A dollar each way: the economy in 2023
A major bank has tempered its view on how high they think the Reserve Bank may need to push the OCR as we wait for the year's first official indicator of whether inflation is easing
In today’s edition: millions of dollars of damage caused by Cyclone Hale; a year on from the eruption of Hunga Tonga-Hunga Ha’apai; the case against the capital city being Wellington; but first, we’ve been told 2023 will be rough, but large amounts of uncertainty aren’t making it easy for economic forecasters
Welcome back, Bulletin loyalists. We actually had a good spike in subscribers over the break so welcome to new readers too. Despite the weather cutting the traditional summer holiday a bit short for many, I hope those that had a break had a good one.
2023: here comes the hangover
To a certain extent, the year is still loading on the news front so I thought this week we’d take a topic each day and round up projections, commentary and the current state of play. First up, the economy. Here is the Herald’s Liam Dann (paywalled) with his assessment. “We’re awake, we’re feeling queasy and we know we overdid last night –although the details are a bit hazy,” writes Dann. Dann has looked at the various forecasts made by economists and concludes that while things look rough, the question is still “how rough”, writing that “things could still go either way from here.”
ANZ tempers view on how high the OCR may go
ANZ has tempered its view on how high it thinks the Reserve Bank (RBNZ) will need to push the Official Cash Rate (OCR) to get inflation under control. BusinessDesk’s Rebecca Howard (paywalled) reports that ANZ thinks the RBNZ’s November monetary policy statement (MPS) “appears to have gotten traction”. ANZ’s card spending data for December showed a reining in of spending. Stats NZ releases retail card spending data for December on Wednesday. I certainly felt like I had a small Adrian Orr perched on my shoulder for much of last month. We get the Q4 consumer price index (CPI) data on January 25. This will confirm whether my sparkling Christmas party banter about Orr’s call to everyone to “cool the jets” being an incredibly effective bit of communication was accurate as well as boring.
Job ads fall, applications per job ad rise
US inflation data released last week is being taken as a sign that the global inflation crisis may be easing. US inflation peaked at 9.1% in June and is now at 6.5%. BNZ’s Mike Jones is of the view that inflation has peaked but he positions it less as good news than “just some less bad news.” Over half of all mortgages will roll over in 2023. Where the current average home loan rate is around 4%, Jones predicts it will get to 6.5% regardless of what the OCR is. We get the next OCR announcement on February 22. Data from job site Seek shows the beginnings of a cooling labour market. Job advertisement levels declined in December, while applications per job advert recorded the greatest monthly increase since March 2020.
This year could be “one of the hardest in living memory”
To end, Newsroom’s Emma Hatton has a really good interview with Wellington City Missioner, Murray Edridge. Like Orr, he has a pretty direct message for everyone. Edridge thinks this year could be one of the hardest in living memory for those already on the brink. He spends a lot of time engaging with communities who don’t – and won’t – need extra help. “Let's face it, for most of us the cost of living crisis is an inconvenience or a frustration. So for people in that place who are thinking: what about the people who don't have what I have? Don't look like I look? What about them? Do I need to pay attention to that? My answer is yes, you do.” His message for those of us who won’t be needing support from organisations like the City Mission? “Cut people some slack and treat people with dignity, irrespective of their circumstances.”
You’re invited to the Carpet Club - a Spinoff live event
The Carpet Club is a subterranean Spinoff at the Morningside Live Block Party being held on February 5 in Morningside, Auckland. Join us for live comedy, live podcasts, live drawing and live human conversation. The Spinoff Carpet Club will span a range of Spinoffy things. Snappy, guest-star-sprinkled live versions of our podcasts Gone by Lunchtime and The Real Pod, live comedy from Chris Parker, Janaye Henry, Guy Montgomery and Courtney Dawson, plus Toby and Toby: Toby Manhire interviewing and Toby Morris live-drawing some very special guests. Tickets are strictly limited so get in quick.
Millions of dollars of damage caused by Cyclone Hale
To the weather now because let’s face it, it surpassed watercooler banter territory and became a huge news story. The Thames-Coromandel district council says Cyclone Hale has done millions of dollars of damage. It’s a particularly tough one for an area that doesn’t have a huge rate-paying population but does have high numbers of visitors over summer who use the region’s infrastructure and facilities. MetService is now keeping a close eye on a potential cyclone system that may be developing to the west of Vanuatu. For what it’s worth I endorse comedian Chris Parker’s idea of a “Summer 2.0”.
A year on from the eruption of Hunga Tonga Hunga Ha'apai
Newshub’s Isobel Ewing is in Tonga at the moment, where the Newshub crew is the first news crew in the world to visit the tip of the submarine volcano since it erupted. The eruption of Hunga Tonga Hunga Ha'apai was the most violent explosion on earth in 140 years. Ewing has spoken to first responders, politicians and tourism operators about life in Tonga now and their memories of the day of the eruption. The Herald’s Jamie Moron also has this report on new findings from New Zealand scientists about the subsequent tsunami that reveal the tsunami towered 20 metres above the Tongatapu, ʻEua and Haʻapai islands.
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A rough weekend for Wellington
Stuff’s Charlie Mitchell has penned a blistering manifesto on why Wellington should no longer be the capital city of Aotearoa. It's laugh out loud funny in parts, quite brutal in others but he also makes some pretty fair points. Have a read and find out which city he suggests should be the new capital. Meanwhile, perhaps as an act of penance or just pure dedication to the craft, Newsroom’s Jono Milne takes a walk on Cuba Street in literal walk shorts and knee socks. Milne, based in Auckland, wrote a piece last year titled “Why does everybody hate Wellington?” He was subsequently invited to visit the city and have dinner with new mayor Tory Whanau to persuade him of Wellington’s charms. He’s written that up and discloses that while the trip was funded by Wellington’s economic development and tourism agency, the walk shorts, socks and styling were all his own.
Click and collect
Stuff’s Todd Niall evaluates Auckland mayor Wayne Brown’s first 100 days
Ngāti Whātua Ōrākei calls for the return of taonga listed for sale by the auction house Sotheby’s
Alliance of organisations calls on all political parties to make housing election promise
Hell of a tangled web unspooled by Stuff’s Steve Kilgallon here - the Auckland ghost kitchen that ghosted its own staff
Duncan Greive hits the mic early this year with a couple of solo podcasts on The Fold. The first asks what Plan B is if the TVNZ/RNZ merger goes south, and the second looks at what developments in artificial intelligence means for the media.
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Jacob Metzger bids farewell to the days of cheap and cheerful van camping ahead of new potential freedom camping laws ; Stewart Sowman-Lund speaks to Gerard Johnstone, NZ director of horror megahit M3GAN; Nadine Hura reflects on the dying art of home sewing; and Airana Ngarewa pays loving tribute to his koko, Hemi Ngarewa, recent recipient of the Queen’s Service Medal.
A rare chance to see FIFA World Cup champions play this week
The US women’s football team and world cup champions play the Football Ferns in two friendly games this week ahead of this year’s FIFA World Cup in July. The first will be played at Wellington Stadium on Wednesday afternoon, and the second at Eden Park on Saturday afternoon. It’s a pretty rare opportunity to see both teams play. Until last year the Football Ferns had not played at home since 2018. Stuff’s Phillip Rollo has a good preview and outlines why the world cup will be the biggest sporting event to come to our shores and just how huge the women’s game has become.
Geezer Happy Hour
“Just one thing distinguishes the crowd from nearly any other rock ’n’ roll show in a small city in America: Almost everyone is over 65. OK, two things: The show always starts at 6.30pm and ends at 9pm, in time to get to bed at a reasonable hour.”
Let us start gently with the long reads this year. Here’s a joyful one from the New York Times on “Geezer Happy Hour”, the coolest rock show in Ann Arbor, Michigan.