A government agency planning more nice-to-haves
Croaking Cassandra
by Michael Reddell
6d ago
Almost all government agencies are in cost-cutting mode at present, under instructions from the incoming government. All sorts of things they, or the previous government, thought were nice to have and some things perhaps they thought were really rather useful indeed seem to be going by the wayside. But at the Reserve Bank they are planning a new nice-to-have. The Bank has a consultation process open at present on a proposal to “invest in” (that is public sector for “spend”) a new survey of business people, asking about their specific numerical expectations for a subset of macroeconomic variabl ..read more
Visit website
Goodbye to the Productivity Commission
Croaking Cassandra
by Michael Reddell
1M ago
The Productivity Commission closes its doors on Thursday and goes out of existence. There have been a couple of recent articles on the demise of the Productivity Commission, and the chair (Ganesh Nana) has even put out his own statement (not exactly compelling) on productivity, and policy options for improving New Zealand’s dismal performance. There has been a degree of unreality about some of the recent comments. Getting rid of the Commission was an ACT policy (and one I support) but when David Seymour was quoted as saying it wasn’t about left-wing economist Ganesh Nana personally we can take ..read more
Visit website
Once were a trading nation
Croaking Cassandra
by Michael Reddell
1M ago
I’ve used here before the snippet from older books that in the decades before the Second World War it was generally accepted that New Zealand had the highest value of foreign trade per capita of any country.  Estimates of historical GDP per capita suggest we also had among the very highest levels of real GDP per capita. That was then. Yesterday I noticed this tweet from a Herald journalist. I presume the chart was taken from The Treasury’s Briefing to the Incoming Minister. 2021 wasn’t a great year for comparisons, since our border had been largely closed, directly affecting exports and impor ..read more
Visit website
The Conway speech
Croaking Cassandra
by Michael Reddell
1M ago
I’ve been rather tied up with other stuff for the last few weeks (including here) which is why I’ve not previously gotten round to writing about the first piece of monetary policy communications from our Reserve Bank this year.  That was the “speech” by the Bank’s chief economist (and MPC) member Paul Conway given to anyone and no one in particular over the internet last Tuesday. It had been a couple of months since anything had been heard from any MPC members, in what are not exactly settled or uninteresting times, and it is still several weeks until we get the first formal monetary policy re ..read more
Visit website
Conflicts of interest
Croaking Cassandra
by Michael Reddell
2M ago
A while ago I stumbled on the report of Kristy McDonald QC, dated 22 February 2022, which had been commissioned by Hon David Clark, then Minister of Commerce, into aspects of the appointment of the default Kiwisaver providers, and specifically around the handling of conflicts of interest involving the then chief executive of the Financial Markets Authority (FMA) whose brother-in-law was the chief executive of one of the providers. The FMA provided a strictly limited bit of advice to the Minister. I was less interested in the specifics of the case - which didn’t reflect very well on the FMA or ..read more
Visit website
Avoiding scrutiny
Croaking Cassandra
by Michael Reddell
2M ago
Regular readers will recall that I have, intermittently, been on the trail of the approach taken to the selection (and rejection) of external MPC members when the current crop were first appointed in 2019. I have been pursuing the matter since a highly credible person who was interested in being considered for appointment told me that (a) the Bank’s search company had informed my interlocutor that they would not be considered because they had active research expertise in areas around macroeconomics, and (b) having been somewhat puzzled by this response they had personally checked this understa ..read more
Visit website
Productivity woes….continued
Croaking Cassandra
by Michael Reddell
2M ago
In my post on Monday I drew attention (again) to the fact that New Zealand has made no progress at all in reversing the decline in relative economywide productivity (relative to other advanced countries) since what was hoped to be a turning point, with the inauguration of widespread economic reforms after the 1984 election. If anything, the gaps have widened a bit further, and more countries (most former Communist ones) have entered the advanced country grouping, first matching and now overtaking us. Despite being so far behind the OECD leaders there are also clear signs that labour productivi ..read more
Visit website
Unconvincing
Croaking Cassandra
by Michael Reddell
3M ago
The Herald ran an op-ed yesterday under the heading “Why the Government’s new Reserve Bank mandate may lead to worse outcomes”. It was written by Toby Moore who served as an economic adviser in Grant Robertson’s office while he was Minister of Finance (a fact the Herald chose not to disclose to its readers). I’m more interested in the substance of his argument. Moore is a serious guy, and I suspect he’d run his arguments whether or not he’d ever taken up a role with Robertson. But I think his core argument ends up not very persuasive. Moore opens his article pointing out that there isn’t an ov ..read more
Visit website
Deep falls in real per capita GDP
Croaking Cassandra
by Michael Reddell
3M ago
I ran this chart in a post the other day The fall in New Zealand’s per capita real GDP (averaging production and expenditure measures) over the last year has been quite striking set against other advanced (OECD) countries for the same period. We are equal second-worst, and quite a bit worse than the next country with its own monetary policy (Sweden) - I’m mainly interested in the inflation situation.  The fall in real per capita GDP in New Zealand thus far isn’t much short of the fall experienced in the 2008/09 recession. With recent data it is certain there will be revisions and thus it isn ..read more
Visit website
Economic underperformance
Croaking Cassandra
by Michael Reddell
3M ago
With both the annual and quarterly national accounts data having come out recently it is time for a quick update of some old charts. First, labour productivity (real GDP per hour worked). This chart is from the period since just prior to Covid, and for both New Zealand and Australia If you want some slight consolation, at least we haven’t lost any ground relative to Australia over this period, but for both countries it is (on current readings) almost four wasted years, with no economywide productivity growth at all. And whereas Australia’s terms of trade have risen by 11 per cent over that pe ..read more
Visit website

Follow Croaking Cassandra on FeedSpot

Continue with Google
Continue with Apple
OR