Here's our summary of key economic events overnight that affect New Zealand with news long term interest rates are rising and have much further to go.
But first, American private businesses added +122,000 workers to their payrolls in December, the least in four months, compared to 146,000 in November, according to the precursor ADP Employment Report. That was below forecasts of +140,000. Hiring slowed in several industries and employment in manufacturing shrank for the third straight month. Employment growth was strong among large businesses in the West. Pay gains slowed slightly but are actually quite high, up +4.6% for those who stay in a job, up +7.1% for those who change jobs.
Meanwhile, initial jobless claims rose on the expected seasonal basis to 305,000 last week, but much less than those seasonal factors would have indicated. 2.175 mln people are on these jobless benefits now, almost exactly the same level as a year ago. (On a headline, seasonally-adjusted basis, initial claims 'fell', and by more than expected.)
Also falling were American mortgage applications, the fourth straight weekly retreat. Their benchmark 30 year fixed home loan rate almost touched 7% last week, deterring potential borrowers. Until the Trump risk goes out of long term benchmark rates, this is going to be a problem for the American housing market - and in fact all real estate transactions and other asset purchases that are valued based in yield.
And those rising yields are now extending to very long-dated maturities. The US Treasury 30 year bond auction today came in with a yield of 4.87%, up from the 4.48% at the prior equivalent event just a month ago. The auction was well supported, but less to than that earlier one.
The rise in longer term bond yields and interest rates is a global one. At its core is a demographic shift and ageing populations. But the Trump return has focused investors on the long term risks and they are back demanding a premium for that. Companies are also issuing more longer term debt, so there is a supply element to the trend. The Biden Treasury tended to prioritise shorter maturities in its fund raising, but the incoming Trump Treasury has already signaled it will go long. That will add to the supply pressure, and will spill out internationally. Pity American homeowners with 30 year mortgages.
In China, they are getting more proactive ahead of the expected Trump Tariffs, and reactive about their stuttering economy. They announced an expanded set of taxpayer subsidies for a wider range of consumer products, hoping to spur sluggish consumer spending. They have expanded the eight-category subsidy program to now twelve categories, now including dishwashers, rice cookers and microwaves, which will get a 20% discount from existing sales prices.
Overall, it is a program that has grown to NZ$2.8 bln, and still expanding.
In fact, this announcement was part of a much wider stimulus effort. They are battling consumer anxiety, a tougher challenge than the previous democratic yearnings.
Meanwhile, China is aggressively defending the yuan. It has held the official rate to the USD fixed since early November at 7.19. It last had a fixed peg in 2008-2010. Unfortunately for them offshore trading has it now at 7.35 and depreciating.
In the EU, producer prices rose +1.7% in November from October, the biggest monthly rise since September 2022. A seasonal rise in energy costs was the cause. Year on year, the EU PPI was -1.1% lower.
And staying in the EU, economic sentiment which had been stable for most of 2024, fell in December. Not a huge dip, but a notable one.
In Australia, their monthly CPI indicator rose +2.3% in November from a year ago, after a +2.1% rise in the prior two months. Analysts estimates were for a +2.2% rise and the biggest since August, partly due to the timing of government electricity rebates. Most households received a single rebate payment instead of two in November. Still, the latest inflation level has remained within the central bank's target range of 2 to 3% for the 4th month in a row.
And in maybe something of a surprise, there were 344,000 job vacancies in November in Australia, up by +14,000 from August. That is up by +4.2% and was the first rise since May 2022, when job vacancies reached their historical peak. However, year-on-year the declines is almost -10%.
In New Zealand we got the benefit of strong commodity price gains in 2024. ANZ reports that overall commodity prices finished 2024 up 15% from a year ago. All sectors except forestry achieved gains during the year but the largest were made by dairy (+19%) and meat (+23%). However, these sectors were more subdued in the December month. In NZD the rises were even more impressive, up +29% for dairy and up +35% for meat, year on year.
The UST 10yr yield is now at just on 4.68%, and little-changed from yesterday. The key 2-10 yield curve is slightly more positive, now by +40 bps. Their 1-5 curve is unchanged at +28 bps. And their 3 mth-10yr curve is also quite positive, now by +38 bps. The Australian 10 year bond yield starts today at 4.56% and up another +1 bp. The China 10 year bond rate is now at 1.61% and unchanged. The NZ Government 10 year bond rate is now at 4.66% and up +8 bps.
Wall Street is little-changed on the S&P500 in Wednesday trade. Overnight, European markets closed slightly lower. And Tokyo dipped -0.3% yesterday, Hong Kong was down -0.9% and Shanghai was essentially unchanged. Singapore was up a strong +1.5%. The ASX200 closed its Wednesday trade up +0.8% while the NZX50 was little-changed.
The price of gold will start today at US$2669/oz and up +US$18 from this time yesterday.
Oil prices are down -50 USc from this time yesterday at just on US$73.50/bbl in the US while the international Brent price is at just under US$76.50.
The Kiwi dollar starts today still at 56.1 USc and down -40 bps from this time yesterday. Against the Aussie we are down -10 bps to 90.3 AUc. Against the euro we are up +20 bps at 54.4 euro cents. That all means our TWI-5 starts today at just on 66.9 and down -20 bps from this time yesterday.
The bitcoin price starts today at US$94,646 and down -3.2% from this time on yesterday. Volatility over the past 24 hours has been modest at +/- 1.7%.
Daily exchange rates
Select chart tabs
The easiest place to stay up with event risk is by following our Economic Calendar here ».
139 Comments
That didn't take long.
"UK’s 142-year history of coal-fired electricity ends as turbines at Ratcliffe-on-Soar plant in Nottinghamshire stop for good"
https://www.theguardian.com/business/2024/sep/30/end-of-an-era-as-brita…
"...The Rye House gas plant in Hertfordshire, owned by VPI Power, a Vitol subsidiary, will generate electricity for a price of £5,000 per megawatt hour (MWh), which should earn its owner £6.15m over three hours, according to official market data. The larger Connah’s Quay gas plant in Flintshire, owned by Uniper, will earn just over £6m after agreeing to generate power for a price of £2,900/MWh.
The payouts are many times larger than the market rates recorded on Wednesday, which reached their highest level in more than three years due to a combination of freezing weather and low wind speeds"
https://www.theguardian.com/business/2025/jan/08/two-power-station-owne…
I am not sure if all generators get paid the marginal clearing price like they do here.
But with the market relying upon an increasing proportion of renewables there will be increasing numbers of price spikes at times like these. And the industries who pay wholesale spot market rates, unless they are well hedged, will go under like they are in NZ.
Interesting summary of the current state of the global automobile industry.
https://youtu.be/7h8K58qhMaI?si=9C0ns1yjh6Ytwkfu
The TLDR is that the haphazard implementation of BEVs into the auto market has cast shade on Central Authorities' claims that a transition to a greener, more renewable world would be financially seemless, and lead to a creation of newer green jobs. The reality is the significant capital outlay is difficult to afford, and that green jobs can't replace the older ones it's displacing.
And this is just cars, there's also the rest of how we live our lives that needs addressing.
Something far more fundamental needs to change.
Yes, it does.
The DC comment above - 'At its core is a demographic shift and ageing populations' - is indicative of what has to change. Wider perspective, we have to realise that we are operating within a bounded System, at unmaintainable levels. Clearly the tokens we measure the world with - don't.
This piece goes some way to explaining: https://ourfiniteworld.com/2025/01/05/an-energy-and-the-economy-forecas…. She is religious, so the final para needs to be appraised through that lens but figures 2 and 3 are worth thought.
That is what I've been saying here for nearly 20 years - the Limits to Growth mean increasing inflation (via scarcity/competition), plus decreasing-to-negative interest-rates (which won't stymie inflation). Meaning the Central Banks have run out of tools.
Enough people are reversing already, that wild-card voting is replacing yin/yang democracy in the First World. Add in the demise of what was the MSM, displaced by the ravings of anyone with an agenda and the (temporary) money to posit the loudest - and we see Bernays' approach taken to its illogical conclusion; the displacement of truth. Those in power are unlikely to be 'mea-cupla' types, so other-blaming will increase, meaning war(s).
Pity, we weren't as sapient as we believed. There WAS a better way - but it probably involved leaving the fossil pulse in the ground.
"the Limits to Growth mean increasing inflation (via scarcity/competition), plus decreasing-to-negative interest-rates (which won't stymie inflation)."
How does increasing inflation with decreasing-to-negative interest rates work? I would have thought they go up/down together
Exactly my point.
'would have thought' - past tense.
Real reduction in available consumables cannot be altered by injecting debt. The latter is a forward demand, the former is a lack of future supply. The only interest-rate which fits, is zero, then negative. But scarcity drives demand, even though an increasing cohort 'cannot pay'.
edit - debt-repayment drove growth, drove growing demand. That worked until it hit the Limits. Then we did a bit of upping the numbers against what was really entropy - upping the 'value' of an in-reality-decaying house. That should have told us, but we all partied on. Now they can't issue debt at ANY rate than can be recouped by doing future work to future stuff (or they have to issue less debt; same effect).
The problem then comes with discretionary vs essential, and with parrying decay. The latter now accounts for 60% of our infrastructure 'spend', from memory, and rising. More and more folk are jettisoning the discretionary, which has a compounding effect across society (recession). That may well reduce demand but hardly justifies increases in interest... Then there is essential - when folk cannot purchase food (the primal form of energy for humans, indeed for all lifeforms) and/or water (corporates own the right to what lands on your roof...). All that system can do, is support less and less at the top end. Which is what we are seeing, albeit happening slowly in human-perception timeframes. At some point, it collapses - or has to evolve into accounting for forced and permanent degrowth.
Deflation...growth requires ever increasing activity...if that activity decreases then defaults must occur. That activity is fueled by energy...'money' is only representative....if you accept that our energy resources will decline, then the activity it provides must also decline.
Thus the petri dish analogy is relevant. The main issue is that humans are tangible and the majority cannot see past their own experiences. People used to want to do better for their children and make sacrifices now so their kids could have a better life, now everyone is focused on 'money' without considering the longer term effects of actions, resource draw down, and increasing energy demands for lifestyle and standard of living. Unless this can be addressed by society then we will never have any meaningful conversation or change in the matter, hence the most likely scenario being societal collapse by overreliance on a finite energy source.
You, in response to your demand, were given three things to read.
You ran a mile.
I call that chosen ignorance. Try reading them, and coming back explaining how 'economic theory' fits the real world.
And stop obsessing on the messenger, hey? That won't make the message go away. Just sayin...
PDK, I LISTEN TOO the b.s. you post most often. And I read the stuff you post too.
They all sound like you: Religious doomsayers praying for amageddon just so they'll be proved right.
Very soon - and I welcome the day - I'll never read your intransigent nonsense again.
I'll stop at the end of every article ...
(I guess you'll say the same about me. Enjoy your kingdom.)
I have read Gail Tverberg's linked article, and I actually agree with several of her predictions. But I am sceptical about the link to resource/energy to come to her conclusions. Her (and PDK's) overriding reason, is that there is insufficient crude oil for our expanding population.
"The critical issue we are facing is Peak Crude Oil, relative to population. Crude oil has fallen from .46 gallons per person, to close to .42 gallons per person recently"
I ask; Why is crude oil getting cheaper, or at the very least not rising in price, if there is a lack of supply of such a critical resource, and continuously increasing demand ?
I ask; Why is crude oil getting cheaper, or at the very least not rising in price, if there is a lack of supply of such a critical resource, and continuously increasing demand ?
There currently is not a lack of supply....there are however diminishing reserves. We are running at full steam to maintain that which we have and are at the point where IF demand increases we cannot increase supply, or if we do we bring forward the point where we cannot supply enough....that means we have plateaued in terms of growth.....it is downhill from here.
You may note that demand is declining...not because we dont need it, but because we cannot 'afford' it...in other words if we pay the true cost of energy we cannot provide that which we need to survive...i.e food. The EROI of energy is declining....we use more and more energy simply to obtain that energy and consequently have less left over for everything else.
Why is crude oil getting cheaper, or at the very least not rising in price, if there is a lack of supply of such a critical resource, and continuously increasing demand
It is getting more expensive, it's just that the direct and indirect subsidies are masking the 'price' increases. It's an accounting trick, nothing more. The higher cost of living and inflation is directly related to energy costs.
https://www.imf.org/en/Topics/climate-change/energy-subsidies
Globally, fossil fuel subsidies were $7 trillion or 7.1 percent of GDP in 2022, reflecting a $2 trillion increase since 2020 due to government support from surging energy prices.
The Saudis and others are also releasing additional supply to try to keep 'prices' low to undermine the transition to renewables (or more appropriately called rebuildables like solar, wind, etc...). The longer we stay hooked the more they can extract from us before it all goes tits up.
I also find the sustainability reporting for Corporates fairly interesting. Many of the listed companies now have roles that are well-paid that create a ton of work for parts of the business and cost a lot, especially in terms of reporting requirements. Many of these businesses appear to put more effort in to the reporting than actually changing any aspects of the business.
I feel that we are no entering the age of being able to have a proper conversation about the financing and non-financial costs and benefits.
The age of waffling, where more and more jobs exist without adding much value, the quality of leadership on average is in decline, ditto of the level of accountability of the wealthy and those in power. People are becoming more fragile, with lower attention spans, and are less able to hold a conversation, let alone discuss differing opinions and difficult decisions.
Hugh- great point.
Many businesses went into 'sustainability' in good faith (who would want to be sustainable?). But the reality is that most - very nearly all - businesses in our social construct, are based on resource draw-down and therefore aren't. That parallels the GND types who assumed they could drive an EV and party-on too (green growth, green jobs).
This society ONLY works on low-entropy (high quality) energy. The fossil pulse was a one-off, and we made a mistake (T K yesterday suggested supermarkets and flying to Europe) building an entire system dedicated to it. Still are; new tractors, new planes... If any of that stuff doesn't run beyond the fossil pulse, then pragmatically it was a waste of time.
A few friends got hired as sustainability advisers (I move in such circles) but they are either getting out, or have gotten out, or are hanging in for the money knowing full well it's horsepoo. Organic local food might classify as sustainable; things like repair might validly claim a slowing of resource demand; almost everything else is unsustainable. Or parasitic thereon.
Without internal reporting of where money is spent, senior management tends to focus completely on increasing sales.
Increasing sales - IMNSH expirience - can result in the business wasting huge sums.
Like they say, there are two ways to increase profit: increase sales or decrease costs.
And in our energy constrained (or should be energy constrained) times ... decreasing input costs goes straight to the bottom line.
IMO ... this will be the single biggest thing that defines 'success' over the next 10-20 years.
(See PDK ... We're on the same side.)
EDIT: Sheesh. Per PDK's comment above ... PDK is back on his doomsday loop again. Why do I bother ???
No, we aren't.
With respect, you're a mile away from where I am, cognition-wise.
Read those 3 items and have a wee think about how your above comment fits.
https://www.thegreatsimplification.com/frankly-original/80-thank-you-fo…
(I was chuckling to myself, listening to that last night)
Chris thought about this last night since you apparantly love figures and think i am barking up the wrong tree in regards to Tanner.
Well heres figures on my next project which I am doing right now.
32 Augustine St brought several months ago for 330k.
Mortgage free
Rented at 440 a week.
Has a quarter acre.
Am living at the back in our self contained 28ft caravan. No rent or out goings for us.
Waimate district council green space/park contrubutions 4374 dollars paid last week.
Sewage and water infastructure contributions 12k
Surveryor 16k
Lawyer 3500 includes LINZ.
Road crossing as not using same drive way 2500.
Thats all for survey.
Total 40k just under.
Now half sections selling around 140k so lets say 120k
Designer just lodge plans with council her cost 7500. Because this is the 4th time I have built this house same floor plan basically just took out walk in pantry put extra room into small bedroom. And gone from gable to hip roof as recession planes. Will build this for around late 280k ish. All up subdivision the lot.
No geo tech engineer as Waimate council says we live on a river bed.
No engineer as seperate garage not connected to main dwelling.
Will do everything myself apart from plumbing and electrical (step son will do) So thats the roof no scaffold needed as i am the owner. (Like tanner roof only cost 5k) If employing someone then yes. Already have ground preped ready to dig piles cost 1 thousand in dump fees all the rubbish the previouse owner left and organic matter. Which I dug out with spade and shovel over the break. How much if i went to rib raft concrete floor? Now the house have all the internal doors, vanities, heated towel rails, 2x heatpumps, ( and middle son who installs heatpumps will regas and fit)15 approx anchor piles, and around 200 x 2.450 90 by 45 douglas h1.2 stress grade 8 framing. All given to me from a mate in Queenstown who is doing a major reno in Jacks Pt on a 10yr old house and was going to skip it but found out i was doing this build. Will make up frames in-situ as the amount of f...ups made by manufacteurs plus have you ever tried lifting wet frames around. And will save approx 2k on that obviously trusses a pre made. So that should give you and inkling into why I can make the money I do. The last exact same house I built down here just around the corner brand new last yr, rents at 500 aweek values at 550k but lets say 500k (no mortgage) So plenty of figures for you. Have a nice day
Thanks Colin. I appreciate the feedback.
And if you put that all into a spreadsheet, how much will you being paying yourself per hour? You got the numbers together. It shouldn't take long. (Don't forget opportunity cost, e.g. just putting the capital into a TD.)
My wife teases me that the money I spend would be better in a TD. That's not true. It's better but not by a lot. But I get kicks, as you clearly do, in creating new stuff. Stick with it. Others can't do it. You can. We need many more doers in NZ and far fewer rentiers that contribute little.
And you are doing the work 99% cannot. You are living right on the edge of a massive collapse.
If only builders can do this there are not enough willing to live on a caravan on site making there own frames, this was what it was like back in 1970, not today. I remember building back in 1970 ....
Still beats being in a job and or business as only have to answer to myself no clients customers or boss whats that worth? Even if its 5 dollars an hour i am happy better than giving my savings to some CEO who runs the company into the ground yets gets a golden handshake and rides off into the sunset
"16k for the surveyor" In apr24 i paid $207/h incl for a sole surveyor business. Negligible travel time. So your surveyor worked ~77h based on my rate. Is that how long he worked on your job? This has to include some office time which maybe difficult to estimate. I priced my same job with a small surveyor group, about 50% higher. No Linz costs, ie boundary peg marking. That adds $1.5k to any job.
My surveyor comes out puts pegs in. Then when i have profile pegs in comes out marks height of piles and i put up horizontal timbers to set out exterior lines of building. Then comes out when floor joists are down. As only have 60 mil to play with with daylight recession plane. This way when doing the whole thing from subdividing to building I have covered my arse. Then he comes out when trenchs for sewage water and fibre is dug and sitting in place to make certains depths and they are in place. He (theres 4 of them) deals with council gets all consents for crossing form road into section. Gets consent for sewage to be tap into main line. And deals and helps planner to get set out of house at height etc. Well worth every penny
Very informative. Interested in the cost/m2, house only. If you can let us know m2 of the house with attached garage or house m2 and detached garage your other
I'm investigating some standalone additions to my residential property in NP. Will require a SED for structural work as both building outlines are trapezoidal. and I'll only use a designer to make pretty. Have some CAD skills so will do some design/layout work myself. Fortunately I'm retired so don't have to cost my labour
House is 124 sqm single garage 24 sqm obviously on a concrete floor. House on piles timber. Weatherboard iron roof. A basic remeber initial homes etc. A rectangle with all the services running along the back so ensuite, laundry, kithchen, bathroom, toilet. So plumber can put all grey wash into one pipe. And black into one pipe running along the back all under the floor easy access hence why i like piles.
So that's one line in an 11:35 Podcast. Just another guy full of waffle trying to make it using a computer. What a total waste of time that was. Pointless banging on about things we already know. Some idiot listened to 400 hours of that, I had pretty much hit the quit after 4 minutes.
Riffing on the car theme, the debt levels of major manufacturers are pretty alarming:
Publicly traded automakers with the highest total debt
And from another website, this time with other figures to help put those debts in context of the value of some of those companies:
Most Indebted Companies in the World for Jan 2025
And yes, I see that the two tables show different totals for VW Group and Toyota. It's more the approximate size of the debts that these tables highlight.
This can reflect either the cost of R&D of BEVs or (as suggested by others on interest.co.nz) it could be a sign that even successful companies are living on debt and running on fumes.
An alternative view could be that the companies are being clever by getting others to lend them money to run their businesses. In which case, when it all gets too much they can just hit up their government to bail them out. Astute business strategy right there (/sarc...?).
Aye, and the surgeons will push back more and more to ensure people get the absolute most out of their natural joints before they'll put it on the public system, as a joint replacement also has a time limit before revision is needed. Case in point: Stay healthy as best you can
Middlemore Hospital orthopaedic surgeon Paul Eaton said 95 per cent of the children he saw were overweight.
"The trouble with these children is they're not a little overweight, I mean they are majorly overweight. My youngest patient was a six-year-old who was 95 kilos. -link
10 years ago. Probably worse now.
Kinda crazy they still use a generic measure like BMI to assess weight for height without including muscle calc etc. I must be outrageously obese at 195cm and 124kg's at 47yrs. I'm also a gym fanatic and can proudly bench 200kg. I eat a high protein diet and also do plenty of cardio so I'm low fat body content and over index on the muscle side. Being retired definitely helps in finding the time to put in all the hours at the gym. This time of year is always crazy busy in the gym with a bunch of newbies and nearly all of them quit after 8 weeks. You need to put in a solid 6mths of 4-5 days a weeks and then your body craves lifting weights and working out. Super easy after that and the gains really start after the 12mth mark as you get into more sets, more reps and heavier weights. Lifting really heavy isn't required, you can make gains by doing more reps at lower weights. In fact, that's my preferred approach as it minimises injury risk.
Much better systems available (Bod Pod) but they are expensive, however I found a decent set of those scales that also measure body fat are at least as accurate as the calliper testing at the gym so you would think that they would have a set at your local doctors, then again when I tell them BMI is rubbish and why don't you get a set all they do is stare.
With little else today to do, back in my above playing time I was 6’ 2” & 14 stone. That converts to 1.88m & 89kg. Today if the hunch is unhunched the 1.88 remains and the 89 is now 94. Not sure how the BMI equates to largish type males. I did get up to slightly over 100kgs for a while living in the USA (sugar, sugar everywhere) but I have never felt or regarded myself as overweight.
Then we are the same height, but different weights.
8 years ago I was 103kg, but did a lot of weights - and ate at the Asian bakery across the road from work every lunch. Yep, I was fat. Regularly lost my breath climbing the stairs to my office, but I could climb a 15m grade 13 climbing wall with a 30kg weighted vest (go figure).
I've been back at my long-term average of 92kg for years now (developing a food allergy in my late 30s cured the bakery problem) - and got asked by a random kid at the beach on New Years 'why are you so fat'? "Years of comfortable eating and a lack of willpower to exercise".
Exercise, regular & meaningful, is the key. Therein lies my problem. Two cervical & one lumbar surgeries have explained to me that there is not much that you do that does not involve your back. It is very easy to aggravate things. Even just walking up hill or rowing a dinghy and at the gym now nothing beyond exercycle and treadmill.
I'm 1.87m, and 83-4kg. Nudging 70. Was 77kg @ 24, so added 6kg in 40+years. Walk, bike, but the best is swim. No thudding, no jarring, works through winter. Use it or lose it... Many of my contemporaries look like old people, some are hit with medical conditions, but a lot it's lifestyle, and a lot of that is doing what they're told and consuming... including food (...and Hugo said '" you go" and I said "no you go".... notice the rejection of exercise...)
Checked myself this morning and I'm just on the "good" side of a 30 BMI after the annual festive season blow-out. Being honest I could stand to lose some softness around my core, but I do a lot of heavy lifting (farming is a fantastic workout) so carry more muscle than average. Meat is mostly homekill, veges are homegrown, as are a number of fruits. Milk is straight from the cow. My wife does all our baking.
People think I'm about 10kg lighter than I really am. If I shave they think I'm 10 years younger too.
I daresay it's the chocoholic in me contributing to it, as well as the desk job I sadly have to maintain in order to afford to do the farming side. Unfortunately I did not inherit a farm (and fortunately I did not inherit farming debt) so I'm still working up to economies of scale. I may never get there as my pockets have bottoms but dammit I'm trying. I spend as much time as I can in the paddocks/around the sheds, but nowhere near as much as I'd like.
Sounds like child abuse. If their parents were giving them alcohol or drugs they would be taken off them, but giving them too much bad food is perfectly fine. Apparently the teeth are a problem too from fizzy.
Food has to be the biggest addiction problem, much worse than drugs / alcohol / gambling combined. We aren't even allowed to talk about it, if someone is fat its not their fault.
The problem is that the health care costs are socialised not user pays. I don't think user pays health like the US would work (the costs then get socialised through the insurance system). But the government could tax the things that contribute to bad health to disincentivise them and make it more like user pays. Maybe the entire health system could be funded through various excise taxes.
You mean like 'fast food' taxes and 'sugar' taxes to help fund the health system?
That would get my vote. However ...
They'd not get the vote of most of the cretins that believe it is all about 'personal responsibility'. Why?
It is NOT right ... don't cha know ... to tax the returns of the 'personal responsibility' crowd on the Coca Cola shares they own ...
There's calories and there's calories. Eating lots of potatoes is far less likely to cause Type II diabetes than shoveling refined sugar in on a regular basis (yes I'm aware the carbs in potatoes are in effect sugars in terms of the breakdown in metabolic processing).
The healthcare system is captured by Big Pharma. If you turn up to your GP with high cholesterol they dont tell you to change your diet, lose 20kgs, and get some exercise. Nor is there any means to make you do so (even drug addicts have the option of Rehab). They just prescribe you some statins. Ditto for Type II Diabetes which is basically a lifestyle disease.
Likewise the Govt is captured by Big Food. They are still pushing the mantra of "your diet should consist mainly of carbs with only a little bit of protein and no fat", whereas its well known that is completely wrong, and is the reason why half the population is now obese (and pre- or full diabetic). We still live in a world where Nutragrain which is 32% sugar is given a 4.5 star Health Rating.
Imposing taxes will not change the health misinformation and disinformation that is peddled daily, and believed by the masses. In the UK where a sugar tax was imposed, soda makers simply switched to using artificial sweeteners, which multiple studies have linked to increased fat storage and long term weight gain (not to mention the destruction of your gut biome, and cancer). The British still drink soda.
Now we have Ozempic, which will make you lose weight by starving you. But unless you want to look like Ariana Grande, eventually you will stop using it, and because your eating habits have not changed, you will put all the weight back on again. But thats great for Big Pharma, because they can sell you even more drugs.
Maybe one day we will live in a world where Ultra Processed Food is banned. Read/watch Chris van Tulleken for how the Big Food industry specifically designs food (or as he calls it "industrially produced edible substances") to lack satiety and stimulate hormones in order to make them more "addictive". Telling people that its okay to eat UPFs is much like people being prescribed Oxycontin for pain relief, who then found themselves addicted to it.
Until the masses are better educated, they cannot take personal responsibility. They already think they are doing that when they eat Nutragrain instead of bacon & eggs.
I used to think RFK Jr was barking mad due to mainstream reporting of him. Then, I took the time to read a book of his about Fauci and it got me interested in what he had to say. His multiple high profile court wins against Monsanto (Round Up) and other big corporates also make for fascinating reading. He has serious lawyering chops, so why do mainstream media portray him as nuts?
His take on the US food industry and how they have caused a cultural obesity and diet related illnesses epidemic make a lot of sense. The associated big pharma trying to fix you with never ending drug dependency is also compelling.
He fell out with the Democrats over his strong views on vaccine efficacy and safety. I had no idea that when the US adopted the Vaccine Act in 1986 it created a disaster where vaccine manufacturers had zero liability and they didn't need to complete the efficacy and safety trials that all other medicines are required to do. The late 80's onwards has a seen a massive spike in previously low frequency learning disorders, allergies and various other issues. Are they linked, who knows, but I like what RFK Jr is saying about needing to find out.
Something is seriously wrong with our kids (obesity, illnesses, mental health) and we need to look at what goes into their bodies as a possible cause.
True, however they still have oodles of sugary drinks that people still buy (addiction is proven to be a very profitable business model of course), yet they no have more tax to allow for healthcare spending vs NZ where diabetes is steadily growing and will be a greater and greater long term burden by means of ulcers, cellulitis, osteomyelitis leading to amputations, then the artificial limb support, hospitalisations for those unaware they have it and have glycemic event, the list goes on.
That would be easier to achieve if the modern world was set up for it. Half of our health system would be freed up if we all rode bicycles more often, but look at the pushback if anyone tries to build a cycleway. Furthermore, the vested interest that are promoting various toxic industries (tobacco, alcohol, to name a couple) are very powerful and effective at promoting their wares.
We have an excise tax on alcohol and cigarettes to disincentivise them and help pay for the harm they cause. We really need something similar for food and cars. You would think the likes of ACT would be all over this, why should the skinny / healthy dude pay the costs of someone else's food addiction and lazyness.
I like the idea of a calorie tax. 1c per calorie regardless of the type of food.
I don't. That is like GST, regressive to the poor. And many people earning minimum wage are in intensely heavy working roles.
I spent a considerable amount of my 20s doing heavy-lifting - and best I got was 40c above minimum wage. Lunch was 6k calories, and 40% of my income was going on food just to do the job. Note at this time I was 72-76kg.
Surely alcohol and ciggie taxes are regressive to the poor too. And most people could avoid the cost of the tax by eating less calories. They could even give a UBI that would pay for 2000 calories a day or whatever we are meant to have.
If we keep socialising costs then we will keep getting terrible outcomes. People need to pay for the choices they are making.
By the way I am not skinny myself, I make these bad choices too.
Huh?
"Adults living in the most deprived neighbourhoods were more likely to be daily smokers than adults living in the least deprived neighbourhoods (13.9% and 2.5%, respectively)."
https://www.smokefree.org.nz/facts/law-policy-and-research/smoking-rate…).
It's well known that lower socioeconomic groups are more likely to still be smoking at this point in time. Higher socioeconomic groups saw the writing on the wall and quit before the tax racheted up this high.
As for alcohol, the well-off will likely pay more excise tax in total, but there are certainly pockets in our most deprived communities that are paying a larger proportion as a % of their income.
Yes, some poor people make poor decisions re:alcohol and tobacco. But that is a choice.
People have no choice in the need to eat. A calorie tax makes no distinction between good and bad calories - and it's not so simple as 'high calories bad low calories good'.
I would be in favour for a tax based on how many processing stages a food product went through though.
In the meantime, short term rates have further to fall. There's little stimulation at their current settings. David Cunningham agrees (of course).
https://www.rnz.co.nz/news/business/538505/expect-sub-5-percent-home-lo…
If and/or when there is another pandemic the emphasis needs to go to self management. For instance if you are elderly with respiratory weaknesses (like me) make it your responsibility to stay out of harms way. That’s how it largely played out with covid in the USA. Hospitals and general healthcare didn’t have a snowballs chance in hell to cover and attend all of the population. Those that took care of themselves with sensible precautions were pretty much safe. Amongst all of that measures for obvious vulnerabilities , such as isolation of rest homes, must of course be implemented.
So the USA economy is super strong, and people are panic selling US shares because its hints as a reduced cycle of interest cuts.
When then to do about the NZX50 when NZ is in exactly the opposite position?
Also, congratulations if you bought USD a year ago. You outperformed the historical average return of the SNP500 (in NZ terms of course)
@lonewolfnz - How low do you reckon the kiwi peso will go ?
Been in and out of the USD since 2012 - first property, now crypto and it has done well.
While I always hold some USDC or USDT
So if NZ Inc.lowers interest rates, as they are really caught between "a rock and a hard place", we will hit USD 0.50 very soon ... then could even see 0.45 ?
Also, congratulations if you bought USD a year ago. You outperformed the historical average return of the SNP500 (in NZ terms of course)
Why would you buy USD Wolfie? Are you hedging something? What?
DXY up 6.6% in P12M. USDNZD up 11% over same time period. SPX up 33%. You would have been far better off in the S&P500. Forget this historical nonsense.
And gold even up 31% in USD. And it does nothing. The thesis that most of the gains in equities are the result of monetary shenanigans shouldn't be taken lightly.
Anyway, long-term USTs will continue until the USD is weakened. With 125% debt/GDP, 7% deficit/GDP, & US receipts sensitive to 10y ylds, US rates will hit a level that causes UST market dysfunction well before foreigners run out of $8.5 trillion in USTs to sell to defend their currencies.
I think it's a fair comment. Unlike in the US, in NZ the mortgagor can choose the length of the term. This might become very important at a time when long term rates are rising and short term rates are dropping !
Edit, nothing to do with "Ponzi" but it surely can ease servicing costs.
I think it's a fair comment. Unlike in the US, in NZ the mortgagor can choose the length of the term.
I see. Surely if the opportunity to reduce debt servicing costs is greater in Aotearoa than the US of A, that's a good thing, right?
But in reality US holders of long-term fixed mortgage debt can be in a better position than Aotearoans.
All my american friends are on 30 years @ 4.5% or less. The GFC & covid made refinancing (or new) at such rates an absolute no-brainer.
Not necessarily. Once low-cost fixed terms are broken, it's over. Many Americans can't actually afford to sell their homes and / or move.
The California FAIR plan (insurer of last resort) apparently has $200m of cash + $2.5b of reinsurance.
They have $5.9b of exposure in Pacific Palisades alone.
CA passed a law preventing them from including reinsurance costs in their premium calculations.
Insolvent.
https://www.bankrate.com/insurance/homeowners-insurance/california-fair…
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.