Rate leaps and Christmas creep
An OCR rise today is virtually guaranteed as commentators leapfrog to anticipating another one in time for a Christmas retail season that’s come even earlier
Mōrena and welcome to The Bulletin for Wednesday, October 5, by Anna Rawhiti-Connell. Presented in partnership with Z Energy.
In today’s edition: transport agencies write to immigration minister on bus driver shortage; Tiwai Point owners and Ngāi Tahu to work together on clean up; the morality of meat-eating but first, OCR hikes for a Christmas coming early.
Sorry to report but Christmas is coming early this year as belts tighten (Getty Images)
Crown accounts released today
It’s a big day for economic news as the Reserve Bank (RBNZ) gets set to announce the official cash rate (OCR) and Treasury opens the government’s books, releasing the Crown accounts for the year ending June 2022. There’s a two hour lock-up for economists and journalists this morning, followed by the release at 1pm. The Herald is running with a “blood bath” headline online although it’s “Accounts to capture Covid pain” in print. The accounts will indeed capture the full fiscal impact of the delta and omicron outbreaks and the prime minister has already signalled that they won’t be pretty. Finance minister Grant Robertson has also indicated an era of more restrained and targeted government spending is upon us.
Light at end of tunnel
The Crown accounts may be “a blood bath” but there was some better domestic economic news yesterday. The New Zealand Institute of Economic Research runs a quarterly survey and released this quarter’s findings yesterday. Businesses are feeling less gloomy and reporting “light at the end of the tunnel”. Survey results also suggest that inflationary and workforce shortage pressures may be easing. That’s backed up by a report from TradeMe Jobs yesterday which found demand for roles from job applicants was up for the first time in two years.
3.5% OCR picked for today
At 2pm today, the RBNZ will announce the OCR. It’s largely accepted that the bank will lift the rate by 50 basis points to 3.5%. The Reserve Bank of Australia (RBA) surprised people yesterday by only announcing a 25 basis point rate increase. BNZ’s Stephen Topliss says it will be an even bigger surprise if the RBNZ follows Australia but that “the last thing that central banks will want to be doing is tightening really aggressively to thwart past inflation pressure” when there’s the prospect of a rescission looming. For a really grunty read on the risk of recession, I recommend Chartbook’s Adam Tooze this morning. It’s all crystal ball gazing, swings and roundabouts and roller coaster rides at the moment, I guess. David Hargreaves at interest.co.nz has leapt ahead to the next OCR announcement on November 23, writing that “a 4% OCR for Christmas is virtually signed and sealed.” That’s in line with what most economists currently think.
Christmas is coming early
Which brings me, you and all of us to Christmas and its creep. Christmas creep is the very real phenomena of Christmas merchandising making an appearance earlier and earlier in the year. The creep will be creepier this year as retailers try to offset the impacts of the current economic climate by elongating the season. In the UK, people are planning on spending £4.4b less on non-essentials this Christmas. Australians are already being warned to rein in Christmas spending after yesterday’s RBA announcement. In the US, retail giants like Target, Amazon and Walmart are all bringing seasonal sales promotions forward. Last week Reddit users in New Zealand went off about the appearance of Santa and reindeer-themed chocolates on sale at a Countdown supermarket. Ho, ho, ho.
The magic of Wellington
What makes Wellington special is – for Rachel Taulelei, founder of Māori brand strategy agency Oho – its unique community centric vibe. Walking into a bar and seeing politicians and students shooting the breeze over a Wellington beer shows how egalitarian the city can be. “So much of what allowed me to build [Oho] has come from the networks that you can only build in a place like this,” she says. Learn more about Taulelei's Wellington story here, and find the sculpture inspired by her Oho journey using this handy map. (Sponsored)
Concerns about train line closure continue
This morning the Herald’s Georgina Campbell has a report (paywalled) on three regional transport agencies writing to immigation minister Michael Wood. Auckland Transport, Environment Canterbury and Greater Wellington Regional Council are asking for immigration settings to be urgently reviewed to address the country's bus driver shortage. It follows the news on Tuesday about the closure of Auckland train lines next year for a major rebuild project. Services will be replaced by buses but as the agencies writing to the minister and Auckland Councillor Richard Hills note, we have a shortage of bus drivers. There is also concern that the likelihood of buses getting stuck in traffic will put people off public transport and 50,000 cars may be back on Auckland’s already congested roads.
Mātauranga-focused smelter cleanup
A report last month estimated that the clean up costs at the Tiwai Point aluminium smelter could top $1b. Ngāi Tahu, Murihiku Runaka and the smelter’s owners, New Zealand Aluminium Smelters Limited (NZAS), have signed a deal to work together to restore the land and waterways around the smelter, after decades of contamination. NZAS is a joint venture owned by Rio Tinto and a Japanese chemical company. Rio Tinto had indicated Tiwai Point would close in 2024, but as global aluminium prices have soared, that outlook has changed. Under the agreement, the parties will toegther work on plans to remove waste, conduct environmental monitoring and remediate the site.
Our members make the difference
Their support ensures we can continue to employ and commission diverse voices covering stories from a range of perspectives and make them freely available to all. From Spinoff stalwarts Toby Manhire and Alex Casey to young writers like Charlotte Muru-Lanning and Shanti Mathias, our journalists and contributors do valuable work that is only possible with the support of readers like you. If you can, support the team and donate today.
The morality of meat-eating
Ever since she adopted a dog, Alice Snedden has been plagued by one question: how can she love and care for one animal while eating countless others? In the latest episode of Alice Snedden’s Bad News, she chews through the morality of meat-eating. Which animal is the most ethical to eat? Why can nobody make a good fake bacon? And where do fish sit in all of this? Joined by vegan comedian Tom Sainsbury, Lord of the Fries owner Bruce Craig and animal welfare scientist Craig Johnson, the truth might be hard to swallow.
Click and collect
Kris Faafoi has a new gig.
University staff to strike on Thursday.
Prime minister condemns North Korea’s firing of ballistic missile over Japan.
A look at how the Media Council might approach complaints about Stuff’s Fire and Fury documentary.
The hubris of tech billionaires knows no bounds as Elon Musk tweets “solution” to the Ukraine war. Ukraine’s president and ambassador to Germany reply.
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.
Graeme Edgeler says that while there's no law against posting a picture of your voting paper on Instagram like Lorde did... please don’t. Shanti Mathias talks to candidates for Environment Canterbury bout the urgent issue of flood management – and how no solution, including managed retreat, is off the table. Toby Manhire has a staggeringly simple guide to voting for Auckland Council. Charlotte Muru-Lanning talks to the people behind a new podcast that wants to change the way we view the prison system. Tara Ward looks at what new streaming platform AMC+ has to offer.
Black Ferns assistant coach recalls the days of being “the weirdos”
Three days until the Rugby World Cup (RWC) and Black Ferns assistant coach Wes Clarke is in a reflective mood. Clarke recalls being there when the Black Ferns “were very much on the fringes of society and they were 'weirdos' for playing the game”. Clarke also notes how special it’s been to see support for women’s sport. He’s talking about the team driving past a billboard for the RWC which is a little thing when you compare it to the advertising presence of the All Blacks over the years, but it obviously had a big impact on the team.
