Hold the roosters, no economic dawn yet
Treasury likely to downgrade economic forecast while Chris Bishop says the government won't be 'a slave to a surplus'
Mōrena, and welcome to The Bulletin for Friday, November 22.
In today’s edition: ministry finally releases evidence brief on puberty blockers; Māori electoral roll grows; the fundamental flaws at the core of our tax system; a new Spinoff ranking described by the editor as “the hardest” we’ve ever done; but first, Treasury says recession will be deeper and last longer than predicted
Recession will be deeper and last longer — Treasury
At a recent Spinoff Live event in Wellington reviewing the year, I said it had been a good year for torturing metaphors involving dawn and darkness. Finance minister Nicola Willis said it was “darkest before the dawn” in her pre-Budget speech on May 9. Since then, inflation has fallen (a feat claimed by the government), there have been cuts to the Official Cash Rate, with another expected next week, and home loan interest rates have dropped. Clouding over these chinks of light is Treasury’s expectation that its economic and fiscal forecasts relative to the 2024 Budget will be downgraded. Yesterday, its chief economic advisor, Dominick Stephens, delivered a speech saying the latest evidence suggested the recession would be deeper and last longer than predicted in May.
Government will not be a ‘slave to a surplus’
For political economy nerds, December 17 has been aggressively circled in the calendar. That’s when Treasury will provide its half-year update known as the Half Year Economic and Fiscal Update (HYEFU). Willis will also preview Budget 2025 in her Budget Policy Statement (BPS). The HYEFU, undoubtedly deserved of a spot on a list of the best governmental acronyms, and the BPS are two of the last big political setpieces of the calendar year.
As the Herald’s Jenée Tibshraeny writes (paywalled), associate finance minister Chris Bishop is tempering expectations of a return to surplus by 2027/2028, as forecast by treasury when the Budget was delivered in May, a year later than National promised before the election last year. Commenting on Stephen’s speech yesterday, Bishop said the government will not be a “slave to a surplus”.
Economists call for halt on spending cuts
As interest.co.nz’s Dan Brunskill reports, a group of economists have written to the finance minister asking her to rethink plans to aggressively rein in government spending, which they believe is worsening the recession. The letter was written by former Productivity Commissioner Ganesh Nana and co-signed by 14 others. As Brunskill notes, many, like Council of Trade Unions economist Craig Renney are known left-leaning thinkers, but the group says it’s not partisan.
Split opinions of government’s delivery on promise to fix economy
In an opinion published by the Herald yesterday (paywalled), Robert MacCulloch, who is not a signatory to the letter, and holds the Matthew S. Abel Chair of Macroeconomics at Auckland University, wrote that Willis has not yet proved herself as finance minister and that she is “missing in action when it comes to breaking local monopoly powers, which are the main cause of our high cost of living”.
That’s in stark contrast to the assessment given by business leaders for the Herald’s “Mood of the Boardroom” in October (paywalled), where “a significant majority of executives” expressed trust in her management of the economy as finance minister. Optimism about the New Zealand economy among the group also surged to its highest level since 2016.
When Mood of the Boardroom was published, Matthew Hooton wrote that Willis should be leading the National party and Labour’s finance spokesperson, Barbara Edmonds, her party. In an opinion piece published by the Herald this morning (paywalled), Hooton reserves his sharpest criticism about the country’s current economic woes for prime minister Christopher Luxon. “Bereft of a deep understanding of the New Zealand economy and its recent development, Luxon had nothing to offer but some modest yet unaffordable tax cuts and a belief his mere election might motivate an economic boom,” he writes.
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Ministry releases long-awaited evidence brief on use of puberty blockers
As Stewart Sowman-Lund reported for The Spinoff in September, the release of an evidence brief related to the safety, reversibility, mental health and wellbeing outcomes of puberty blockers has been delayed several times. The brief was initially set to be made public in late 2023. It was finally released yesterday. The brief says that evidence on the benefits and risks (or lack of either) of puberty blockers when used to treat gender dysphoria in children and young people is limited. The ministry has urged “a more precautionary approach” for the care of adolescents with gender identity issues. A doctor providing gender care, Dr Massimo Giola, said the ministry's position was “reasonable” and would not change the way in which he practised.
Māori electoral roll grows
As Stuff’s Bridie Witton reports, the Māori electoral roll has grown by nearly 1800 people in three weeks. According to the electoral commission, 1309 people switched from the general roll to the Māori roll in November, up from 59 in October, while 487 people enrolled for the first time on the Māori roll. Te Pāti Māori MP Hana-Rawhiti Maipi-Clarke called for “every single Māori person” in the crowd at parliament on Tuesday for the final leg of the Hīkoi mō te Tiriti to take their phone out and register to vote on Māori roll.
Writing for Herald subscribers yesterday, Audrey Young has cautioned anyone underestimating the political significance of the hīkoi. “The bill has enabled Te Pāti Māori to recruit a new generation of Māori to drive the Māori sovereignty movement for generations to come. Exactly where that will lead is unknown but, without a doubt, it will lead to change in the exercise of power in New Zealand,” she writes.
The Spinoff Live in Auckland: The Year in Review is on sale now
After a sold-out event in Wellington, Anna Rawhiti-Connell will take a running jump backward into the year’s biggest headlines, political dramas and Spinoff yarns in Auckland at Q Theatre on December 11. Anna will be joined onstage by special guests, rose-tinted glasses and Christmas cheer.
How fair is our tax system?
On the latest episode of When the Facts Change, Victoria University professor of taxation Lisa Marriott talks to Bernard Hickey about the fundamental flaws at the core of our tax system, how they have produced historic levels of wealth inequality in Aotearoa - and how we can fix them. Lisa is speaking at the Pakukore: Poverty, by Design conference at Victoria University, 21-23 November.
Click and Collect
After the three opposition parties presented a unified front at this week’s hīkoi mō te Tiriti, Toby Manhire observes that the 2026 election is increasingly shaping up to be something we haven’t seen before
Future of Cook Strait ferries to be revealed on December 11
Education minister Erica Stanford has apologised in parliament after allegedly calling Jan Tinetti a “stupid bitch”.
Youth on boot camp pilot re-offended five weeks after release
Matt Gaetz withdraws as Donald Trump’s attorney general pick
Confirmation that I am less enigmatic than I think I am: several people sent me this story about a church installing an AI Jesus in a confessional
All 33 malls in Auckland ranked from worst to best. Joel MacManus reports on the findings of two significant new surveys about drugs in Aotearoa. Stewart Sowman-Lund talks to acclaimed British journalist Jon Ronson ahead of his appearance in Aotearoa. Alex Casey reveals what UK critics thought of After the Party following its UK debut. Stewart Sowman-Lund reviews Wicked. Ayesha Scott explains the calls for New Zealand’s Family Violence Act to name economic harm as a standalone type of violence. Hera Lindsay Bird advises someone wondering if they should cut contact with their ex-stepdad.
That’s it for today. Thanks for reading.
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Excellent! I can't believe Matthew Hooton wrote all the things about Luxon that I've been thinking for a long, long year. I only rarely agree with Hooton but he's nailed it this time. Some exceptionally quotable lines. Love it.
Very pleased with your articles - telling the true facts is what counts!!