A review of things you need to know before you sign off on Tuesday; some big retail rate changes, auctions draw more bidders, long ban, eyes on HLFS and RBA, swaps stop falling, NZD holds, & more

Although the pronoun "they" tends to be thought of as gender neutral (and many people find pronouns to be an important affirmation of identity), a person who goes by "they" could actually be a man, a woman, both, neither, or something else entirely.

Likely 'they' is anyone over invested in the nz residential property market - financially or as a job.

Too many people for a country of our size. It was allowed to become too large a part of our economy.

Its had a lot of big tests.  Cypress bank crisis, GFC, Covid Crash, US banking crisis, FTX collapse and many others 

This is true anything liquid is used for margin calls,

Well yes. Most of the leveraged positions taken out yday on ratty were leveraged longs. Gold and silver have constant short positions from the likes of JPM. Yes, I know, people say that's a conspiracy theory. But it's not. The short positions against gold and silver are mechanisms to control the price on behalf of the ruling elite. You can chalk this sentence up on the conspiracy whiteboard.  

The real suckers are those who have been gorging on cheap Japanese debt to invest elsewhere. Not arguing that JPY is not a SOV as all fiat currencies are to some extent. 

I think gold dips during selloffs because of the flight to the US dollar and US dollar strength is bad for the USD price of gold. 

You can always check my historical posts where I was raving about it in 2018 and everybody thought I was insane.

...& rightly so 

Why where National in power? oh yeah they kicked Labour's arse....   that's right we gave them the mandate to make this change

Election 2023 result: Anatomy of Labour’s collapse, from unprecedented support to devastating loss in three years

What'd you think was paying for all this?

Indeed. My hypthosesis is that the intermediary between interest rates and liquidations is the rate of private debt growth (bank credit money creation). Without a decent net flow of bank credit, our economy tanks.    

Polymarket poll has Kamala 10 ppts behind. As a champion of the people, Kamala has an interesting past.

As Attorney General, she instructed her entire staff to stand every morning as she entered the office and say, ‘Good Morning General’...never address Harris nor look her in the eye as that privilege was only allowed to senior staff members.

Just my opinion but I find that cackle unnerving. Like a Batman villain. 

https://nypost.com/2024/08/02/us-news/kamala-harris-berated-staff-with-…

It will come down to voters turnout , and I think Harris will inspire more to vote. Trump and Vance are actually helping her, by winding up a lot of her potential supporters.

Solar - its the vibe and labour are still in no mans land

“We will not take your support for granted,” then-Prime Minister Jacinda Ardern said on election night in 2020, after Labour won an unprecedented majority.

She was talking about first-time Labour voters, the blue-centre who were dipping their toes into red.

More than half a million voters abandoned National in the 2020 election, and while the number of Act voters swelled by some 175,000, Labour’s numbers rose by more than 200,000.

This was a celebration of Ardern’s response to the pandemic at the time. Except for closed borders and the absence of international tourists and students, many in New Zealand were living more or less as they always had while the rest of the world was seemingly on fire.

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Fast forward three years and Labour has crashed to a preliminary result of 26.9 per cent, almost as low as the 2014 disaster of 25.13 per cent under then-leader David Cunliffe.

Ardern’s popularity was never going to stay so high for long, but she had clear intentions to hold it there for as long as possible.

How did it all go so terribly wrong?

Jacinda Ardern walks up to deliver her victory speech to Labour party supporters at the Auckland Town Hall after romping home in the 2020 election. She promises to look after first-time Labour voters. Photo / Dean Purcell

Losing the centre

The “heading in the right direction” metric in regular Taxpayers’ Union Curia polls was happily trucking along at above 50 per cent until November 2021, when it dropped to 44 per cent. This was also the first time it went net negative (when the “wrong direction” metric is higher).

Those were the months when the Delta variant continued to creep through Auckland communities, despite an extended lockdown. Support for Ardern remained high when the lockdown started in August, but by November the centrist voters who had put their faith in Ardern were getting weary with every extension.

Ardern’s calls to continue the lockdown were based on public health advice at the time. Māori and Pacific health providers were calling for stricter rules because their population groups were at higher risk, and at lower vaccination levels.

Ardern had to draw a line so enough people were protected, but without the possibility of public frustration boiling over into a collapse of social cohesion. She progressively eased some of the rules, but the lockdown remained, followed by Aucklanders in the most restrictive settings when the new traffic light system started in December 2021.

The Taxpayers' Union Curia poll results showing the share of people who think the country is heading in the right or wrong direction. A sharp reaction is evident as the Auckland lockdown was extended into October and November.

Helping to protect minority groups - though not as much as health advocates wanted - generally isn’t the best way to maintain appeal among the majority. Ardern’s grip on the centre started to loosen, which was reflected in the mood of the country in the right/wrong direction polls.

The share of voters who believed New Zealand was heading in the wrong direction was 19 per cent at the start of 2021, according to the Taxpayers’ Union Curia data.

This rose throughout the year but dropped to 28 per cent in September, showing initial support for the lockdown. But it rose sharply to 36 per cent in October, and 45 per cent in November, as the lockdown was repeatedly extended.

The net metric for right/wrong direction rose into the positives over the summer months but dropped into the negatives again in March 2022, and never breached the positives again.

Two other rapid rises were of note during this period.

The first was online disinformation. Starting from December 2021 - when the vaccine pass essentially created two classes of Kiwi, which Ardern justified on public health grounds - New Zealanders were fed and soaked up Russian-seeded fake news about Covid-19.

According to a major Microsoft report, New Zealanders consumed Russian propaganda at a level 30 per cent higher than Australia and the United States, which fed into the sentiment that saw protesters occupying Parliament in February 2022.

Russian propaganda consumption in New Zealand increased by more than 30 per cent relative to consumption in Australia and the US at the end of 2021. Source: Microsoft

The second was in response to the massive cash injections throughout the pandemic: inflation. It leapt from 3.3 to 4.9 to 5.9 per cent from June to September to December 2021, a pattern observed around the world where similar cash injections had taken place.

But it wasn’t until mid-March 2022 that Ardern admitted for the first time to a cost-of-living crisis, having spent many of the preceding weeks refusing to say so.

By then voters were tired of the pandemic, the Parliament lawn had been on fire, the borders were still closed as the rest of the world was opening, and inflation - at 6.9 per cent - was still climbing, eating into how far everyone’s dollar could stretch.

Around this time National pulled ahead of Labour in the 1News Kantar poll for the first time since before the pandemic.

The aftermath of the extended lockdown continued to hurt Auckland and the Government.

Overworked and exhausted health workers struggled to cope not only with Covid patients, but a Covid-depleted workforce that was often in isolation. In announcing his retirement from politics, then-Health Minister Andrew Little said the winter of 2022 was the “first time I really felt the impact of prolonged stress because of my concern with the ability of the [health] system to cope”.

Education standards limped along following the downstream impact of empty classrooms.

And throughout 2022, the number of ram raids spiked, prompting youth justice advocates to point to disengaged youth - in part due to the extended lockdown - as a contributing factor.

Covid lockdown in Auckland, September 2021. Photo / Michael Craig

There’s a reason why Ardern’s replacement, Chris Hipkins, has repeatedly said that one of his biggest regrets was how long the Auckland lockdown dragged on.

The loss of the centre throughout Auckland is evident in the fall in Labour’s share of the party vote in seats that traditionally lean left: Mt Albert, New Lynn, Te Atatū, Kelston, Mt Roskill, and Maungakiekie.

What’s even more indicative, however, is the collapse in support in traditionally right-leaning seats, suggesting heavier losses among blue-centre voters who tried Labour and then abandoned it.

In electorates including Epsom, Tamaki, Pakuranga, North Shore, Upper Harbour, Kaipara ki Mahurangi, Whangaparāoa, East Coast Bays, Botany and Northcote, Labour’s share of the party vote more than halved between 2020 and 2023.

All of these seats returned a Labour Party vote below 2017 levels.

And even in Labour strongholds, voters stayed home this election: 13,000 fewer people voted Labour in Māngere in 2023 than in 2020. In Manurewa, it was 11,000 fewer.

The swing to Labour in 2020 and then the collapse - especially in traditionally blue seats - in Labour's vote in 2023 to below 2017 levels.

Losing the left

Expectations were high after Ardern’s majority win in 2020. All that political capital and so much to do, having, for example, declared climate change the nuclear-free moment of her generation.

Three years later, the question is: what was all that political capital spent on?

The 2023 election result mirrored Labour’s 2014 collapse (26.85 per cent versus 25.13 per cent), when Sir John Key had his arms firmly around the centre and some disaffected left-leaning voters opted for the Greens, which won virtually the same share (10.7 per cent) in 2023 as it did in 2014.

Labour added 13,000 public housing places but the waiting list was at a record high. Labour passed child poverty legislation and lifted 77,000 children out of poverty, but was constantly criticised for ignoring many of the expert recommendations on welfare, justice, and mental health and addiction reforms.

And there had been no movement on Auckland light rail, barely perceptible movement on Kiwibuild, a rebuke in the courts over Labour’s handling of the ETS (after the Government wanted to prioritise the cost of living), and, after Hipkins took the helm and tried to recover the centre, a shelving of the income insurance scheme.

In a sign of Labour losing support on co-governance, having failed to make the case for it or sell it well, Hipkins also took the Three Waters reforms from Nanaia Mahuta and handed them to Kieran McAnulty.

alth tax, despite support for it from senior colleagues Grant Robertson and David Parker, and following a report saying the wealthy pay half the tax of ordinary Kiwis.

Labour was still polling in the low to mid-30s and virtually neck-and-neck with National before Hipkins’ decision was made public in early July. Afterwards, Labour began its inexorable downward slide into the 20s.

Labour's internal polling took a hammering after the Michael Wood scandal that saw him stand down as a minister. Photo / Michael Craig

That wasn’t the only weight contributing to the slide. The other high-profile damage at the time was Michael Wood’s fall from grace.

The Herald had revealed Wood’s repeated failures to declare his various shareholdings that potentially clashed with his portfolio responsibilities, despite repeated warnings from the Cabinet Office. At the end of June, following further instances emerging, Wood resigned.

Hipkins had already lost Stuart Nash for divulging Cabinet discussions to his donors, and Meka Whaitiri who defected to Te Pāti Māori, but Labour had somehow stayed in the game with National in the polls.

It would later lose Kiri Allan, but Labour insiders say that the real hit in their internal polling came with the Wood scandal. It reeked of arrogance. The subtext of Wood’s inability to do a simple task was that the rules didn’t apply to him, or by association to Labour.

Wood was dumped down Labour’s party list but was still expected to win the Labour stronghold of Mt Roskill. But voters there, clearly unimpressed with his antics, turned his 14,000-odd majority in 2020 into a 1500-vote loss to National’s Carlos Cheung.

As they had done so in 2014, green-red voters swung to the Greens.

This was most emphatic in Wellington, where Green candidates Tamatha Paul and Julie Anne Genter won Wellington Central and Rongotai respectively. In the former, the Greens won the party vote by a margin of 3300.

But the pattern was evident in all the urban centres around the country.

Change in share of the Green Party vote in urban seats across 2017, 2020 and 2023

Change or more of the same

Having lost its grip on the blue-red centre and the red-green left, Labour started the campaign at the beginning of September somewhere between the mid-20s and 30 per cent, but trending towards the diehard 25 per cent who stick with Labour through thick and thin, as they did in 2014.

There was an opportunity to regain momentum in the election campaign, but Labour had been slow off the mark; it had taken weeks of political pressure - and months of rising inflation - until Ardern conceded there was a cost-of-living crisis in 2022.

And then Labour’s 10-point plan to address this in the campaign contained little more than more of the same. The only two points that were new were taking GST off fruit and vegetables, and a pledge to provide free basic dental care for under 30s.

These were also roundly criticised, the former for having no guarantee it would make much of a difference to consumers, the latter due to the workforce challenges.

Neither shifted the dial in the polls. Nor could Labour throw out any more lolly scrambles, given how tight the books were and the pressure it was under not to overspend.

Another key election issue was law and order, but Labour was slow to move on ram raids.

Hipkins fronted a number of youth justice policies in the middle of July, another attempt to regather some of the centre voters Labour had lost; the proposed punitive measures violated the rights of children.

“That needed to happen a year earlier, not weeks out before the house rises for the election,” one Labour insider said.

And then, in the middle of the campaign and seemingly on the fly, Hipkins dropped Labour’s prison reduction target. By then, the centre was no longer listening.

An emotional Chris Hipkins conceding defeat on election night. 

It was always going to be an uphill battle for Labour facing such economic headwinds.

And it’s purely speculative to wonder whether ending Auckland’s lockdown earlier - which might have had deadly consequences in South Auckland - campaigning for a wealth tax, or cracking down on youth crime earlier would have made a difference.

As a Beehive insider told the Herald: “It never is one thing. Elections are always a vibe - either time for a change, or continuity.”

The vibe started with the Auckland lockdown, and only grew stronger from there, so the country voted for change.

The question for Labour is where to from here.

With the exception of Ardern at the helm, the party hasn’t had an election result in the 30s since Helen Clark was leader in 2008. And when Ardern took over as leader in the weeks before the 2017 campaign, she didn’t adopt any new policies.

This suggests that, over the past 15 years, Labour has only gained enough support to form a government when it has a leader with phenomenal star power, who can capture a zeitgeist. Such leaders don’t come along very frequently, and star power dims.

So how can Labour rebuild so it has the policies, the team, the vision, whatever it needs to have to win enough support to form a government - with or without such a leader?

Saw him speak at a conference once. Thought he was lightweight 

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