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US data largely positive; China exports fall, reserves rise; China's dairy industry struggles; Aussie CoL indexes higher than CPI; UST 10yr 3.97%; gold unchanged and oil up; NZ$1 = 60.1 USc; TWI-5 = 68.9

Economy / news
US data largely positive; China exports fall, reserves rise; China's dairy industry struggles; Aussie CoL indexes higher than CPI; UST 10yr 3.97%; gold unchanged and oil up; NZ$1 = 60.1 USc; TWI-5 = 68.9

Here's our summary of key economic events overnight that affect New Zealand with news of a day of mostly restrained gains in economic metrics.

First in the US, mortgage applications rose nearly +7% last week from the week before, driven by a sharpish -27 bps retreat in mortgage interest rates. Despite the gain, they are still -11% lower than the same week a year ago, itself quite weak.

American consumer debt only rose a very modest +US$8.9 bln in June from May, less than the +US$10 bln expected and the +$11 bln gain the prior month. These levels are up just +1.8% in a year. Clearly, Americans are not being profligate in taking on new consumer debt.

The latest US Treasury bond auction was again well supported, this one their 10 year. It delivered bidders a median yield of 3.89%, sharply lower than the 4.22% at the prior equivalent event a month ago.

Across the Pacific, China released its July trade data late yesterday. Their exports were up less than expected, a three month growth low. An export-led recovery doesn't seem to be happening. Their imports rose more than expected and their strongest rise since April. That meant their trade surplus shrank in July.

The Chinese dairy industry is going through a tough time at present with a number of listed companies in the sector delivering operating losses and warning of tepid demand.

China's FX reserves rose to US$3.26 tln, an eight year high even if the monthly gain was relatively minor. But it is still somewhat short of their all-time US$3.98 tln high reached in May 2014.

In Europe, German industrial production rose by +1.4% in June from May, better than expected on strong new order growth and making back about half the prior month's retreat. However both metrics remain deeply negative on a year-on-year basis.

Australia released its five Living Cost Indexes for Q2-2024 today, supplemental to their CPI. For 'pensioners & beneficiaries' they were up +4.1% for the year. For 'aged pensioners' up +3.7%. For 'self-funded retirees, up +3.6%. For other benefit recipients, up +4.6%. For 'employees', living costs were up +6.4%. The overall CPI was up 3.8% in the same period.

The UST 10yr yield is now at just on 3.97% and up another +9 bps from yesterday. The key 2-10 yield curve inversion is again much less, now at just -6 bps. Their 1-5 curve is also much less at -67 bps. And their 3 mth-10yr curve inversion is down at -138 bps. The Australian 10 year bond yield starts today at just on 4.16% and up another +14 bps as the RBA review sinks in. The China 10 year bond rate is down -1 bp at 2.14%. The NZ Government 10 year bond rate is now just on 4.34% and up +9 bps.

Wall Street was little-changed on the S&P500 in Wednesday trade, and off -0.2% from yesterday's recovery. Overnight European markets rose strongly, bookended by Frankfurt's +1.5% and Paris's +1.9%. Yesterday Tokyo recovered another +1.2%. Hong Kong was up +1.4%, but Shanghai was barely changed. Singapore recovered +1.6%. The ASX200 recovery was weak again, up just +0.2% and the NZX50 rose a better +0.7% in Wednesday trade.

The price of gold will start today virtually unchanged from yesterday at US$2392/oz.

Oil prices are +US$1.50 USc firmer at just on US$74.50/bbl in the US while the international Brent price is just over US$78/bbl.

The Kiwi dollar starts today up almost +½c from this time yesterday at just on 60.1 USc. Against the Aussie we are up almost +¾c at 91.8 AUc. Against the euro we are up +40 bps at 54.9 euro cents. That all means our TWI-5 starts today at 68.9 and up +70 bps.

The bitcoin price starts today at US$55,912 and down -1.4% from where we left it yesterday. Volatility over the past 24 hours has been moderate, at +/- 2.0%.

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111 Comments

Shane Jones is being hoist with the ideology's own petard. 

Energy underwrites money - who'd have guessed that? 

And we're up against real limits - so monetary manipulations won't work. All they can do, is rob tomorrow to keep the lights on today. 

Put another way: Bradford was as wrong as Friedman. Time we moved on. 

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Disagree. The National government of 1999 privatised the electricity infrastructure, making promises that have never been lived up to. Shane Jones in his own way, is simply calling it as it is. 

That government prioritised a dividend to government, so much so that some of the gentailers have had to borrow to be able to make it. It could be argued that NZ is too small to make a lot of efficiencies, but the requirements of the structure limited the companies ability to protect and develop the net work and generation capacity. The 'free market' in electricity gentailing has shafted Kiwis across the board. 

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Seems to be working don’t you think? Electricity is reasonably priced and available. Do you think government owned would be better like the roads or council owned like the water? 

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You think $1000 MW/Hr is reasonably priced?

The thing is it is not working. The networks are old and maintenance has been neglected. Replacement of generation options has been explored, but not done to the degree that is required for future needs. The Greens have opposed some of the options explored meaning the coal option has been kept for a lot longer than it should have been. 

Yes I think this is one of the functions that should have been kept under government control. Our roads are crap, but a Ministry of Works would likely do a better job than the current system. Yes the old Ministries were not particularly efficient but who says they wouldn't or couldn't be today? 

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 Yes the old Ministries were not particularly efficient but who says they wouldn't or couldn't be today?

In a clinical sense, they "could". But in a practical sense, they've become so devoid of being task orientated, the outlook doesn't seem optimistic. We likely need some sort of rallying emergency before priorities are correctly ordered.

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Agree. As much as I love the idea of a mass house building program for FHBs ala 1930s-1950s I must also acknowledge the reality of systemic incompetence and bureaucratic ineptitude which almost certainly makes it a pipe dream.

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A recent unveiling of a completed government project highlighted some of the problem. The bureaucrats present at the event outnumbered the construction crew by a good 5:1 ratio. All clambering over each other for a photo op and to take credit for something they had little to do with.

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Meanwhile, in countries that encourage the private sector and gas exploration...

"HOUSTON/NEW YORK, Aug 7 (Reuters) - Major U.S. natural gas producers are preparing to further curtail production in the second half of 2024, after prices sank nearly 40% over the past two months. Henry Hub gas futures have dropped to around $2 per million British thermal units (mmBtu), while in West Texas, Waha prices have turned negative a record number of times so far in 2024."

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Business got far too comfy with record profits, and seem to expect the unnaturally-influenced levels of profit are now normal. Behaviours are reflecting this and as we know, actions speak louder than words.

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Yes very common

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These high prices are because we've hit a dry year. We did have a very developed investigation, the NZ battery project, exploring options to deal with exactly this event but it has been ditched by the coalition. We should have done it decades ago, now we still need to wait at least a decade for a solution as all work has stopped. 

The gentailers will do whatever the government and market encourages them to do. Currently that is increase generation - everyone is scrambling for supply. But they are not incentivised to do anything significant against the dry year problem. They won't build thermal due to the terrible PR and likely short lifespan. They don't care if prices rise every now and then as their books are largely balanced and it just pushes out competition. 

Meridian and Contact have done some smoke screen work to help justify getting rid of the Onslow threat. Couple of tiny batteries here and there, maybe a hydrogen plant that can be wound down... Just enough to muddy the waters 

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There’s plenty of coal

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Russians also have plenty of LNG.. the indians saved 12billion in discounts buying russian  energy that europe was not allowed to buy

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Yes, that's one option, but it's politically and ecologically undesirable. Huntly is running flat out this winter to keep our lights on, what do we do when that isn't sufficient or it reaches end of life? Who is going to build another coal plant today, with the expected lifespan being measured in years not decades given our carbon reduction promises? 

It would take government money building a new coal plant (terrible PR for the country) or a huge swing in political and public will to get it done. 

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Relevant to this discussion - this morning Manawa (MNW.NZX, the generation arm of what was Trustpower) announced a large profit downgrade apparently because an electricity retailer they supply is in default, and Manawa have been caught short on generation and having to buy on-market. 

I have mentioned before how the status quo benefits Gentailers as the competition gets smashed in dry years - here's an example. A retailer likely to fail, and a competing smaller generator being hit hard. 

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2

you can't take in 200,000 people in a year and expect demand for electricity to stay stagnant. They already had turbines to replace at Kapuni and Huntly which were supposed to be completed sometime around May this year (x1 turbine at each offline from 2023 until fixed), so add in immigration demand, more EV's and conversions to heat pumps from fireplaces (boooo), and we have the perfect storm for higher prices. 

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Yeah who could have predicted that increasing the country’s population vastly through immigration would have resulted in scarce resources like electricity becoming less reliable and more expensive. Next they’ll be complaining Auckland it short of water, and sewage is flowing into the ocean when it rains.

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Nothing like a smelly welly (Wellington) dip in the waterfront from the wharf. Best not to go after a decent rain or you'll wind up a bit whiffy

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I suspect your argument of "private = bad", "public = good" has a few flaws:

  • Our power bill used to be the biggest, these days its eclipsed by insurance and rates with water not far behind
  • We almost never have power cuts. We have it so good that even the talk of a brown out is considered third world (third world countries have them daily). 
  • When Auckland had a dry year we had to conserve water. stop watering our gardens, businesses had to cease operation, etc. When the hydro lakes have a dry year, so far it hasn't affected me at all. 
  • There is a balancing act between investment and cost. The market seems to be getting it almost exactly right IMO. 

 

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Within the next 12-24 months you will find out your electricity bill will eclips your insurance and rates easy. More specific when you are now a customer of a non generating retailer. And.. yes you are right with your comment "The market seems to be getting it almost exactly right IMO" because that is how the NZ electricity market has been designed: high prices in times of scarcity. But...it feels like daylight robbery when you calculate that the cost of generating 1 MWh of hydro cost only $26.02 ( See: Meridian June 2024 operational report for the last 12 months)

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Our needs were well satisfied. So much so that we invited Tiwai to take the excess for cheap.

So what went wrong?  We decided growth was good and created more and more and more demand. Just as we have with every other aspect of NZ inc.

There lies the problem Mr Jones - demand exceeds supply.  And all you did on RNZ the am was woffle.

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What would our power prices be like if we had the same infrastructure but less people paying for it

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"You think $1000 MW/Hr is reasonably priced?" - yes if that is the price that makes current demand meet current supply. Its a much better system than rationing etc. Shane Jones should not interfere with it. 

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"yes if that is the price that makes current demand meet current supply" But that essentially kills off the small business's, and possibly even some private users if it flows over. In other words it favours the wealthy. There are already a lot in the population who cannot afford their winter heating bills.

I suggest that the government actually screwed the structure up when they privatised it. They required it to be profitable which in effect prioritised paying the government it's dividend rather than ensuring the network and capability was sustainable and affordable. This is where SJ is coming from in my view. To that end he is correct and needs to keep doing what he is doing.

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Still leaves the question (Mr Jones) if you do not ration by price, how do you?

Mr Jones was unclear on RNZ, or rather wouldn't answer that question.

Structural reforms another issue, it still leaves you with how to ration.

Would you like the market or Jones to do it (the miners and fishing industry might like the Jones option)?

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Meanwhile Octopus puts down the price it gives me for my solar going out the gate.

17c to 15c.

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We're kinda stuck.

Private interests mean profit must be extracted.

Public sector seems generally incompetent.

If only benevolent dictators like Lee Kwan Yew weren't such unicorns.

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Yeah….

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Agreed.

It seems to be a "cultural issue" plaguing NZ (and also other western countries) wherein we either have excessive ticket clipping from profit-seeking private interests, or excessive ticket clipping from fat juicy pay packet seeking bureaucratic interests.

Which means that we can't build out our infrastructure (or even maintain our existing stuff) to the point it needs to be.

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We have let checking and balancing become way more important than the thing that's being checked and balanced.

The irony being that in the current era, when things do go wrong, it's apparently nobody's fault.

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Nailed it

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I think this is a well understood issue, nothing cultural. Almost anything publicly run sucks, its why we don't buy our bread / milk / cars / etc from the government. 

SOEs can work OK, but even then its pretty average. Look at Kiwibank, hardly able to turn a profit, in the same market the big 4 are creaming it. 

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"Big 4 creaming it?" Well yes. When government policy is to funnel money to the privatised tax system that is the banking cartel, even an ape could manage to generate huge profits like the ANZ et al. 

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Almost anything publicly run sucks.

You get what you pay for with government services. We have voted to pay less, so expect worse services to come.

Compare and contrast our health system vs the USA's? Seems like one of the most financially ruinous things you can do over there is need a hospital bed. People more worried about the bill than the injury.

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Are there any countries where this isn't a problem? Seems pretty bad everywhere else in my experience. 

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The public sector seems generally incompetent

As many as possible of the functions of the public sector have been outsourced to the private sector.

It isn't that the public sector are incompetent, it's that the people actually working on the projects (the private sector) are focused on extracting as much taxpayer/ratepayer money as possible. This is what happens when you decimate the public sector in search of efficiencies, cost savings, etc... you turn an organisation that had a primary objective of supporting the public good to one of making a profit. I was literally told a few days ago that one of the internal council engineering teams are not allowed to design anything as it would undermine the idea of having an external supplier panel and if they delivered for a much cheaper price it would mean there would be pressure to hire more internal engineers and the right leaning council has directed them to cut staff costs. This is the system neoliberalism births. 

I can't believe how many people don't get this. 

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I get to experience a raft of different entities undertake the same function (construction).

The public sector is by far the most organizationally bloated, expensive, inefficient of the entity types. Their extra operational requirements means anyone doing work for them, has to charge more, because doing work for them sucks up so much extra time, vs doing work for anyone else (large corporates being the second most expensive sector to work for, but by some distance).

Didn't always used to be this way, but philosophically they now have a piss poor approach to doing actual things in the real world. If I operated my private business like them, I'd be broke. Unless I charged twice as much - but then I probably wouldn't get as much business.

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If I operated my private business like them, I'd be broke.

If course you would. The public sector doesn't have the privilege of just getting on and doing the right thing.

They have to respond to the wishes of incompetent politicians voted in by ignorant populations and even if they get a clear direction from politicians they can be held up for years by some ideological nutbar who decides to use the democratic checks and balances to slow the process down.

Imagine that as a business owner, you had to consult everyone in a city before you changed the seating layout of your restaurant, give everyone time to have their say, treat everyone's opinion with respect and then wait for a politician to decide if you could actually change the layout. These are the constraints the public sector works under.

Hate the system but not the players. Most people who have cut their teeth in the private sector can't handle the complexity involved in the public sector. The private sector has one priority, profit. 

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To be clear, I work for the private sector but have also worked for public sector and NGOs. 

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I'm talking mostly from a purely operational perspective.

If being accountable to the public means you need 3-4 layers of project management, instead of 1, to get very basic tasks done, you are doing it wrong.

Most people who have cut their teeth in the private sector can't handle the complexity involved in the public sector. The private sector has one priority, profit.

We can also argue people in the public sector are devoid of a need to involve efficiency in what they do. Despite all the moral hazards, the profit motive more often distinguishes who can deliver value, and who can't.

This is not to say everything should be for profit, it's just that our institutions have got to such a level that they struggle to deliver value.

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Haha

"Hey you, professional. We need your experience and expertise to do something.

But don't do it in the best way you've worked out. We need you to do it this way, that we dreamed up".

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I know right?

"It is important to Auckland Transport that our suppliers are ethical in their business activities, are honest and transparent and do not engage in corrupt practices or anti-competitive behaviour."

Who has time for all this?

By the way, have you read the latest terms of service changes in the latest Android update? Really interesting point in section 235, clause 67, item 5.

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Pretty sure there are regulations to cover all these things. Why does Auckland transport think they’re special?

 

No android here. 

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1

"It is important to Auckland Transport that our suppliers are ethical in their business activities, are honest and transparent and do not engage in corrupt practices or anti-competitive behaviour."

Who has time for all this?"

I didn't know I should be operating in an ethical and transparent way. Good thing it's now written down and policed as a requirement. Rather than say, the market rejecting me for acting as an unethical bad operator.

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But the market does not reject operators for acting unethical, in fact giving out bribes are often rewarded by the receiver directing business a certain way.  

Hynds, a supplier/manufacturer of pipeline products to the Civil infrastructure space, will often reward contractors employed on behalf of the council/Government departments with overseas trips to sporting events.  A whole load of contractors went to Spain about 6 months ago.  They even have an app for tracking the client's spend progress.   

https://play.google.com/store/apps/details?id=com.hyndsvip.app

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It's a long winded way of saying they won't be bribed with rebates or all expenses paid trips to the Rugby World Cup like many suppliers entice other contractors with.  

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Capitalism always descends into Crony Capitalism unless forced not to.

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This is the fatal flaw now, the lack of personal fortitude for those in middle and upper management to voice their opinions and say no to costs, proposals, inefficient and wasteful policies and suggestions that cater to smaller groups. Too many are still scared of offending or upsetting someone when they need to make key decisions. You cannot please everyone, and management are paid to make these decisions, not shy away from them.

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A big part of the problem is the politics. My experience in the Health system and other public sectors is that some negotiate and manipulate their way into managerial positions, and then work hard to avoid being accountable for anything. they surround themselves with friends and sycophants, and then spend their time telling their bosses what they want to hear. Even bad news can be made to sound good...

their bosses are often trapped because they were the fools who hired them. Performance and productivity are not the goals.

 

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Sounds like any large organisation to me. 

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Electricity is no different to every other business I have witnessed in NZ, the directors and shareholders suck all the profit out of it and do not invest in the business or even maintain it.

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like many landlords

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Nice weather in Kaipara district yesterday, lots of people milling around enjoying the sunshine and chatting.

Are we still all equal in NZs democracy 

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Racist undertones of the boomer on this site never cease to amaze me. 

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Amazing what people allow to reside in their heads 

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Yep, for example "Are we still all equal in NZs democracy"

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Some people have a lot of spare space in there; when you download an ideology based on very few bytes, there a lot of left-over space. 

 

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"Racist undertones of the boomer on this site never cease to amaze me"

Like ageism?

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Nope many are denied access to the outside by cuts to their disability support & excluding them from transport design. See how it feels to be stuck inside without access to outdoors and no access to public parks because of your birth and you can see why many often cannot access work either.

But sure in an ableist mind either everyone has the same ability they have or those who don't do not deserve to live or be outside. Come back when you realize that ageing & injury is also a leading cause of severe disablement and if you are ageing you don't get the freebies like access to outside that ACC gives out. 

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"many are denied access to the outside:

Are you talking about people in prison?

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Closer to equal than last week.

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We will not be equal in NZ's democracy till you can only vote in one council's election. Not every council where you own property.

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US consumer spending slowdown weighs on travel and leisure groups

Disney theme parks, Airbnb home rentals and Hilton hotels are among those seeing weaker demand

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Meanwhile
'Garbage time': China’s slump spins out new meme of economic despair

"In 2004, 62% agreed “in our country, effort is always rewarded." That dropped to 28% in the 2023 survey."

https://www.reuters.com/world/china/garbage-time-chinas-slump-spins-out…

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Be more avian! Why stressed Chinese students are pretending to be birds

https://www.theguardian.com/lifeandstyle/article/2024/aug/06/be-more-av…

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The UST 10yr yield is now at just on 3.97% and up another +9 bps from yesterday.

Maybe the 10 year auction was not that good?

The sale stopped at 3.96%, tailing by a little more than 3 bps...

Not helping matters were comments from JPMorgan Chairman and CEO Jamie Dimon, who told CNBC that he was "skeptical that inflation will get back to 2%," adding that a 50bps cut by The Fed "doesn't matter as much as people think."

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Household Debt Increased Moderately in Q2 2024; Auto and Credit Card Delinquency Rates Remain Elevated

“The volume of mortgage originations remained low, primarily due to subdued refinancing activity.” said Andrew Haughwout, Director of Household and Public Policy Research at the New York Fed. “Homeowners continued to increase HELOC balances as an alternative way to extract home equity.” 

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https://newsroom.co.nz/2024/08/06/ferry-fiasco-will-echo-for-decades-wi…

So we'll end up paying more, for a worse product and likely give up public control over pricing. 

This National led government is a disgrace, it is trashing the legacy of previous centre right governments as being economically competent. It's ideologically driven bullshit policies are going to f*** us over for decades and decades. 

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 Nov election...now the Turkeys are coming home to roost...well done NZ

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Got to pay back those road transport donor.

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This was a really, really bad decision.

The ferry contract was massively discounted in our favour apparently, we couldn't get them for +35% on that now if we begged. We just needed to solve the terminals. 

We won't recover from this, destined to shuffle along bathing in our mediocrity and lack of ambition. Our second finance minister with no working knowledge or career in finance, we will never learn.

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Worse than that, no idea what we are heading for. 

In a world where energy costs ever-more energy, things will never be 'cheaper' than now. 

Mind you, that has knock-on ramifications....

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Yes , the logical thing to do was go back to Kiwirail, and say , get these land side prices to the minimum. Labour had already done so , shaving off $ 750 million , but it was too close to the election to commit too.

The whole thing is surreal, why was Kiwirail paying to build a terminal for Bluebridge , why were they paying for roads , why wasn't the port companies providing the terminals?It would seem Kiwirail took on these costs , assuming the then govt would be most likely to cough up to them .

Now the final bunch of OIA releases are due any day since May, seems treasury are covering up something even worst . Enter willis the rookie , and a quick populist decision, boom. 

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Next let's have a look at where all the 3-waters money went that was paid out to councils before the last election. I suspect heads would roll if it were revealed what the councils plundered it all for. Aaaaaand up go the rates again

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Yes , the logical thing to do was go back to Kiwirail, and say , get these land side prices to the minimum. Labour had already done so , shaving off $ 750 million , but it was too close to the election to commit too.

The whole thing is surreal, why was Kiwirail paying to build a terminal for Bluebridge , why were they paying for roads , why wasn't the port companies providing the terminals?It would seem Kiwirail took on these costs , assuming the then govt would be most likely to cough up to them .

Now the final bunch of OIA releases are due any day since May, seems treasury are covering up something even worst . Enter willis the rookie , and a quick populist decision, boom. 

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No, the logical thing to do is sell/scrap/sink/get rid of the existing clapped out ferries and not replace them. End of story.

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I think that's what Nicola wants  - and then offer it private operator who will send profits offshore but ask for guarantees 

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No, there’ll be no offering of anything. Do nothing, leave it. If individuals want to get across sort it out yourself. Maybe a demand for coastal shipping will develop. You know what happens when there is demand.

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individuals more likely to jump on a plane for overseas , more likely.

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One way ticket hopefully

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For some reason I have the Time Warp going through my head. We've had a jump to the left, and then a step to the right. Everyone put their hands on their hips in frustration when things didn't immediately improve,  and their knees are currently clamped together to try and stem the losses. The economy seems to be receiving the pelvic thrust right now, and the result is rather maddening.

Rinse and repeat?

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lol...very good

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Knees locked and repeated thrusts? Someone's been reading a particular book series......

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China released its July trade data late yesterday. Their exports were up less than expected, a three month growth low. An export-led recovery doesn't seem to be happening. 

 

don't get fooled by those numbers. 

here is the same stats on the same month in RMB: http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6…

here is the same stats in USD: 

http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6…

do you see the problem? 

started from last year, the main trading currency for China is no longer USD. 

 

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Here is a story of Council incompetence.

Company (start up) engaged to do an infrastructure remedial.  Did a fine job, quality workmanship, great rate and repaired said infrastructure to a high standard.

Next job cancelled. Why, because the incumbent revisited the site for another job and went ahead and upgraded all the quality repair work with new. Council infrastructure manager cannot explain why did it. The upgrade will exceed life of plant -  totally unnecessary.

This incumbent has now burnt the budget and future essential R&M projects have been scrapped as a result. No one at Council gives a rats. This is essential infrastructure work, not nice to have.

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This right here is the issue on black and white. The incumbent is a private entity doing work for the public sector. They have achieved their objective of profiting from the public purse. If this work were carried out by the public sector itself, there would have been no incentive to burn the budget. Surely you can see that. 

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And before you say well the council contract manager should manage the contract more closely I'll remind you that it's pretty hard to manage a contract to that level of detail when your team gets cut every few years but the renewal work increases and at the same time there is pressure not to pay the public sector contract manager as much as the private sector because they don't deserve to be paid as they are public servants. Vicious circle, and part of the neoliberal plan. 

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I an assure you not a great level of oversight was required - just some basic competence.

The frustration of watching the rate payer getting screwed is what is upsetting my contact.  He is concerned about the rate payer purse but continually comes up against attitudes in Councils who are wilfully blind or incompetent. He is highly skilled in his field - and sees Councils getting ripped all the time. As a young person with aspirations and a social conscience it's discouraging.

What to do, if he makes an issue, off the preferred list he goes.

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I've been of the mind that these sorts of goings-on happen all the time. It is good to hear a real world validation that our ratepayer money is not getting value for money due to lack of council oversight in projects. The sooner we engage more with local and central government and demand accountability, heads to roll etc we wont see any change. The sad part is that people pay their rates, complain, but never engage and get stuck in this never ending, never changing cycle. Civil duty seems to be held in less regard in todays age.

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due to lack of council oversight in projects.

It is interesting that if someone or something wasn't performing to expectations, you'd stop doing it, or get someone else to do it. Now, the solution is oversight.

Let's bring in a performance management layer to speed things up. That sucks up 10% of the hours in a day, having meetings about making things go faster....

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Yes a performance management layer because it absconds responsibility from those that are supposed to bail up the contractors for the lack of performance, and keeps them in a job while adding to the ratepayers budget two fold via inefficiencies and more bureaucracy. Madness. Hard times create strong men, strong men create good times, good times create weak men, and we are about here right now in the cycle.

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It is good to hear a real world validation that our ratepayer money is not getting value for money due to lack of council oversight in projects.

FFS, we're not getting proper oversight because we don't want to pay for it. First we cut the people doing the work and sold that work to private interests. Then we cut the people doing the oversight of the private interests and outsourced that to private interests. Now we wonder why we're getting screwed.

We're getting screwed because we think we're making savings with constantly keeping public sector salaries low, cutting staff levels and outsourcing to the public sector. I know I've charged the public sector 5 times more for what it would have cost had I been employed by them directly. 

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I'm with agnostium. Only question is why did the incumbent get paid?

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because it seems the council guy got suckered in and agreed to it..we think.

When challenged all that was said was ohh uhhh i better look into it. Nothing will happen

What other bs is going on?

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Council guy should be out on his ear - why do we keep protecting this sort of incompetence?

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I can almost 100% guarantee that the incumbent would have met his contractual obligations to the letter. They would not have been paid if they hadn't. The contract would have been written up several years ago and guaranteed a certain level of work. This is what happens when you privatise public services. Nothing the contract manager can do about it even if they wanted to. 

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https://www.nzherald.co.nz/nz/politics/boot-camp-for-youth-offenders-no…

Here is another example of the challenge of working in the public sector. The coalition of chaos decided it's going to set up military bootcamps using military personnel.  Unfortunately, the defense force says we're not teachers or social workers we're soldiers. So the coalition tell the bureaucrats to run military boot camps themselves even though they have no military experience. Then when the f***wit politicians who made that decision, to set up military boot camps against bureaucrats advice, are called out on it they say speak to the bureaucrats, nothing to do with me.

I suppose people on here will still class this as public sector incompetence.

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Anything is better than nothing don't you think?

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Depends on if you come out more broken than you went in - its a State Care mantra I believe?

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Is the Ministry of Justice, Ministry of Corrections and New Zealand Police, nothing? Commit a crime, do the time. Enforce the law. As for youth justice - fund youth justice correctional facilities properly, with professionals and processes fit for purpose, and direct the justice system to use them.

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No. Doing something badly is worse than doing nothing at all. You end up spending your budget twice, one to do the thing that doesn't work, then again to fix it. 

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The public sector is only as useful as the faith the public have in it, and currently that faith is very low since the last government. Unfortunately we aren't seeing too much better by the current lot. better in some ways, but not in any magnitude.

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I guess hiring ex-military consultants to help set up and run the camps would be politically unpalatable.

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Well , it would be pretty hard to blow out the cost of $ 500k per kid.

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when you sell them off, I guess you'll need to provide a cashflow history - lol.
I don't trust this fundamentalist government - all their actions are pointing towards gangsterism on the public purse and privation of the NZ citizen.

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I suppose people on here will still class this as public sector incompetence.

I think we're confusing poor policy, with poor operational performance. The two can often be linked, but they're not exclusive to each other.

Some parts of the military are also having more and more regs on them. For instance, there's now a health and safety debate going on, that fatigues aren't visible enough, and perhaps they should be wearing high-vis. Did central government push this one along, or is there now function within our public sector that's depending on investing the mental energy and oxygen into perpetuating worthless idiocy? 

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No we are not confusing poor policy with poor operational performance. 

The poor operation performance that the public sector get critiqued for does not stem from their competence but rather the environment they work in. They do not have a single easily measured objective like "make profit". They serve the 'public good' and the 'public good' can change several times a day depending on the whims of a politician /public opinion.

If the public sector could be run like the private sector we wouldn't need a public sector at all. It can't. 

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