‘Just cool the jets,’ says Reserve Bank governor
Adrian Orr wished the media at the press conference yesterday “a wonderful and sensibly-spending Christmas”. That message wasn’t just for those in the room
Mōrena and welcome to The Bulletin for Thursday, November 24, by Anna Rawhiti-Connell. Presented in partnership with Z Energy.
In today’s edition: need for urgency questioned by opposition parties; climate change minister to review Zero Carbon Act; Christchurch rebuild agency repurposed to take on national infrastructure projects; but first, the bumpy landing ahead
The Reserve Bank is forecastingNew Zealand will enter recession from mid-2023
Recession from mid-2023
Obviously yesterday’s Bulletin should not have said “last OCR-related Bulletin of the year” but instead “last preview”. Yesterday’s news of the 4.25% OCR from the Reserve Bank and accompanying hard truths is running on most front pages this morning, with the Herald’s really bringing reality home. The Reserve Bank now sees the OCR rising to a peak of 5.5% in 2023. It was 4.1% in August’s monetary policy statement (MPS). Most were expecting the rate but it was the statement that delivered the message that things are worse than we thought. It forecasts that New Zealand will enter recession from mid-2023.
Bumpy, rather than hard landing
Slight silver lining in both the Reserve Bank and ANZ economist Sharon Zollner’s comments. Zollner said “The hope that we could land the Boeing 747 on a postage stamp has gone out the window” but the landing was likely to be “bumpy” rather than a very hard one. Adrian Orr described the forecast recession as a relatively “shallow” economic contraction. That said, as the Herald’s Jenée Tibshraeny reports (paywalled), Jim Reardon, Westpac's former treasurer, said he could see two-year fixed mortgage rates hitting 8%. They're currently sitting between 6 and 7%.
‘Cool the jets’ not just a message for consumers
Adrian Orr had a message for consumers during the press conference. “Think harder about your spending. Think about saving rather than consuming, I know that’s a strange concept,” he said. “Just cool the jets.” This will obviously hit differently depending on your situation. If you’re already struggling, it will go down like a cup of cold gruel. The bank’s monetary policy committee also noted inflation pressure from fiscal policies was skewed to the upside. In plain language, Infometrics principal economist, Brad Olsen said “They're quite clearly saying there that the government is contributing to inflation, or certainly not helping the case to get it under control.”
Forecasts potentially claim early policy scalp
The political ramifications started to emerge yesterday. National party leader Christopher Luxon said that everything in the party’s tax policy except indexed tax brackets is now under review. That includes cutting the top tax rate. "We would like to offer people tax relief, but when I look ahead, if I think about the 39% tax rate in particular, that's something I really want to think about because ... in this environment, the situation has changed big time. Big time," he said. Commentary has already begun on what yesterday’s news means for the government's re-election chances. The Herald’s Thomas Coughlan writes (paywalled) “If Labour loses next year’s election, commentators could point towards Wednesday’s MPS as the moment it became clear things were beginning to unravel.”
Bringing gender balance to our export market
Despite 30% of New Zealand companies being led by women, only 15% of our goods exporters are. From Madonna wearing a pair of Karen Walker pants in 1998, selling out the designer’s stock in US department stores, to education tech businesses that found more recent worldwide success through Covid – New Zealand’s women-owned businesses are regularly world-leading. But not enough of them take the step to become exporters. NZTE wants to encourage more of our wāhine-owned businesses to go international. Read about some of those that have found success overseas on The Spinoff now (sponsored).
"It's never good to blame the Queen, but especially for something that she didn't do"
The week lost in parliament due to the Queen’s death is being given as the reason why parliament is sitting under urgency all week but that hasn’t washed with Act’s David Seymour, whose response headlines this item or Te Pāti Māori’s Debbie Ngarewa-Packer, who said "The reality is, is that they [the government] have been really, really slack in how they've brought legislation to the House, that's what their primary role is." There are 24 bills being put through the House this week. Four will move forward without going through the select committee process, meaning the public don’t get to have their say on the proposed legislation. Stuff’s Luke Malpass has a good run down on the situation.
Lawyers fail in case against Climate Change Commission
Eight months after the hearing finished, the High Court has made a judgement in a case taken by Lawyers for Climate Action against the Climate Change Commission. As Stuff’s Olivia Wanna reports, the lawyers failed to convince a judge that the commission’s carbon-cutting maths was wrong. High Court justice Jillian Mallon dismissed all the grounds of judicial review but did find that the Zero Carbon Act regarded meeting a global 1.5C temperature rise limit as an “aspiration rather than an obligation”. Climate change minister James Shaw said the undecided case influenced his decision not to ask cabinet for a tougher carbon-cutting goal to take to Cop27. Shaw will now review the Zero Carbon Act.
Ministry of Works 2.0?
Good spot from Newsroom’s Jono Milne here. Cabinet has agreed to repurpose Ōtākaro, its Christchurch rebuild agency, into a new company to deliver infrastructure projects across government. As Milne notes, the news was delivered with little fanfare –no speech or press release, but instead disclosed by Grant Robertson at an infrastructure summit on Tuesday. Ōtākaro is already finalising the set of projects it will start working on alongside a number of government agencies. "New Zealand cannot afford to slow down when it comes to the work we're doing on infrastructure. We can't kick the can down the road for future generations to fix the deficit. We must keep going now," said Robertson.
Click and collect
Finland’s prime minister, Sanna Marin to meet Jacinda Ardern in Auckland next week
Road safety strategy fails on all but one target
Rotorua council will consider an agreement that could see an end to the widespread use of emergency housing in motels in the city
First refugees from Nauru to be resettled in New Zealand arrive, nine years after we offered to resettle them
It’s not Friday yet but it’s raining and the news is grim so here’s a cat in a bag story anyway
Got some feedback about The Bulletin, or anything in the news? Get in touch with me at thebulletin@thespinoff.co.nz.
If you liked what you read today, share The Bulletin with friends, family and colleagues.
In part two of a 2017 Candidate Diaries reunion trilogy, Toby Manhire hears about National's sometimes "horrific" last five years in opposition from Erica Stanford. Charlotte Muru-Lanning explains what’s going on with the university strikes at the moment. Tina Makereti reviews The Ani Waaka Room by Te Aro Pā poet Debbie Broughton, and admires the way Writing from the Taranaki Māori diaspora is flourishing. Alex Casey reveals the 10 best international reality TV shows of the year. And Chris Schulz doesn’t like the odds of The Game’s scheduled New Zealand performances going ahead.
Number one won’t shock you but number six might
‘Tis the season for lists and rankings so for today, Dylan Cleaver has ranked all of the 2022 All Blacks and Black Ferns tests. According to Cleaver he’s used a formula too complicated to write down but imagine “a combination of Gödel’s Second Incompleteness Theorem, Archimedes’ Buoyancy Principle and Keith Quinn’s Twitter feed”.
New Zealand Rugby has also confirmed they’re on the hunt for the new “Professor” and applications are open for the Black Ferns coaching role.
“Spicy Hot Pot Real Rap”
“This rotten cabbage, let’s pull it out, eat it, achieve some foodie freedom,” Guo Yifen, the woman with the cabbage, raps in a low and creaky voice in the song “Spicy Hot Pot Real Rap”.
A really fantastic read from the New York Times for you about older online content creators in China who are challenging traditional views about ageing and what it means to have a long and happy life. They are among a new generation of Chinese retirees who have fewer grandchildren than those before and the financial freedom to pursue hobbies and share their experiences online. Ms. Guo and her musical partners, known as Sister Wang Is Coming, are all aged between 62 and 66 and have half a million followers on Douyin, the Chinese version of TikTok.
