Ew. Hell no. West African.
Politics 🗳️ NZ Politics
- Thread starter wizard of Tauranga
- Start date
NZWarriors.com
Compelling argument.
What policy is the current coalition enacting that could be seen to take credit for the predicted gradual levelling off of inflation?
Nothing can deny it dropped from 6.9% in April 2022 to 4.7% in November 2023, so definitely trending down. True though, world circumstances or a catastrophe means it’s not a certainty.If we look at financial predictions they are wrong 95% of the time.
Head of Barefoot and Thompson predicted that if covid arrived in NZ the arse would fall out of the market
How did that work out??
NZWarriors.com
Everything. Front of house and back of house. It all falls under leadership. Look at Biden.
Middle NZ are fucking stupid and their approval shouldn’t be a guide on anything.
Also your comment is contradictory. They approve of seeing the things that can’t be seen behind the scenes?!
When covid hit nz real estate boomed
I could agree if we were alone, but with large portions of the world grabbing with the same issue of inflation I don’t believe that many could all be driven by domestic factors rather than worldwide collective ones
NZWarriors.com
I didn't say it was all driven by domestic factors. There is no doubt domestic factors play a significant part.
Its trajectory and projections show not the extent as is being put on lowing it though.
Liam Dann wrote an article in NZHerald recently which argued that as at today the rate of inflation was now within the required 1-3% range but as the measurement of inflation was done historically that won’t show for around 12 months
NZWarriors.com
So the proposed measures are unnecessary?
Inflation falls to 4.7 per cent in December quarter
Strong domestically-driven inflation expected to continue worrying the RBNZ.
The article I referred to
We’re going to overdo the inflation fight, keep interest rates too high for too long and cause more economic pain than is necessary.
Which is a bummer.
It’s not the Reserve Bank’s fault. It’s par for the course with modern monetary policy. The Bank has to get the annual inflation rate back into a 1-3 per cent band.
Unfortunately, the data it has to use to prove it has done that is woefully outdated.
In the economy that we are experiencing right now, we have theoretically already achieved that target.
Of course, the annual inflation rate is 4.7 per cent. But that is based on what we experienced in 2023 and pumped up by high inflation early last year.
The latest data we have came out last month, the inflation rate for the last quarter of 2023 was just 0.5 per cent.
If we annualise that rate forward, we are already at 2 per cent.
Unfortunately, economists aren’t allowed to look at the most recent data and extrapolate — even if that would more accurately reflect our lived experience.
I understand why it works that way. It would be dangerous to set policy based on assumptions. You need to deal with hard facts.
But if, say, you are struggling to keep your business afloat or pay your mortgage or face redundancy, it must be galling that the conventions of the monetary policy mean the RBNZ can offer you no respite.
It’s famously considered to be a poor workman who blames their tools, so the strongest defence you’ll hear from a central banker is that monetary policy is a blunt tool.
Central banks are forced to focus on the balance of risks with regard to policy swinging too far one way or the other.
When Covid first hit and the economy was locked down, the risk of loosening policy too much and causing inflation was deemed lesser than the risk of keeping things tight and allowing the economy to crash.
As inflation took hold the RBNZ had to pivot. The balance of risk shifted towards inflation becoming embedded as a long-term problem.
There’s been no shortage of debate about the choices it made. That’s a healthy part of the process.
I think that risk is shifting again. Others will remain more hawkish.
The orthodox view on inflation is that it is like a forest fire that will destroy an economy if left unchecked, so it is prudent to keep hosing it down until the last embers are extinguished.
You don’t want to undermine the sacrifices already been made to beat it by giving up too soon and letting it flare up.
Fair enough.
But my concern is a structural flaw that makes it near impossible for a central bank to pivot until the economic damage is done.
According to RBNZ’s own research, it can take 27 months for the full effect of higher rates to flow through to street level.
The RBNZ started lifting rates in October 2021. So the real pain of higher rates has only just begun. The impact of the last hike in May might not flow through to the economy until August 2025.
To recap, we are using an inflation figure that includes data already more than 12 months out of date to guide policy that won’t be fully felt through the economy for at least another year.
That’s blunt in the way doing brain surgery with a cricket bat is blunt.
We’re going to overdo the inflation fight, keep interest rates too high for too long and cause more economic pain than is necessary.
Which is a bummer.
It’s not the Reserve Bank’s fault. It’s par for the course with modern monetary policy. The Bank has to get the annual inflation rate back into a 1-3 per cent band.
Unfortunately, the data it has to use to prove it has done that is woefully outdated.
In the economy that we are experiencing right now, we have theoretically already achieved that target.
Of course, the annual inflation rate is 4.7 per cent. But that is based on what we experienced in 2023 and pumped up by high inflation early last year.
The latest data we have came out last month, the inflation rate for the last quarter of 2023 was just 0.5 per cent.
If we annualise that rate forward, we are already at 2 per cent.
Unfortunately, economists aren’t allowed to look at the most recent data and extrapolate — even if that would more accurately reflect our lived experience.
I understand why it works that way. It would be dangerous to set policy based on assumptions. You need to deal with hard facts.
But if, say, you are struggling to keep your business afloat or pay your mortgage or face redundancy, it must be galling that the conventions of the monetary policy mean the RBNZ can offer you no respite.
It’s famously considered to be a poor workman who blames their tools, so the strongest defence you’ll hear from a central banker is that monetary policy is a blunt tool.
Central banks are forced to focus on the balance of risks with regard to policy swinging too far one way or the other.
When Covid first hit and the economy was locked down, the risk of loosening policy too much and causing inflation was deemed lesser than the risk of keeping things tight and allowing the economy to crash.
As inflation took hold the RBNZ had to pivot. The balance of risk shifted towards inflation becoming embedded as a long-term problem.
There’s been no shortage of debate about the choices it made. That’s a healthy part of the process.
I think that risk is shifting again. Others will remain more hawkish.
The orthodox view on inflation is that it is like a forest fire that will destroy an economy if left unchecked, so it is prudent to keep hosing it down until the last embers are extinguished.
You don’t want to undermine the sacrifices already been made to beat it by giving up too soon and letting it flare up.
Fair enough.
But my concern is a structural flaw that makes it near impossible for a central bank to pivot until the economic damage is done.
According to RBNZ’s own research, it can take 27 months for the full effect of higher rates to flow through to street level.
The RBNZ started lifting rates in October 2021. So the real pain of higher rates has only just begun. The impact of the last hike in May might not flow through to the economy until August 2025.
To recap, we are using an inflation figure that includes data already more than 12 months out of date to guide policy that won’t be fully felt through the economy for at least another year.
That’s blunt in the way doing brain surgery with a cricket bat is blunt.
NZWarriors.com
That's why inflation needs to be kept in a tight band because big fluctuations are painful to correct and take time.
And if you use the brain surgery analogy it doesn't help that you take the control away from the lead surgeon and give it to a support crew that aren't qualified in brain surgery as well as add a hip replacement to look after as well. Add to that the hospital director turning the lights up too bright.
That's changes made to the RBNZ remit, board appointments and government spending out of control with little accountability on outcomes
I don’t read it as a contrary view thoughStuff
www.stuff.co.nz
This article takes a different view.
NZWarriors.com
It’s taking a view that losing a proposed 74,000 jobs to correct inflation would be more detrimental to the country.
- Thread starter
- #5,877
I do like the thinking around alternative options - they all have positives and negatives though and are unproven - the Reserve bank is nothing if not conservative.
Remember also interest rates are there to speed up the economy in tough times as well as slow if down when the economy is beyond capacity. Some of those eg the KiwiSaver I like but wouldn’t work at injecting cash into the economy.
One thing I think is wrong is about the reserve bank being so rear facing and they can’t make predictions. That’s an excuse. They have talked about taking the path of least regrets after going too low too fast and staying there too long. That indicates they do have choices - but keep making mistakes…
- Thread starter
- #5,878
More proof Labours ‘being kind’ actually hurt those it was wanting to help. Failed idiology - hand up not a handout. The worst part is Labour weren’t transparent and hid the data:
Modelling obtained by the Herald reveals that expected time on Jobseeker and other main benefits has risen sharply in the past four years, Alex Spence reports.
Government estimates of the time beneficiaries will spend on income support have risen sharply, with recipients of the main Jobseeker payment now expected to spend an average of 13 years on a benefit, according to modelling obtained by the Herald.
The estimated time that work-ready Jobseeker recipients will spend on income support until they reach retirement age has jumped by 23 per cent since 2019, amid a “worrying” slowdown of the benefits system that could strain government finances and trap thousands of people in poverty.
Long-term estimates for people on youth benefits and sole-parent support have increased even more starkly. Hundreds of disadvantaged teens are now expected to spend virtually their entire working lives on a main benefit, at a cost of nearly $1 million each in future payments, according to modelling by actuaries Taylor Fry for the Ministry of Social Development.
In total, Taylor Fry estimated that 626,000 New Zealanders who received a benefit in the last year will collectively spend another 6.43 million years on income support.
The Herald obtained the actuaries’ reports for the past five years, which have not been published until now, under the Official Information Act. They reveal that estimates of time on benefits were increasing before the Covid-19 pandemic – mainly because the rate at which people exit the system has slowed significantly – and are expected to worsen as unemployment rises.
Social Development and Employment Minister Louise Upston said: “The trends in these reports are worrying. They confirm the fears I raised in opposition that the previous Government took the foot off the accelerator when it came to shifting people off welfare and into work.”
The reports also said:
Taylor Fry was first hired by MSD in 2011 when Sir John Key’s National Government was in power. For several years, Taylor Fry reports were published annually on MSD’s website and occasionally cited by ministers as evidence in support of welfare reforms.
After Labour took over in late 2017, the modelling continued to be produced annually but the reports were no longer published on MSD’s website and largely disappeared from public discussion. Carmel Sepuloni, the Labour minister responsible for MSD between October 2017 and November 2023, said she did not recall being briefed on the research by officials while she was in government.
www.nzherald.co.nz
Modelling obtained by the Herald reveals that expected time on Jobseeker and other main benefits has risen sharply in the past four years, Alex Spence reports.
Government estimates of the time beneficiaries will spend on income support have risen sharply, with recipients of the main Jobseeker payment now expected to spend an average of 13 years on a benefit, according to modelling obtained by the Herald.
The estimated time that work-ready Jobseeker recipients will spend on income support until they reach retirement age has jumped by 23 per cent since 2019, amid a “worrying” slowdown of the benefits system that could strain government finances and trap thousands of people in poverty.
Long-term estimates for people on youth benefits and sole-parent support have increased even more starkly. Hundreds of disadvantaged teens are now expected to spend virtually their entire working lives on a main benefit, at a cost of nearly $1 million each in future payments, according to modelling by actuaries Taylor Fry for the Ministry of Social Development.
In total, Taylor Fry estimated that 626,000 New Zealanders who received a benefit in the last year will collectively spend another 6.43 million years on income support.
The Herald obtained the actuaries’ reports for the past five years, which have not been published until now, under the Official Information Act. They reveal that estimates of time on benefits were increasing before the Covid-19 pandemic – mainly because the rate at which people exit the system has slowed significantly – and are expected to worsen as unemployment rises.
Social Development and Employment Minister Louise Upston said: “The trends in these reports are worrying. They confirm the fears I raised in opposition that the previous Government took the foot off the accelerator when it came to shifting people off welfare and into work.”
The reports also said:
- The estimates are skewed by a growing minority of beneficiaries, who appear to be staying on welfare for extremely long durations. For example, Sole Parent Support clients are projected to spend an average of 17 working-age years on a benefit (up from 12.5 years in 2019), but the upper quartile of this group – about 18,700 people – are expected to spend more than 25 years in the system.
- The changes are impacting young people most severely, with about 2000 teens on the Youth Payment or Young Parent Payment now expected to spend an average of 24 working-age years on a benefit – a 46 per cent increase from the 2019 estimate. About 500 of them are expected to be on income support for more than 38.5 years, almost the rest of their working lives.
- In 2022, Taylor Fry estimated the longest-staying youth benefit recipients would each receive at least $962,000 in future payments – implying a total cost of more than $480 million for that cohort. (There was no comparable figure provided in the 2023 report.)
- Māori are also disproportionately impacted. In June 2022, Taylor Fry predicted Māori would make up nearly half of work-ready Jobseeker clients by the end of this decade, up from 35 per cent in 2010.
- Public housing is becoming “increasingly rigid”, with people moving out at historically low rates at the same time demand for places is soaring. Entry rates to the public housing register roughly doubled in the past decade, while exit rates nearly halved because of a lack of affordable private rentals for tenants to move to. “This has caused a system bottleneck,” Taylor Fry said.
Taylor Fry was first hired by MSD in 2011 when Sir John Key’s National Government was in power. For several years, Taylor Fry reports were published annually on MSD’s website and occasionally cited by ministers as evidence in support of welfare reforms.
After Labour took over in late 2017, the modelling continued to be produced annually but the reports were no longer published on MSD’s website and largely disappeared from public discussion. Carmel Sepuloni, the Labour minister responsible for MSD between October 2017 and November 2023, said she did not recall being briefed on the research by officials while she was in government.
Beneficiaries now likely to spend 13 years on welfare
Govt estimates of the expected time on Jobseeker have jumped 23 per cent in four years.
NZWarriors.com
Do you know when The government is changing the benefit system, the one about being more rigorous with under 25.More proof Labours ‘being kind’ actually hurt those it was wanting to help. Failed idiology - hand up not a handout. The worst part is Labour weren’t transparent and hid the data:
Modelling obtained by the Herald reveals that expected time on Jobseeker and other main benefits has risen sharply in the past four years, Alex Spence reports.
Government estimates of the time beneficiaries will spend on income support have risen sharply, with recipients of the main Jobseeker payment now expected to spend an average of 13 years on a benefit, according to modelling obtained by the Herald.
The estimated time that work-ready Jobseeker recipients will spend on income support until they reach retirement age has jumped by 23 per cent since 2019, amid a “worrying” slowdown of the benefits system that could strain government finances and trap thousands of people in poverty.
Long-term estimates for people on youth benefits and sole-parent support have increased even more starkly. Hundreds of disadvantaged teens are now expected to spend virtually their entire working lives on a main benefit, at a cost of nearly $1 million each in future payments, according to modelling by actuaries Taylor Fry for the Ministry of Social Development.
In total, Taylor Fry estimated that 626,000 New Zealanders who received a benefit in the last year will collectively spend another 6.43 million years on income support.
The Herald obtained the actuaries’ reports for the past five years, which have not been published until now, under the Official Information Act. They reveal that estimates of time on benefits were increasing before the Covid-19 pandemic – mainly because the rate at which people exit the system has slowed significantly – and are expected to worsen as unemployment rises.
Social Development and Employment Minister Louise Upston said: “The trends in these reports are worrying. They confirm the fears I raised in opposition that the previous Government took the foot off the accelerator when it came to shifting people off welfare and into work.”
The reports also said:
- The estimates are skewed by a growing minority of beneficiaries, who appear to be staying on welfare for extremely long durations. For example, Sole Parent Support clients are projected to spend an average of 17 working-age years on a benefit (up from 12.5 years in 2019), but the upper quartile of this group – about 18,700 people – are expected to spend more than 25 years in the system.
- The changes are impacting young people most severely, with about 2000 teens on the Youth Payment or Young Parent Payment now expected to spend an average of 24 working-age years on a benefit – a 46 per cent increase from the 2019 estimate. About 500 of them are expected to be on income support for more than 38.5 years, almost the rest of their working lives.
- In 2022, Taylor Fry estimated the longest-staying youth benefit recipients would each receive at least $962,000 in future payments – implying a total cost of more than $480 million for that cohort. (There was no comparable figure provided in the 2023 report.)
- Māori are also disproportionately impacted. In June 2022, Taylor Fry predicted Māori would make up nearly half of work-ready Jobseeker clients by the end of this decade, up from 35 per cent in 2010.
- Public housing is becoming “increasingly rigid”, with people moving out at historically low rates at the same time demand for places is soaring. Entry rates to the public housing register roughly doubled in the past decade, while exit rates nearly halved because of a lack of affordable private rentals for tenants to move to. “This has caused a system bottleneck,” Taylor Fry said.
Taylor Fry was first hired by MSD in 2011 when Sir John Key’s National Government was in power. For several years, Taylor Fry reports were published annually on MSD’s website and occasionally cited by ministers as evidence in support of welfare reforms.
After Labour took over in late 2017, the modelling continued to be produced annually but the reports were no longer published on MSD’s website and largely disappeared from public discussion. Carmel Sepuloni, the Labour minister responsible for MSD between October 2017 and November 2023, said she did not recall being briefed on the research by officials while she was in government.
Beneficiaries now likely to spend 13 years on welfare
Govt estimates of the expected time on Jobseeker have jumped 23 per cent in four years.
