Radio NZ reporting that Aussie banks are dropping their mortgage interest rates for a second time in a week to try and match Kiwibank. Can’t get link yet.
Doesn’t bode well for economic expectations but makes nonsense of Ralph Norris’ (NAB/BNZ) claim earlier this week that Kiwibank rates were too low.
About time Key gave Kiwibank the small capital boost it needs to move business lending rates down in a similar way.
I’m sick of the one way funnelling of cash west over the ditch.
Kiwibank have dropped their interest rates - a clear indication that smiling and waving and voting yourself some more housing money has not been good enough to keep the recovery on track in NZ.
Hi RA readers – I’ve been off air a bit lately due to running around the country on the post- Budget speaking tour, and because my laptop died!
Today parliament shifted into a new stage of the Budget debate – the Appropriations Bill that legitimises the Supplmentary Estimates (amended spending lines) between Budgets 2009 and 2010. It was remarkable for what it does not say – nothing about a plan for protecting jobs or lifting incomes during the worst of the Great Recession. No new ideas over there.
Quick feedback from the Budget tour: spoke to about 20 groups, a mixture of Labour-organised public meetings, community sector groups and businesses. Hard to tote up exactly but would have seen close to 800 people face to face: groups of 160 down to about 25, plus individual business site visits.
The feedback was clear: most Kiwis understand that by the time inflation of 5.9% next year eats away the tax swindle, and wage growth is held down, they will be worse off. That includes increased govt charges like ACC and ECE, plus power bills, rent and higher mortgages. The Government made the classic mistake of overpromising and under-delivering. Kiwis hate the rise in GST. They know the tax cuts aimed primarily at the wealthy are unjust and inefficient.
Was it a coincidence the govt’s polling fell 5% in the week after the Budget?
Second, businesses and commentators understand that the Budget lacks a real plan for jobs, incomes and growth. Fiscal prudence matters, but it is no substitute for a strategy to address the yawning triple deficit around the savings gap, current account deficit and innovation deficit. Gutting Kiwisaver, the R and D tax credits and NZSF prefunding made these worse. The Govt’s innovation package, which represents only 39% of the value earlier striped out, has been almost universally panned.
Third, the added debt from the unaffordable tax cuts has opended up $1.1 bn fiscal hole over 4 years, $9.2bn over 12 years, and that makes the job of turning the boat around ever harder. National will seek to fill this “strategic deficit” through asset sales and service cuts. Don’t let them!
Future posts are going to broaden out somewhat to the rlated issues of monetary and fiscal settings that surround the needed economic strategy.
Classic quote from John Key tonight on TV3 commenting on the poll which resoundingly rejected the sale of Kiwibank and other state assets.
“There’s been a long history of demonising asset sales in New Zealand,” said John.
So JK, does that mean you think asset sales are good? And that the view that we should own our own stuff is demonic?
I know which side I’m on mate. And I don’t feel like a demon.
But I’m interested to know (if you’ve been stymied on selling off our assets) how you’re going to continue to pay for tax cuts, while refusing to invest in kiwi jobs.
Above John Key saying National would never sell Kiwibank.
Below John Key denying he said it.
Stupid. Liar.
Good fun in the House today grilling Bill English here and here on why the Government’s online tax/benefit calulator leaves out the forecast inflation rate of 5.9% in 2010, and thus overstates benefits. Its a blatant case of misleading the public. The Speaker rules it is a straight question that deserves a fair answer: Bill English doesn’t get it, and digs a hole deeper than the original mistake…
…It would be funny except it has misled many average income Kiwis who were encouraged by the Govt to believe that the budget left them “better off”, when in reality it left them behind until at least 2014. It will be no fun at the checkout queue for many hard working families.
The jigsaw pireces of the Budget are starting to click in the public mind if recent polls are any indication. In the last week :
In other words: give away taxes up front (very largely to their mates); run an out year deficit (deliberately); compress spending (as ‘prudence ” then demands); and flog off what is left of the family silver to fill the remaining gap (dressed up as mum and dad savings products, of course).
What does all this mean for the average Kiwi?
Moral of story: do NOT let National get a second term Stop the malign juggernaut before it does irrepairable damage.
Bill English has got more explaining to do now than when John Key rang to tear strips off him after his gaffe on selling KiwiBank last Friday.
English was clearly guilty of saying what he really thought when there were no cameras in the room (sounds like an earlier National Party conference remark.) Unfortunately there were print journos taking notes. Ooops.
This morning Kiwbank’s highly regarded CEO Sam knowles announced his resignation.
We do not know why yet.
It may be coincidence that just days after the MOF says he wants to flog off the Bank, which has grown amazingly well within NZ Post Group and is now a significant competitive force in the market, its excellent CEO resigns.
It may be coincidence that John Key was apparently furious with English after Friday’s loose lips blew a hole in the Govt’s post budget spin, and spent much of the last two days in damage control. The issue has reportedly widened the gap between the Beehive’s 9th (PM) and 7th (MOF) floors.
This is a gathering storm.
The economics of retaining KiwiBank in public hands are overwhelming.
The issue demonstrates with crystal clarity that the Govt has not got a strategic clue about our long term financial future. We MUST have a stake in our financial system. It is only some 7% of the market but it is crucial to assist the competitive dynamics and local capital formation.
Just how much pressure was put on Key, by whom? On English in the last week? On Knowles? Over what period?
One thing is clear – the Govt has enraged 700,000 plus loyal cutomers of KiwiBank who CHOSE to belong. My email is running white hot.
The Govt now has serious governance questions to deal with amidst the resignation of a stellar CEO.
Watch this space.
