Last stop of the year for the OCR
As we await confirmation of what could be to be the biggest lift in the OCR since 1999 today, financial stress takes the top spot in a new survey of New Zealander’s mental health
Mōrena and welcome to The Bulletin for Wednesday, November 23, by Anna Rawhiti-Connell. Presented in partnership with Z Energy.
In today’s edition: GPs need 231% funding increase to be viable; mayor wants councillors to take exams; Wellington man commissions own survey into banning fireworks sales, finds majority support; but first, the last OCR announcement of the year as New Zealanders register financial stress as the number one factor impacting their mental wellbeing
Reserve Bank governor Adrian Orr (Photo: Getty Images)
Forecast arguably more important than rate announced today
Today’s Official Cash Rate (OCR) announcement is the last for this year. We don’t get another one until February. interest.co.nz’s David Hargreaves has a good piece on why the accompanying monetary policy statement (MPS), which forecasts where the peak OCR will be, is arguably more important for the Reserve Bank (and interest rates) than the rate announced today. Many economists are picking the Reserve Bank to lift the rate by .75 basis points (bps) to 4.25% but some still think .50bps would be enough. A lift to 4.25% would be the largest since 1999. As it’s the last OCR-related Bulletin of the year, we’ll go to the charts. The worst earworm, and possibly the worst song of the 20th century, Blue (Da Ba Dee) was number one at the time. Don’t click that link.
Not all economists agree the Reserve Bank needs to go to 4.25%
There is always some degree of argument about where the OCR will, and should land, but there seems to be a bit more concern about the inevitably of today’s announcement. Kiwibank’s chief economist Jarrod Kerr is worried we may get a rate that’s too high as the reality of higher interest rates and recessionary conditions overseas bed in. 60% of Kiwibank’s mortgages are set to roll over to new rates over the next six months. When asked if lifting to 4.25% was necessary, economist Shamubeel Eaqub said (paywalled) “Absolutely not.”
Black Friday and Cyber Monday a potential barometer
With the imported retail extravaganzas Black Friday and Cyber Monday looming, spending figures over this period will be watched with interest. Shoppers spent $248.2m in the four days from Black Friday to Cyber Monday last year, a 7% increase on the previous year’s sales. ASB economist Mark Smith was pessimistic about this year’s sales outlook. He said he did not expect to see similar levels of spending growth because sales last year had been boosted by post-lockdown shopping spikes. Retail NZ chief executive Greg Harford took a more optimistic, but tempered view saying “consumer confidence is not great at the moment” (paywalled) which “means that customers are increasingly focused on securing fantastic deals. In this context, Black Friday’s likely to go well, but things might be slower into December.”
Financial stress most impactful factor on mental wellbeing
A new Ipsos survey of New Zealander’s mental health out this morning moves financial stress into the top spot for factors impacting people’s mental wellbeing. The survey compares three years of data and this is the first year financial stress has been ranked ahead of stress caused by relationships. Of those surveyed, 45% said concern about finances was the most impactful factor. For Māori it was 57%. Today’s announcement will add to that concern but as ANZ chief economist Sharon Zollner says (paywalled) “the central bank’s inflation-targeting credibility is on the line” so the risk of a hard landing and the resultant impact can't compete with the possibility of regret of “hiking too slowly and wishing you’d gotten on with it.”
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GPs need funding increase of up to 231% to be viable
BusinessDesk are running a new series (free to read) on the business of health. This morning, Cécile Meier reports on a government commissioned review of primary healthcare that found very high-need general practices would need a funding increase of up to 231% to function properly. The review was completed in July but kept under wraps until it was proactively released on November 16. Te Whatu Ora board chair Rob Campbell has said that the review’s findings were not a priority. Te Whatu Ora had not commissioned the review, he said, and “producing a conclusion” on primary care funding was still months away.
Mayor wants councillors to take regular exams
Mayors are able to take part in mayor school when they’re first elected, but Porirua mayor Anita Baker wants to take things a step further. Baker is calling for councillors to take regular exams to test their competence. A range of current and former politicians were spoken to by Stuff and doubted it would work, arguing voters had to make more effort to check out candidates and vote for the ones that had the competency to do the job. Eric Crampton made a great case (paywalled) for at least being able to see councillors’ voting records more easily (it’s almost impossible). I’m not sure “voters need to make more effort” is the strongest defence against the exams.
Wellington man so irritated by private sales of fireworks, he commissions a survey
Jonathan Hill has two kids and two dogs. He was so fed up with the constant banging for the week around Guy Fawkes, he commissioned Talbot Mills (they do Labour’s polling) to do a survey on whether people think private sales of fireworks should be banned. Two thirds of New Zealanders support a ban and less than a quarter support ongoing sale. The story is here but I just want to add a bit of a warning as it contains images of very badly injured horses. Hill has shared the results with the prime minister and several cabinet members. Hats off to Jonathan Hill.
Click and collect
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Debbie Ngarewa-Packer explains why Te Pāti Māori will oppose the RMA reforms
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Hey, Anna. If you didn't want to click the link for Blue, don't click this link https://www.youtube.com/watch?v=90RLzVUuXe4 . Weird that it has been remixed this year!