial terrestrial CH4 sink term is either poorly quantified or missing from the global CH4 budget."
Now, as the Government gears up to deliver a formal apology in November, it could also be staring down the barrel of paying out redress to the tune of $217 billion, according to estimations in the commission’s report.
Meanwhile, the commission found the state and faith-based institutions have covered up the systemic abuse and neglect across decades and successive governments.
The commission concluded that in many cases, state care became a pathway into gangs and into prison.
These people are broken. They could not manage a windfall - it would soon be syphoned off by their equally dysfunctional acquaintances and hangers on.
The answer might be they will be that they receive priority access to support services rather than cash. But many will be beyond help - such is the tragedy.
That is a complete lie that Luxon and his government continually trot out. Almost everything they do is about 'the amount of money'. Their main focus while in government has been to tell almost all government services - cut back 5% of your budget. While at the same time buying landlords their dignity with 3 billion dollars. They just try to put people off track by saying it isn't about the money. They say they have trouble recruiting enough police staff and it isn't about the money. While fighting tooth and nail to limit their salaries.
The Police Force is at a Tipping Point. As much as most young cops enjoy The Chase, the salary is significantly low. You can leave your stressful, depressing, dangerous job in the Auckland Police and go work for the Auckland Council (doing, let’s face it, f… all) for the same money. It’s not Mastermind.
The Police do not pay to be educated (unlike teachers, nurses etc) therefore I resent that they re-locate to Aus and the Aus taxpayers are benefitting from millions of NZ tax payer dollars invested in these folk.
We are a free Police training academy for Aus. Ditto the fire service.
The Govt need to confront this financial drain urge urgently.
Actually i think what Luxon is saying is that they will do what ever is needed to compensate the victims here.
Plus "Boot camps" is a bit of a misnomer. Rather they are structured courses designed to teach some discipline and build useful skills. The alternatives are likely just prison which is not good. Otherwise these kids are literally running feral in the community with no consequences. Careful monitoring and supervision will be required, and the shrinks will tell you that most if not all will push and rail against the boundaries, but that doesn't mean they are bad. How do you teach children and young adults discipline when their life has been crap so far? Most of them have no trust for good reason.
At $ 500k a kid , they could have 2 supervisors constantly monitoring them for 1/2 the price. Or someone to guide them into a job , better life etc.
It was just a silly and unnecessary thing for Luxon to say, everyone knows of course it will come down to negoiation between the victims and the crown over how much compensation they will get
What else is there left that they can 'get' that would be of genuine benefit to them apart from psychology? In their shoes, we'd all be asking for money as well. If not for themselves, then for their children to hope for a better go at life than they, very sadly, got dealt.
'Feral' kids are an easy target. Maybe next we'll see bootcamps for people costing the health system the most due to bad lifestyle choices, or addictions?
Why not bootcamps for parents of the feral kids?
Bootcamps for the perpetrators and overseers of what we're now reading about with the report on abuse in care maybe?
They are also only for 3 months. Which is not long enough. Rename them "military schools" under the Charter system and make the kids stay there until they complete high school. Three months is going to do diddly squat to change ingrained behaviours. These kids need to be permanently removed from their useless families and criminal peers until their brains have matured.
Sure, that has worked before right?
https://www.1news.co.nz/2024/07/24/state-care-has-key-role-in-creating-….
I think you need a experience boot camp KW - you re part of the problem in NZ but you would never admit to it.
“I was 18 when I walked into the yard – never been to prison before. I walked out into the yard and there were 50 men there. I knew 45 of them, that’s because they were beside me in the social welfare homes, the family homes and the boys’ homes. So that’s when I realised there was a pipeline to prison process.”
One of the case studies in the report focused on the harm done by boot camps and military-style punishments, with specific focus on the boot camp on Aotea Great Barrier Island, Whakapakiri. The chapter is called: “A case study of state‐funded violence and abuse of children and young people needing care and protection.”
Between 1950 and 2019, 655,000 children, young people and adults were placed into the care of the state. The peak was in the 1970s with about 56,000 children being put into the state system. Of this group, an estimated 200,000 were abused and even more were neglected.
A common question from survivors is: What did I do to deserve this?
You and KW have no idea ..
“I am the daughter of a survivor. My mother was strapped to electrodes and delivered electric shock therapy as a young, university student. She was locked up without her consent, or the consent of her parents, and was subjected to inhumane, barbaric treatment in the late-1950s.”
From what I have heard, I understand previous attempts at 'Boot camps' were essentially an armed forces (mostly Army) recruit course, which can be fairly brutal. their model is to break everyone down to essentially a common level, and then build them back up as a team. It is not meant to be abuse or torture, more hard work, increasing the pressure to your limit (there is a lot of learning in that too). But many do see it as abuse and torture. When i did mine, no one explained what they were trying to achieve, and I would suspect the science was not great at informing what is needed to get the best out of the recruits. Today I'd expect a lot different.
Talk to Corrections staff on denial. Many people in our prisons would argue that they don't deserve what they got too. I've heard "She deserved all I gave her", "They were naughty so I taught them", "they were cheeky so i taught them not to be" and many more excuses to justify their actions.
I suggest that better than 90% of the cause is worse than bad parenting, but how do we as a society fix that without removing individual freedoms?
As a young cop many things blow you mind in the first few months. For me one was dealing with some 'ferals' who we delivered back to a wreck of a home with dysfunctional adults. As I left the Sergeant muttered about it being a foster home.....
A wow boody hell moment for me.
The "pipeline" started with the families, not the prisons. If it werent for the families they wouldnt have been in care in the first place. And just because some boot camps decades ago were abusive doesnt mean modern ones are. Just like its possible to go to boarding school or church camp these days and not be abused.
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