The Kākā by Bernard Hickey

TLDR: This week’s news in geopolitics and Aotearoa’s political economy covered on The Kākā for paying subscribers included: * revelations that the Reserve Bank (Te Pūtea Matua) is paying billions per year in interest to the big four Australian-owned banks, as well as providing $19 billion of subsidised loans to them at a time when the Government more broadly is refusing requests for extra spending...

TL;DR: Once a year, every year, from now on, in our not-so-slow-cooking climate crisis, there will be a moment when the most important number in Aotearoa’s own personal, national and financial economies could implode. It is the day when the annual home insurance renewal letter arrives to advise there will be no renewal. Reserve Bank (Te Pūtea Matua) analysis released this week showed 25% of Auckla...

TL;DR: The taxpayer is set to pay banks upwards of $3.3 billion in interest costs on over $53 billion of cash balances they’ve built up in settlement accounts at the Reserve Bank since covid, Jenee Tibshraeny has revealed in a NZ Herald-$$$ scoop this morning from documents obtained under the OIA. Financial Minister Grant Robertson considered forcing the Reserve Bank (Te Pūtea Matua) to pay banks...

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 included: * The runs on Silicon Valley Bank and First Republic Bank on the west coast of the United States that forced the US Treasury, FDIC and Federal Reserve to intervene to promise full payouts to depositors, over and abov...

TL;DR: Auckland Mayor Wayne Brown has become our version of Donald Trump and Boris Johnson , except without any of the insatiable appetite for media appearances. He has mastered their impulsive crash-or-crash-through styles of ‘policy making’ and could poison the well for National on October 14 if he (and National) are not careful. Yesterday’s decision to pull Auckland Council out of LGNZ was not...

TL;DR: The new Consumer Advocacy Council set up as a result of the Labour Government’s Electricity Price Review in 2019 has called on either or both the Commerce Commission and the Electricity Authority to look into whether retailers are engaging in anti-competitive or restrictive practices by bundling their services in ‘deals’ with broadband and/or gas providers. I spoke with Council Chair Debora...

This is a free preview of a paid episode. To hear more, visit thekaka.substack.com TL;DR: No wonder an entire generation of investors are used to ‘buying the dip’ and ‘holding on for dear life’. US Treasury Secretary Janet Yellen has again overnight reassured American savers and global savers generally that the power of the US Treasury and Federal Reserve to loan unlimited amounts to banks will pr...

TL;DR: The Opportunities Party’s Leader Raf Manji is hopeful the party’s new Teal Card, a type of Gold card for under 30s, will be popular with students, and not just in his Ilam electorate where students make up more than a quarter of the voters and where Manji is confident he can outpoll two low-profile candidates from National and Labour. I spoke with Manji in the podcast above about: * TOP’s T...

This is a free preview of a paid episode. To hear more, visit thekaka.substack.com TLDR: This week’s news in geopolitics and the political economy covered on The Kākā included: * PM Chris Hipkins’ announcement of the rest of a policy bonfire to save a combined $1.7 billion, but which blew up the Emissions Trading Scheme (Thursday’s email ), upset the Greens and was overshadowed somewhat by Stuart...

TLDR: Now we have a climate liability number to measure the potential failure of the RMA reforms with. Along with housing affordability effects, I think it’s the lens through which we should assess all our big decisions and changes. A damning and detailed report by Sapere for the Infrastructure Commission (Te Waihanga) on the RMA reforms was released this morning. Sapere forecast the expected dela...

TLDR: Bonfires can be dangerous things when they get out of control. They also create a lot of smoke and heat and burn the grass. I hate to think of the climate emissions. But sometimes, they do much more damage when someone accidentally throws on a full can of petrol and the fire burns too hot. It turns out that’s what the Labour Government has just done with its ‘policy bonfire’ of late 2022 and...

TLDR: PM Chris Hipkins announced a further $1 billion of spending cuts on emissions reduction last night, arguing the Government needed to ‘cut its cloth to fit’ to show households it understood their pain about higher living costs. But in choosing to spend less on efforts to address climate change in the midst of an actual climate emergency event, Labour has fallen into the classic mistake of see...

This is a free preview of a paid episode. To hear more, visit thekaka.substack.com TLDR: This week’s news in geo-politics and the political economy covered on The Kākā included: * National proposed a select committee inquiry into bank profits, which prompted the Government to say it was considering a full market study of the banking sector by the Commerce Commission (Thursday’s email ); * National...

TLDR: A survey ordered by the Ministry of Transport has found more than 80% of young people wanted a wealth tax, congestion charges and/or pollution pricing to pay for improvements in public transport, walking and cycling, rather than only through fuel taxes, as is the case now. However, the University of Auckland survey of over 400 people late last year also found less than a third of older respo...

TLDR: This is how politics works in the real world: outrage erupts over the prospect of fuel taxes being used to build cycle paths, so that plan is dumped within 12 hours, and ‘Ford Ranger Man’ wins again. New PM Chris Hipkins jumped in yesterday to overturn a Ministry of Transport strategy to prioritise transport spending around climate emissions reduction over the next three years, rather than r...

TLDR: This week’s news in geo-politics and the political economy covered on The Kākā included: * National released its plan to repeal Three Waters and push the responsibility, the bill and the blame for building infrastructure back down to councils, with Christopher Luxon pledging the plan would not increase rates, although he acknowledged councils may lift water charges; Monday’s email and podcas...

TLDR: I interviewed Reserve Bank Chief Economist Paul Conway soon after the central bank announced it had decided to go ahead with a 50 basis point hike in the Official Cash Rate to 4.75%, as expected, but also after some had called for a pause to assess the damage from Gabrielle. The full interview is available for all in the podcast above. Conway detailed the Reserve Bank’s initial forecasts tha...

TLDR: National has confirmed it will repeal Three Waters legislation and disestablish the four new water entities set up under the Labour Government’s reforms. National would replace them with a new water regulator and the hope councils will voluntarily charge for water and create their own larger entities able to borrow in their own right to pay for infrastructure. In effect, National wants to pu...

This is a free preview of a paid episode. To hear more, visit thekaka.substack.com TLDR: This week, the clean up after cyclone Gabrielle forced the Government into a last-minute rewrite of its pre-election Budget 2023 set for May 18, but the Reserve Bank warned it against spending with extra tax or less spending to ensure the rebuild doesn’t generate more inflation in an economy straining at full...

TLDR: The Government announced the beginning of its Gabrielle emergency response last night, pledging an initial $300 million to help repair roads, bridges, communications and to bolster small businesses. But PM Chris Hipkins’ new Cabinet has yet to address its restated ambition of ‘building back better’ and more resiliently, which the Opposition has also pledged to do. Today I take a closer look...

This is a free preview of a paid episode. To hear more, visit thekaka.substack.com TLDR: This week, Cyclone Gabrielle wrecked the Hawkes Bay, Gisborne and parts of Coromandel and Northland, killing at least 10 people, cutting off power to 225,000 homes and making 10,000 homeless in what appears to be Aotearoa’s biggest natural disaster since the Christchurch Earthquakes of 2011 and our worst clima...

TLDR : So what would it take to shock Aotearoa’s voters and politicians into taking more substantial action to reduce climate emissions and prepare for climate change? You’d think our most expensive weather catastrophe in history might do the trick. Or even two of them inside three weeks? Yeah…nah. A poll taken after the January 27 storms in Auckland found less than half of voters in Auckland and...

This is a free preview of a paid episode. To hear more, visit thekaka.substack.com TLDR: The Labour Government cleared its decks this week of some unpopular policies ahead of the election and has tried to make employers happier, which may extend new PM Chris Hipkins’ early-2023 polling honeymoon. One of the unloved policies biffed overboard was a proposed merger of TVNZ and RNZ . Hipkins also stop...

TLDR: He’s done it. New PM Chris Hipkins has ‘cleared the decks’ of all manner of flotsam and jetsam to make the Labour Government’s ship go faster and have a clearer field of fire for targeting National when the election campaign starts in earnest shortly after the May Budget. Hipkins announced his new ministry had decided at its first substantial Cabinet meeting this afternoon to ditch all manne...

TLDR: The phrase ‘penny wise and pound foolish’ is one that applies across much of the Government’s approach to spending and investment over the last 30 years. Both National and Labour Governments have kept sinking lids on real spending and investment on the likes of housing, transport, health and education spending since the early 1990s in a reflexive and deep-seated drive to lower taxes and Gove...