Here are the key things you need to know before you leave work today (or if you work from home, before you shutdown your laptop).
MORTGAGE/LOAN RATE CHANGES
NBS (Nelson Building Society) cut its fixed rates today by between -15 and -25 bps. Update: Westpac cut some key rates. Details here. All rates are here.
TERM DEPOSIT/SAVINGS RATE CHANGES
The risk-free NZ Government Kiwi Bonds have had some rate reduced. More here. NBS also cut its popular TD rates, by between -5 and -15 bps. Update: Westpac cut some key rates. Details here. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
MORE OUT, BUT EVEN MORE IN
Although a record number of people left NZ in the 12 months to November, there was a larger flow in so the population rose from migration by +30,000 in that period.
A SLOW GRIND HIGHER
Tourism arrivals rose +5.9% in November from the same month in 2023 to be at 86% of pre-pandemic levels. That makes it six consecutive months of arrival numbers above 85% of pre-pandemic levels for the first time.
SUCCESSFUL BOND TENDER. YIELDS STABLE TO SOFT
Twenty-nine bids of the 144 made today at the NZGB bond tender offered $1.76 bln for the $500 mln available. The May 2031 $200 mln went for a yield of 4.24%. little different to the 4.19% at the prior equivalent tender 14 weeks ago. The May 2036 offer was new and that went for 4.75% YTM. The $100 mln May 2041 went for 5.04% and less than the 5.14% at the prior equivalent tender a week ago.
A SURPRISE CUSHION TO THE BIG OBEGAL CROWN DEFICIT
The Crown accounts for the five months to November 2024 came in pretty much as forecast in the HYEFU. So the OBEGAL -$4.7 bln deficit for those five months was as expected. But this was only -$100 mln worse than for the four months to October. On a full operating balance basis however, a surge in valuation gains via the Crown's ACC and NZ Super organisation investments allowed them to report an overall -$150 mln deficit year-to-date after an almost +$2.5 bln valuation surge in the November month, which was substantially better than the FYEFU forecast.
RECESSION SHOWS UP IN THE CROWN TAX TAKE
Deeper in the Notes to these November Crown accounts we can see the year-on-year rise in personal income tax receipts was only +4.0% and that is more than a 12 year low, and reflects the tough jobs market at present. We can also see that GST actually took in -2.0% less in the year to November than the same period a year earlier, also pointing to subdued the retail environment. (But at least the November-on-November result was positive, although mainly because November 2023 was so weak.)
SAVERS PAY MUCH MORE TAX
One area of the Crown accounts that is growing is the tax take from savers. That is up almost +30% from the same tax take in November 2023. Higher interest rates and the move by savers out of low yielding accounts into higher paying ones gives the Government a double benefit on their 'share'.
DATA TRUMPS SPIN
MSD released its December 2024 Benefit Fact Sheets today. And the Minister released her spin, finding "positive signs in our welfare reset". We have been tracking this data for a long time (since December 1998) and can report the December 2024 is the highest number of people on benefits as a proportion to the working population (11.7%) since the 12.1% in December 2011. Almost all categories are rising. The JobSeeker benefit is now paid to 213,300 claimants, the most since these modern records began consistently in 2008.
NZX50 SUBDUED
Here are the key changes to know about in the New Zealand equity market. As at 3pm, the NZX50 is up +0.3%. Kathmandu, Air NZ, F&P Healthcare, and Infratil lead the gainers. SkyTV, The Warehouse, Investore, and Spark are the biggest decliners
MODEST TRADE GAINS
Japan said its exports rose +2.8% in December from a year ago, meaning that eleven of the past twelve months recorded export growth. Only nine of the past twelve recorded import growth.
SOFT GDP BUT JANUARY SENTIMENT PICKS UP
The rise in South Korean business sentiment in January comes after authorities there reported a quite soft Q4-2024 GDP growth outcome.
SWAP RATES HOLD AGAIN
Wholesale swap rates are probably little-changed today, maybe very slightly softer, but keep an eye on our chart below which will record the final positions closer to 5pm. The 90 day bank bill rate was down -1 bps on Wednesday at 4.05%. The Australian 10 year bond yield is up +3 bps at 4.53%. The China 10 year bond rate has regained +2 bps to just on 1.66%. The NZ Government 10 year bond rate is up +4 bps at 4.73% while today's RBNZ fix was 4.68% and also up +3 bps. The UST 10yr yield is now just on 4.61% and up +2 bps from where we were this time yesterday. Their 2yr is up +1 bp to just on 4.30%, so that positive curve is now at +31 bps.
EQUITIES QUITE MIXED
The NZX50 has risen +0.2% in late trade today. But the ASX200 is down -0.6% in afternoon trade. Tokyo has opened its Thursday trade up +0.6%. And Hong Kong is up +0.7% in a recovery with Shanghai is up +1.4%. Singapore is up +0.4% at its open. Wall Street closed up +0.6% in its Wednesday trade on the S&P500 taking it to a new record high.
OIL DIPS FURTHER
The oil price is down -50 USc from this time yesterday at over US$75.50/bbl in the US, and now just over US$78.50/bbl for the international Brent price.
CARBON PRICE HOLDS
The carbon price is unchanged at NZ$64/NZU. The next release of units at the official auction is on March 19, 2025. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD FIRMISH
In early Asian trade, gold is up +US$3 from yesterday, now at US$2751/oz.
NZD FIRMISH TOO
The Kiwi dollar has risen +10 bps from this time yesterday, now at 56.7 USc. Against the Aussie we are unchanged at 90.3 AUc. And against the euro we are up +20 bps at 54.5 euro cents. This all means the TWI-5 is now just over 67.2 and up +10 bps from yesterday.
BITCOIN SOFTER
The bitcoin price has moved down to US$102,812, down -2.9% from this time yesterday. Volatility of the past 24 hours has been modest at just under +/- 1.8%.
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72 Comments
Sad parenting.
I'm minding my motel to give my managers a break. A 14 year old girl checked in yesterday with two minders because she's a minor. I spoke to her, she seemed nice. Last night the minders called the police at 1 am (the minders are not allowed to restrain her), because the girl had a big fit, because she wanted to go back home to mum, but obviously she can't. I don't know the details but things must be really bad at home.
Separately, we also have a family of 5 kids with mum. Mum is hiding in her bedroom all day long, the 5 year old boy took a liking to me because I talk to him and involve him in really easy tasks, he can't count to 3 or recognise letters of the alphabet. He's desperate for some interaction.
I feel so sorry for these kids ;-(
The gap between the have good parents and the have nots is growing by the year. Mobile phones don’t help, even some otherwise ok parents ignore their kids while continuously browsing crap. Hard to know what the solution is, I do think the law needs to come down on this child abuse, it needs to be as illegal as hitting kids. There shouldn’t be a need for schools to be feeding kids either when a loaf of bread is $1.19. Feed the kids then send a social worker over to find out why the parent didn’t.
Mind you, the economic ROI on universal school meals is 2.5-7x each dollar invested, in high income countries. We could certainly stand to - for example - reduce landlord rental yield welfare subsidies and property price subsidies in favour of such an investment.
It'd be a much better investment in society.
Ironically, they're partly a result of the system you promote, with respect.
Winners take more and more, the poor get the picture. And turn to solace, which may involve drink and/or drugs. They are also, by definition, the least able to look after themselves.
And, to be blunt about it, if landlords weren't rentier-ing off the poor's ever-less cut of the (now shrinking) pie, they might have more room to wriggle.
Buy some books for the boy - Seuss comes to mind for that age/stage. Read to him. Won't take long. You might find it's second-generation, though....
This seems to be the western theory. But if you look to Asian countries, many poor want to help their kids up to have a better life they never had. Vietnamese immigrants at our bakery work long hours to put their kids through uni for example. Maybe while we keep on excusing this behaviour it just becomes worse.
Vietnamese immigrants at our bakery work long hours to put their kids through uni for example. Maybe while we keep on excusing this behaviour it just becomes worse.
Without wanting to stereotype, Asian values lean towards hard work and sacrifice for the family. Fits in with Confucianism, which strongly emphasizes the importance of education and self-improvement. It holds that human beings are fundamentally good and can be perfected through learning and self-cultivation.
Aotearoans generally aspire to the car, boat, rental property, and flash Harry accessories. When they achieve that, their work is done.
JC seems too motivated to tear down NZ without first applying the same scepticism to whichever other territory he's holding up.
Cultural differences P. We know that generally speaking savings rates are higher in Asia. Studies suggest that cultural factors, such as Confucian values, may contribute to higher saving propensities. Whereas Aotearoa is more about based around the paycheck to paycheck / spending like drunken sailor lifestyle.
There are other factors such as welfare dependency, which is greater in Aotearoa than Asian nations.
https://www.cbo.gov/sites/default/files/111th-congress-2009-2010/workin…
Cultural differences P.
Or just, you know, time.
Most cultures are assimilating to the same place, it's just that the West has been spearheading it.
NZ has more social welfare dependency, because in many parts of Asia, it barely exists.
Credit card debt in South Korea
High Youth unemployment in over educated China.
You're trying to remove others rose tinted glasses, by putting on your own.
Agree. Back in the seventies, which is as far back as I can remember, no one I knew had a rental, flash car, etc etc. maybe a basic boat with an outboard to catch a meal for the family, rather than a raw nautical display of big dickmanship? Yep, current Kiwi culture has been decades in the training.
At least our politicians are working tirelessly to bury the last of our humanity, as we swap the last of our freedom and natural environment for devaluing bank digits.
100% agree. It's a cultural issue in the West that includes every social economic group. I'm gen X and can safely say my generation of Western parents are the worst ever. We are for the first time in recorded history producing kids that are dumber, sicker and less able to cope in the real world than the generation before them. Gen X have disappeared down the woke rabbit hole, got life advice from social media, fed our kids processed crap and sugar, applied zero consequences for actions and used screens to occupy our kids. We've also implemented valuing participation instead of performance. The end result is a generation of kids who are obese, depressed, can't read or count, can't string a sentence together and completely unable to understand acceptable levels of behaviour. They are stuffed and it's our fault.
My grandparents were in WW2 and were tough as nails. My parents generation were post war babies and worked their asses off to provide a wonderful childhood and build wealth for the family. My generation has had it too good with excellent education and opportunities that comes for those that strive for more. Those who haven't chased a better future have devolved into useless grifters that refuse to accept responsibility for anything.
Too much of a good thing is not good for humans, we need adversity and competition to bring out the best of us. Otherwise, we self destruct....
"Those who haven't chased a better future have devolved into useless grifters"
Maybe wall to wall marketing had something to do with it? Psychological pressure to buy sh!t you don't need with credit that's doled out like lollies? The ability to be self sufficient has been trained out of us by the actual grifters. Ideologically motivated elites determined to create a world in their self entitled image!
And for one of the best examples, look at Japan's excellent school meal system. It's been a great investment for society.
I've lived in a poorer Asian country and worked in poverty alleviation there. I would not view them with rose coloured tines any more than I would with contempt. The poor communities there had remarkably similar social symptoms to the poorer communities in NZ.
The only way to break the cycle is to get thesse kids into a stable environment and then education. I'm involved with one such organisation, it's expensive to deliver and emotionally very tough work on those on the front line. Until we as a nation recognise and value this work, nothing will change. Funding has become very tough under the coalition (even though we have the most bloated cabinet in our history).
I have seen kids like you describe go on to complete high school and get into trades and the workforce, it is possible if we don't abdicate it to someone else to do.
Trades and the 'workforce'?
Why that as a goal. Sheesh. I was paid, once, by the DOL, to teach 'work skills'. We taught English, math, how to budget, how to cook, how to inter-relate with society (had Legal Aid talk to them about tenancy, stuff like that). Work? Cama a long way down the list...
How about rounded, skilled/capable, self-respecting members of society?
Why the money default? Always. Why so ingrained? Life is more than being a brick in the wall. Or should be.
I agree. My kids will see first hand what happens when living standards drop as a result of resource depletion. My kids at least will know how to grow their own food and maintain and build shelter. Most won't and that is a scary prospect for when the inevitable happens. I've seen enough movies to know what happens if you can't survive on your own.
Survival skills are useless when the herd arrives to strip your garden and use your shelter as a bonfire.
We are all in this together, like it or not. It's in our collective best interest that our country survives as a functional society, although in saying that, our elected officials are doing their damnedest to ensure our country is already a train wreck before depletion SHTF time.
My money's on more of a Blade Runner/Elysium style dystopia. The bulk of the populace having little, but drip fed enough goodies to keep them placated.
The fact we have a democracy, but can't seem to put forward actual representatives to run in it, leads me to think we'll just continue to take it.
There are only two ways forward from here, techno utopia and power down. Techno future requires fusion energy generation to be a thing, but of course if it's combined with having the growth cult still in charge, humanity will continue to lurch onwards through biophysical crisis after crisis until natural life support mechanisms have collapsed and survivors live in extra terrestrial metal boxes with flashing lights and bathing in cosmic radiation.
All depends when the "energy too cheap to meter" arrives, if at all? Before fossil depletion really hits the downslope. Before we've committed to the tropics and coasts being uninhabitable? It'll only be the top 10% that benefit anyhow, the rest will still cook dinner over a dung fire.
The power down option is more interesting and hopefully gives humanity a future worth living. The world will get big again and the human superorganism smaller. Societies will again develop in relative isolation. Some feudal, some egalitarian/democratic, and of course there will be psychopaths able to raise an army and pillage neighbours efforts at survival. All will come and go, but never again to have that massive energy surplus that propelled us to dream a Star Trek future.
I don't call it Utopia (with apols to Thomas More).
I call it 'optomal living within Plsanetary Boundaries'.
More accurately, we're not drawing down finite resource stocks; we're not diminishing renewable stocks faster than they can replenish, and we're not filling sinks (waste/pollution ejection) faster than nature can deal with that.
Within those constraints - which nature will apply to us if we don't, and it won't be pretty if we wait for her - we can choose a rate of consumption per head, and that will determine the optimal population. Globally, 2 billion could live long-term at good-peasant level, and somewhere south of 1 billion at our - temporary - level.
Notice I haven't mentioned money, yet? The question is really: How do we construct a token/tading system, to fit with the above. And I suspect it won't involve interest/usury, and won't be fiat-levered, and won't be debt-issued.
A bonus - and to my mind, fair compensation for a reduction in tatt-consumption - is that we can think and learn, unlimitedly. Maybe we might choose out politicians on that basis, too.
Apart from the eugenics potential, it's probably close to the mark.
In the 90s, authorities in the states patted themselves on the back due to declining crime rates. Broken window policy being effective, etc.
Turns out it was a lot more to do with abortion being legalized in the 70s.
Nope
All that would happen is that things would become even more dysfunctional, crime rates would soar etc etc
I will be torn down for saying this, but I actually think a co governance model is a good option for these sorts of things and more. Let Maori take ownership of the issues that plague many of their people, take it away from a central, impersonal bureaucracy
Of course these issues aren’t confined to Maori, but they are disproportionately concentrated amongst Maori
I'd go a step further and pay them to not have kids. Churning out babies for benefits is not a winning strategy for anyone. We've created a welfare state that was brilliant with intent, but has created perverse outcomes. The losers are the unwanted kids with no futures and the poor taxpayers who fund it all.
TK well said with it not reaching the kids…I’d support kids getting breakfast & lunch at school, shoes & jackets, a Chromebook to use in class, sports fees & equipment provided (sports keeps kids out of courts kinda thing)…keep that tax cut & maybe use it that way instead…I completely understand the “it’s not the states responsibility” but these kids didn’t choose to be born to sh*t parents & if they don’t get help then surely it’s a rinse & repeat recipe for an ongoing cycle eh.
We've had a job recently with two neighbour kids so deprived of parenting they shadow us all day. The youngest one is non vocal, but can understand most of what you say. We've been giving them fruit in place of the chocolate biscuits they're walking around with.
When watching tradies work all day interests kids, you know there's problems.
Kids' minds are inquisitive, children seek interaction, recognition, praise or even just a smile. If they don't get it from their parents at a young age they will look for it elsewhere, it doesn't matter if it comes from a builder, a motelier or anyone else well meaning.
Yes, and at about 1.30am the Police with minor child are knocking on the door of the grandparents saying you are the next of kin can she stay here?
My wife and I deal with this everyday as the advocates for the grandparents who have no idea what to do, who to approach, where the $ are coming from to feed another mouth let alone clothes and basic necessities. The are ways and means to get through this but it is stressful, time consuming and just downright disheartening trying to navigate the social welfare system. If the grandparents are working then it's worse.
Both in our 70's advocacy under Grandparents Raising Grandchildren is voluntary. No recompense of time and energy. 200 plus on the books in this part of Eastern Waikato and that's the ones we know about. There are success stories however.
Emergency housing is usually for people who's life circumstances has them in sudden need for alternative housing, often domestic violence.
How that needed to come into play is by continually shrinking familial or social groups, and increasingly fragile parental relationships.
Society has in many ways gone backwards over the last 20 or so years.
Lack of responsibility by some parents. Blaming someone else and or looking for handouts. Young children not being taken care of, poor school attendance.
Drugs are everywhere, that money not available for the upkeep of the family unit.
Western society could take some pointers from Singapore's more rigid stance.
If you haven't already, I strongly suggest a read of "Life At The Bottom" by Theodore Dalrymple. It would be a fairly old book now (written about increasing crime, poverty, societal 'decay' in the UK with a focus on the so-called "underclass") but the principles apply here too. Don't agree with all of his work, nor the term underclass, but there are some good insights.
I asked ChatGPT to give a brief summary ... it's been a while since I read it but this seems to hit the nail on the head:
-
Rejection of Personal Responsibility:
Dalrymple argues that a widespread avoidance of accountability contributes to societal dysfunction. Many individuals blame external factors—such as upbringing, societal oppression, or bad luck—for their problems, which undermines their ability to improve their lives. I would you can see this in action in the NZ justice system. Commit a crime and some financially-incentivised-to-do-so lawyer or do-gooder judge will claim you aren't responsible for your own actions you are merely a vessel adrift in a sea of previous misfortune. -
Cultural and Moral Decay:
The erosion of traditional values, such as hard work, self-discipline, and respect for others, leads to a sense of nihilism and meaninglessness. This cultural decline fosters destructive behaviors like crime, substance abuse, and family breakdowns. -
Over-Reliance on the Welfare State:
He believes that generous welfare systems encourage dependency, discourage initiative, and strip individuals of their dignity. This reliance can perpetuate poverty by creating a cycle where individuals lack motivation to pursue work or self-improvement. -
Influence of Intellectual Trends:
Dalrymple critiques modern intellectual movements, such as moral relativism and the excessive focus on self-esteem, which he sees as undermining critical thinking and ethical standards. He argues these trends excuse bad behavior and erode societal cohesion. -
Breakdown of Family Structures:
The rise of single-parent families and the absence of stable parental figures are identified as significant contributors to the underclass’s struggles. Without strong family support, children are more likely to face emotional and behavioral problems, perpetuating the cycle of dysfunction.
"avoidance of accountability contributes to societal dysfunction. Many individuals blame external factors—such as upbringing, societal oppression, or bad luck—for their problems"
That's spot on, like some posters on this site, blaming the year they were born, for their misery.
They are dead right.
And I'm not one.
I could buy a house for 7k, in 1983.
They can't.
There are 8 billion now, where there were 4 billion then, and competing for a much more depleted planet. Of course they see that (just as you patently need to dismiss that reality. As I said away upthread - you are a real part of the reason for them...
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