The Kākā by Bernard Hickey

TL;DR: The five things that mattered in Aotearoa’s political economy that we wrote and spoke about via The Kākā and elsewhere for paying subscribers in the last week included: * The new Government is reviewing migration settings that produced 2.8% population growth last year and is looking at a longer-term strategy of matching population growth to the ‘absorbtive capacity’ of Aotearoa-NZ’s infrast...

TL;DR: Flying in the face of comments from a ratings agency and a mountain of demand for a new long-term sovereign bond issued yesterday, Finance Minister Nicola Willis has again characterised the Government’s finances as too fragile to borrow in its own right to solve Aotearoa-NZ’s infrastructure deficits. She also again compared the Government’s budget to a household budget, saying spending cuts...

TL;DR: Ratings agency Standard & Poor’s has downgraded the outlooks for the debt issued by 15 councils, immediately increasing borrowing costs and forcing rates increases that will further inflate living costs and keep pressure on the Reserve Bank to keep mortgage rates high. S&P blamed the new Government’s decision to repeal Three Waters and the resulting uncertainty about how councils would pay...

TL;DR: Prime Minister Christopher Luxon has adopted the language of Ruth Richardson before her 1991 ‘Mother of All Budgets’ in arguing for benefit sanctions to bolster the Government finances, which he said were in such a mess that there was a risk of losing the confidence of creditors. Luxon said it was time New Zealanders had a ‘grown-up conversation’ about the ‘brutal facts of our reality’ and...

TL;DR : The Government is reviewing migration settings that produced 2.8% population growth last year and is looking at a longer-term strategy of matching population growth to the ‘absorbtive capacity’ of Aotearoa-NZ’s infrastructure. Our population grew last year at its fastest rate since 1947, when large numbers of troops returning from World War II boosted the figures ahead of near 2% per year...

TL;DR: The five things that mattered in Aotearoa’s political economy that we wrote and spoke about via The Kākā and elsewhere for paying subscribers in the last week included: * Net emigration of New Zealanders overseas hit a record-high 47,000 in the 2023 year, which only partly offset net immigration of 173,000, which was dominated by arrivals from India, the Philippines and China with temporary...

TL;DR: The Government has reverted indexation for main beneficiaries to price inflation from wage inflation under Parliamentary urgency to save money for tax cuts, which it has been advised could drive an extra 13,000 kids into poverty. The savings are also $1.36 billion less than National estimated before the election, expanding its fiscal hole created by the rejection of its to $2.96 billion for...

TL;DR: Stronger-than-expected US inflation data out overnight is expected to delay the first US Federal Reserve rate cut into the second half of 2024, which in turn would hold mortgage rates here higher for longer, possibly into next year. Elsewhere, IRD data shows nearly 50,000 beneficiaries of New Zealand Superannuation are being paid $1.1 billion per year in benefits while also earning more tha...

TL;DR: The National-ACT-NZ First coalition Government has unveiled the first versions of its replacement for Labour’s Three Waters laws, but without the capital grants or guarantees that would make it viable for councils to opt in or attractive enough for bond investors to back, especially for Auckland Council’s Watercare . In essence, the Government doesn’t want to take the blame for new water ch...

TL;DR: In this week’s wrap of climate news, Bernard Hickey and Cathrine Dyer talk about new research on the role of clouds in climate sensitivity suggesting very-fast warming ahead, how falling ice coverage of the Great lakes is creating heavier cloud cover linked to Seasonal Affective Disorder (SAD), and the potential silver lining of “apocalyptic optimism.” * Non-stop cloud cover over the Great...

TL;DR: The five things that mattered in Aotearoa’s political economy that we wrote and spoke about via The Kākā and elsewhere for paying subscribers in the last week included: * The new National-ACT-NZ First coalition Government itself plans to accidentally and deliberately accelerate inflation via hikes in central and local Government fees and charges in the coming 18 months, which endangers its...

TL;DR: Shock and outrage is mounting at the rulings of the Independent Hearings Panel (IHP) on a new District Plan for Wellington City, which actually expand character protections on villas on the equivalent of an extra 120 rugby fields in the leafiest inner city suburbs such as Mt Victoria, Thorndon and Kelburn. The panel’s rulings fly in the face of evidence in Auckland and Christchurch that inc...

A year on from Cyclone Gabrielle and devastating Anniversary Day floods in Auckland, the new Government and councils remain mired in a pass-the-parcel and make-it-up-as-they-go-along approach to preparing for and responding to climate-change-driven weather catastrophes. Owners of thousands of now-unliveable homes remain stranded between councils, insurers and the Government, all of whom are trying...

TL;DR: In this week’s wrap of climate news, Bernard Hickey and Cathrine Dyer talk about how climate sceptics amplify research that confirms their own biases into the mainstream. They also discuss a survey about who are Aotearoa-NZ's climate sceptics and how they’re changing. We also discuss how they influenced the 2023 election result. Cathrine Dyer’s journalism on climate and the environment is a...

TL;DR: The five things that mattered in Aotearoa’s political economy that we wrote and spoke about via The Kākā and elsewhere for paying subscribers in the last week included: * The Reserve Bank ’s proposal this week to loosen Loan to Value Ratio (LVR) restrictions at the same time as introducing Debt To Income (DTI) restrictions is expected to add demand pressure to house prices, just as the cent...

TL;DR: Sea and air temperatures smashed records in 2023 and now most of the Davos crowd expect a catastrophic global climate event in the next decade. So why can’t humans organise themselves to stop one happening? The Kākā’s climate correspondent Cathrine Dyer begins her first weekly wrap of 2024 with a closer look at the climate records of 2023 and research showing we may be evolutionarily unfit...

TL;DR: The five things that mattered in Aotearoa’s political economy that we wrote and spoke about via The Kākā and elsewhere for paying subscribers in the last week included: * The new National-ACT-NZ First coalition Government shut down the Auckland ‘Light’ Rail project to avoid spending up to $29.2 billion over decades, which was the right decision for the wrong reasons and still leaves the Gov...

TL;DR: After a few weeks of debate and some digging around, we’re happy to commit to staying on Substack for the foreseeable future. Substack doesn’t have a ‘National Socialist’ problem and its ease of use and its community-and-network-building tools are infinitely better and healthier than the alternatives. I’ve built and run at least four internet publishing and/or email subscription systems and...

TL;DR: Two days after Christmas, Immigration NZ ordered a ‘temporary’ dairy farm worker who has built a family in Tokoroa over 10 years on rolling visas to go home because of a risk he might need kidney treatment. The latest case reported by Corazon Miller at 1News shows how unsustainable and unfair our current migration system has become, given it relies on a delusion that hundreds of thousands o...

TL;DR: The Government spent around $1.5 billion on emergency housing in the last five years and is now spending upwards of $7.1 billion a year on accommodation supplements, rent subsidies, first-home-buyer subsidies, motels, caravans and transitional housing. Stuff Federico Magrin One argument given against fixing Aotearoa-New Zealand’s housing supply and demand crises to lower the most expensive...

TL;DR: A massive gap is opening up between the Climate Commission ’s advice and the new Government’s actions on reducing emissions. Two large swathes of recommendations appear to gone unheard in the first months of decisions by the National-ACT-NZ First Government on (not) reducing emissions from transport. Cathrine Dyer’s journalism on climate and the environment is available free to all paying a...

TL;DR: Auckland’s beaches have 50 times more microplastics pollution than previously thought, a new study shows, partly because of all the synthetic rubber shed by its increasingly heavy cars, SUVs and double-cab utes — even the new electric ones — and sluiced into the sea by stormwater systems. Microfibres from synthetic materials used in increasingly popular athleisure and ‘fast-fashion’ clothin...

TL;DR: Weeks ago, Nicola Willis accused Grant Robertson of ‘fiscal vandalism” in handing over a set of books she said were littered with ‘snakes, snails and fiscal cliffs.’ Yesterday, she repeated the accusation and unveiled a set of books without any real surprises, budget blowouts, or even many details of her own Government’s plans for income tax cuts funded by new taxes elsewhere, benefit cuts...

TL;DR: Finance Minister Nicola Willis will publish her first ‘mini’ Budget at 1pm today. It should detail her earlier warnings about the ‘fiscal cliffs’ and ‘snakes and snails’ she says Labour left for National and both the scale and nature of the tax cuts agreed in coalition negotiations, along with how they’ll be paid for. It should also detail the the Budget’s return to surplus, the new Governm...

(Resent to include correct audio. My apologies.) TL;DR: Councils and infrastructure managers are warning unplanned and unbuilt-for population growth has created deficits worth hundreds of billions of dollars that councils will have to fund with double-digit rates increases for decades, unless they get extra funding tools or capital help from the Government. LGNZ , Āpōpō . Meanwhile, the Government...