There is no recession in New Zealand (probably)
GDP figures get released today and as usual, economists have lined up to place their bets. Two quarters of negative growth equals a recession and most think we’ll avoid one
Mōrena and welcome to The Bulletin for Thursday, September 15, by Anna Rawhiti-Connell. Presented in partnership with Z Energy.
In today’s edition: two-thirds of prisoners still not allowed face-to-face visits; another Te Pūkenga executive resigns; Rotorua mayor hints at end to emergency housing situation; but first, will we avoid recession? Probably - but we’ll find out today.
Grant Robertson with a Flying Nun record (not Blam Blam Blam) (Photo: Yadana Saw/RNZ)
Big range of picks for GDP figures out today
Sorry about the headline this morning. Whenever I hear the words depression or recession, I end up with a Blam Blam Blam earworm. Maybe finance minister Grant Robertson, a Flying Nun fan, will too after GDP figures are released this morning. Perhaps not, as “There is no depression in New Zealand” was an irony-laden lyric written in 1981 by Richard von Sturmer in response to the “really grey, repressive Muldoon years.” GDP fell 0.2% in the March 2022 quarter. Another fall and by convention, we’d be in a recession. Stuff’s Tom Pullar-Strecker has a good overview on where all the economists are sitting at the moment with predictions ranging from 0.4% to 1.8% growth.
Longer term, growth is forecast to slow
Most economists think we’ll see growth for the June quarter as a kind of bounceback from the omicron wave at the beginning of the year. But all of them talk about “noise” in the data. As Pullar-Strecker reports, most are forecasting that the economy will avoid a technical recession next year, but say a lot depends on whether foreign tourists and students return to New Zealand. Longer term, the consensus (literally, it’s called the Consensus Forecast) is that economic growth is going to slow. The forecast, issued by the NZ Institute of Economic Research, is for 1% GDP growth in 2024 and 1.5% 2025. GDP matters because it’s pegged to government spending. In new budget responsibility rules announced in May, the government has committed to maintaining a small budget surplus in the range of 0 to 2% of GDP over time once we get back to surplus.
This all sounds terrible... is it?
As BusinessDesk’s Pattrick Smellie writes (paywalled), those aren’t spectacular forecasts but at least we’re not in Europe. French president Emmanuel Macron gave a speech two weeks ago where he issued a fairly brutal statement saying that the age of abundance had ended in France. Writing for Newsroom, Jack Santa Barbara praised Macron for his bravery. The speech caused outrage from unions in France who found the implication that millions of low income workers had previously been living in opulence, offensive. It didn’t help Macron that his warning came at the same time as dividends paid out by major French companies reached a record €44b.
More bad news
Some economists argue we should pay less attention to GDP as it masks inequality - with GDP growth, no one can tell if it’s just the rich getting richer. Senators Chuck Schumer and Martin Heinrich are trying to introduce a bill in the US in 2018 to address that masking effect but it looks to have been stuck in the committee stage for four years now. Thankfully, Alice Snedden has a simple answer to sort out wealth inequality. No one who owns property will like it, although some might concede that a capital gains tax is an acceptable halfway point. Finance Minister Grant Robertson still doesn’t think a capital gains tax is politically palatable, defending the government’s “incremental” approach to redistributing wealth when he spoke with Snedden in the first episode of a new season of Bad News. Watch here or below.
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Ban on face-to face visits in prisons still in place
A report from Maiki Sherman at 1News last night revealed that the ban remains in place for almost two-thirds of those currently in a New Zealand prison. Restrictions were put in place during Covid outbreaks but haven’t yet been relaxed. Corrections has defended the restrictions, saying its allowed phone and video calling but defence lawyer Nigel Hampton KC says the issue raises concerns over a breach of human rights. Corrections says it's in the process of relaxing the restrictions but as Sherman points out, it's being hampered by workforce shortages. There are currently around 1,600 vacancies across the Department of Corrections - including 533 prison officers.
Te Pūkenga chief financial officer resigns just months into the job
Te Pūkenga, the “mega” polytech and the country’s largest tertiary education provider, has lost a chief executive and chief financial officer in the space of a few months. Matthew Walker joined Te Pūkenga as chief financial officer in July and has just resigned. It follows the resignation of chief executive Stephen Town, who stepped down in August after being on leave for weeks. Former deputy chief executive Merran Davis resigned in April 2021 and met with Chis Hipkins recently where she called for a commissioner to be appointed to manage Te Pūkenga and for there to be an official investigation into Town’s appointment.
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Rotorua mayor says council and government working together on emergency housing
In a written statement, Rotorua mayor Steve Chadwick says she met with ministers Megan Woods and Carmel Sepuloni and that the community can be “confident that we are working together to see an end to the current emergency housing in Rotorua.” “We want an end to mixed use of motels and better management of MSD clients in motels,” said Chadwick. As Stewart Sowman-Lund reported last Friday, the issue of emergency housing loomed large at a mayoral debate between four candidates vying for the job. Chadwick is stepping down from the mayoralty this year.
Click and collect
Labour MP Anna Lorck has had another allegation of bullying made about her and is now working with a leadership coach.
Aerial footage of the queues in London to see the Queen lying in state.
Disposable mask recycling programme launches.
Red KFC booth seats free to a good home (in Dunedin so suspect they’ve already been installed in a few flats).
You may have seen it, but if not - King Charles and the saga of the pens continues.
Got some feedback about The Bulletin, or anything in the news? Get in touch with me at thebulletin@thespinoff.co.nz.
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After more than 30 years at parliament, Nick Smith suddenly quit last year. Now, after a stint with the family company, he’s back and running for the Nelson mayoralty. Toby Manhire catches up with the political veteran for an interview. Charlotte Muru-Lanning says when it comes to te reo pronunciation, there's nothing wrong with being a tryhard. Mad Chapman ponders how much money it's worth giving up to not have women on your board (for NZ Rugby the amount appears to be at least $280,000). Shanti Mathias explores what happens when private profit meets public education with the rise of the edtech industry.
The Spinoff Group is looking for an office manager for 20 hours per week, ideally starting mid-October. The role is office based in Auckland. If you’re keen, more info here.
Does the haka give the All Blacks an advantage?
The Australians will do anything to gain a competitive advantage. A researcher from the University of Queensland strapped heart monitors onto players while they did the haka to try and find out whether it gave them any kind of physiological advantage over the other team.
It’s not technically sport but it is politics, in a pub
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“Industrialised nightmare production”
YouTube is the most popular video site in New Zealand. For the last decade it’s been plagued by all the same problems we associate with large, American social media and content platforms but has also had a reasonably unique issue relating to what kids are watching there. This is an excerpt from a new book which traces the platform’s rise to domination, looking specifically at the truly weird and sometimes disturbing content that was surfacing for kids, and how YouTube were forced to get on top of it.
Great read. Loved the Alice Snedden video piece on property ownership in NZ. Shame it was directly followed by a Kiwibank Home Loan ad with a smiling white couple in front of a sold home sign. You might want to review your sponsored advertising targeting to make sure it's appropriate for context.
This title made me laugh. Reminded me of 'There is No War in Ba Sing Se'