The Kākā by Bernard Hickey

TL;DR: Stronger-than-forecast net migration and population growth looks set to make Labour’s last Budget before the election on October 14 more austere and detract more from inflation than most believed from a first look at last Thursday’s Budget 2023. The implications for the economy, residential land prices, interest rates and Government borrowing would be profound if net migration keeps poundin...

TL;DR: The Government has adopted some of the US-style ‘Green’ industrial policy that is proving so effective in ramping up emissions reductions there, announcing the spending of $140 million from the Climate Emergency Response Fund to pay for almost half of a new electric arc furnace at NZ Steel’s Glenbrook plant. In an immediate response, National Leader Christopher Luxon accused the Government...

TLDR: The week’s news in Aotearoa’s political economy I covered via The Kākā for paying subscribers included: * All the key details from Budget 2023 on Thursday, where I travelled to Wellington for the Budget lockup and asked Finance Minister Grant Robertson about just how inflationary the Budget was. I also asked Housing Minister Megan Woods about why Labour is only planning one more year of stat...

TL;DR: Bank economists last night firmed up their forecasts for an Official Cash Rate as high as 6.0% before the election after judging Budget 2023 to be more inflationary and generating more borrowing than they expected. Ratings agency Standard & Poor’s warned overnight the Budget could put Aotearoa’s AA+ sovereign credit rating under pressure, although it stopped well short of issuing any formal...

TL;DR: The Labour Government has unveiled a couple of middle-class welfare policies in its last Budget before the October 14 election, which is on a knife edge and will be decided by a slither of median voters who will welcome $1.6 billion in spending on extra child-care subsidies and grants for home insulation and heat pumps. Finance Minister Grant Robertson has tried in Budget 2023, his sixth as...

TL;DR: The Loafers Lodge fire has exposed the extent of Aotearoa’s housing and poverty crises, just days before the Labour Government will unveil yet another ‘no-frills’, ‘just the basics’ and ‘bread and butter’ Budget aimed at keeping interest rates low and asset values high, rather than investing heavily to solve these twin crises. Speaking on the eve of tomorrow’s Budget, Finance Minister Grant...

TL;DR: Christopher Luxon’s decision to rule out National governing with Te Pāti Māori and to sound a Don Brash -like ‘one person, one vote’ alarm appears to be painting his party’s and his own support into a more extremist and less popular corner with fewer pathways to governing after the October 14 election. The latest Newshub-Reid Research poll out last night shows support for both National and...

TLDR: This week’s news in geopolitics and Aotearoa’s political economy I covered via The Kākā for paying subscribers included: * Migration stats showing annualised net migration running at well over 100,000, creating population growth of close to 2%, which is four times the rate the Stats NZ and Infrastructure NZ assume for long term population growth; Friday’s Chat * Finance Minister Grant Robert...

TL;DR: PM Chris Hipkins as good as confirmed yesterday a market study into banks would be announced before the election and happen some time in the next year or two. In a deeper analysis below the paywall fold in the podcast above for paying subscribers , I argue any market study should focus on why Aotearoa’s big four Australian-owned banks are able to make world-beating profits without much risk...

TLDR: This week’s news in geopolitics and Aotearoa’s political economy I covered via The Kākā for paying subscribers included: * A screed of bank results showing yet more surges in net profit from the big four that dominate our economy and fuel our housing market, just as the Reserve Bank unveiled evidence the banks are too profitable, relative to the risk they take for shareholders. Friday’s emai...

TL;DR: A screed of bank results in the coming week are expected to show yet more surges in net profit from the big four that dominate our economy and fuel our housing market. This week the Reserve Bank compiled and unveiled evidence our banks are too profitable, relative to the risk they take for shareholders, but it is leaving any decisions about an anti-monopoly investigation in the hands of the...

TL;DR: - Transport Minister Michael Wood announced changes to the Government’s much-more-successful-than-expected Clean Car Discount scheme this morning that he talked up as increasing emissions reductions and increasing rebates for used electric imports. That’s how the changes are initially being reported, but a closer look reveals a doubling of fees for double-cab utes such as the Ford Ranger an...

TL;DR: - A survey of 150 pharmacists last month has found the $5 co-payment fee for prescriptions is leading to widespread distress, mental health incidents and unnecessary surgeries costing billions per year — all to earn the Government about $150 million a year in fees and to repay public debt just a tiny bit faster. The Independent Community Pharmacy Group survey found the co-payment fee, which...

TLDR: This week’s news in geopolitics and Aotearoa’s political economy I covered via The Kākā for paying subscribers included: * An Inland Revenue Department study of Aotearoa’s 311 wealthiest families with combined wealth of $85 billion and annual income in 2020/21 of $14.6 billion has found just seven percent of their income was taxed as personal taxable income that year because of the lack of a...

This is a free preview of a paid episode. To hear more, visit thekaka.substack.com TL;DR: Prime Minister Chris Hipkins firmed up his re-election strategy this week by reiterating his ‘no frills’ and low-risk approach to governing, downplaying any talk of a re-run of the difficult debates about a Capital Gains or Wealth tax. Instead, he is focusing the Government on doing whatever it can to: * lowe...

This is a free preview of a paid episode. To hear more, visit thekaka.substack.com TL;DR: PM Chris Hipkins is expected to squelch any revival of talk about a Capital Gains Tax when he gives a luncheon speech to business leaders in Auckland today. The speech will squash any momentum that might have built after yesterday’s stunning report revealing Aotearoa’s richest pay tax at a rate anywhere betwe...

This is a free preview of a paid episode. To hear more, visit thekaka.substack.com TL;DR: Wellington City Council officials have repeatedly acted to block new housing supply, despite the express instructions of the majority of councillors in key votes last year and in the face of the desperation of young workers facing the most expensive and lowest quality rentals in Aotearoa. I spoke to pro-housi...

TLDR: This week’s news in geopolitics and Aotearoa’s political economy covered on The Kākā for paying subscribers included: * Council staff in Wellington going rogue on their council, quietly reinserted 797 villas into the Council’s district plan, despite express instructions from Council after a heated debate and vote last year that character zones stopping building be cut by 72%; Monday’s email...

This is a free preview of a paid episode. To hear more, visit thekaka.substack.com TL;DR: Next week the Climate Commission will unveil its draft advice for Aotearoa’s 2026-30 emissions budget. Chair Rod Carr tells me in the interview above for both free and paying subscribers the Government is falling behind after rejecting the Commission’s advice on the Emissions Trading Scheme, bringing agricult...

TL;DR: The Government professes to take emissions reductions seriously, but has repeatedly made policy decisions in recent months that allow our … This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TL;DR: Even when young voters elect councillors and MPs they want with demands for more housing, there are plenty of forces behind the scenes able to subvert that democratic drive and re-establish the ‘democratic deficit’ behind our housing shortages for decades. The Dominion Post’s Erin Gourley reported on Saturday via Stuff that Wellington City Council staff had quietly reinserted 797 villas int...

This is a free preview of a paid episode. To hear more, visit thekaka.substack.com TLDR: This week’s news in geopolitics and Aotearoa’s political economy covered on The Kākā for paying subscribers included: * Treasury estimating the Government could have to spend from $3 billion to $24 billion buying carbon credits overseas to meet our Paris climate obligations, depending on the scale of our failu...

This is a free preview of a paid episode. To hear more, visit thekaka.substack.com TL;DR: It never rains but it pours. The Government has just had to delay moves by our biggest city to embed housing densification into its plans because of bad weather, even though densification is one of the main ways we can reduce climate emissions. We’re chasing our tail, and we’re losing. Elsewhere below the pay...

TL;DR: The Government has just loosened migration settings dramatically in a last-minute attempt to stop a systemic health system crisis turning into a catastrophe over the winter, just ahead of the October 14 election. Yet again, a short-termist and reactive policy is being used to try to solve a structural problem, rather than challenging or changing the politically difficult conditions creating...

TL;DR: Former PM Jacinda Ardern will give her valedictory speech at 5.30 pm in Parliament today. She will rightly be farewelled with affection by her colleagues and by many, including me, who admired her decisive and empathetic actions as PM during the March attacks and the first year of Covid. I recommend watching the full uncut interview from last night on 1News with John Campbell . Ardern was a...