john walley’s blogging on the new zealand economy, manufacturing, productivity, business | john walley blog

Conventional - what you would expect.

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3 comment(s) Posted in: Conventional

Over the past couple of years our apparent resilience to the financial crisis and optimistic forecasts of economic growth have been used to justify the Government’s status quo approach. Record high commodity prices have meant that primary industries have grown somewhat despite a high exchange rate decimating returns. In addition, consistently unrealistic economic forecasts from Treasury...

tags: traded sector, twi, loan to value ratios, monetary policy, innovation

0 comment(s) Posted in: Conventional

Numbers were a big issue leading up to the election. There was debate on the level of spending, net debt vs. gross debt and the time it will take a particular policy framework to deliver a surplus to the Government current account. Out turns of our national accounts depend on our ability to earn as much as our propensity, or otherwise, to spend.

Boosting earnings now needs more than...

tags: gross debt, public debt, monetary policy

0 comment(s) Posted in: Conventional

Policies to help the traded sector were one of the themes of the election campaign with a contrast in approach between the two major parties clearly evident. National argued that more of the same and reducing debt would be sufficient to ease the pressure on the exchange rate, while Labour promoted a more interventionist strategy through changes to the Reserve Bank Act and the introduction...

tags: exchange rate, reserve bank act, capital gains tax

0 comment(s) Posted in: Conventional

This is worth a watch: in a world sinking in debt it is time to fix the systemic problem. Steve Keen has some different ideas:

http://news.bbc.co.uk/2/hi/programmes/hardtalk/9641873.stm

1 comment(s) Posted in: Conventional

It is exasperating to watch gossip about what may or may not have been said distract from serious matters in an election process. Why is it that gossip and speculation warrants more media attention than pressing issues around policy and policy options? Once the distraction of the election has passed, whoever forms the new government must look to prudence and economic reform – prudence will...

tags: election 2011, european crisis, r&d, monetary policy, capital gains tax

0 comment(s) Posted in: Conventional

The political race has come to the fore after the end of the rugby world cup. There has been some interesting policy released. Coming on top of earlier releases on fiscal and monetary policy Labour’s savings and superannuation policy seems to extend some new thinking and different policy directions. It will be interesting how the different parties see the economy in general and in...

tags: changenz, election 2011, superannuation, credit rating, trade balance

0 comment(s) Posted in: Conventional

The voice of the real economy needs to be stronger in New Zealand, every year, but particularly in an election year. The NZMEA has launched a website, Changenz.co.nz , to give a clear voice to the needs of the tradable economy and ultimately the needs of a sustainable New Zealand economy.

The last three years has seen few gains for...

tags: exchange rate, tax balance, research and development

0 comment(s) Posted in: Conventional

Credit rating downgrades from Fitch and Standard and Poor’s have once again highlighted New Zealand’s problem with balancing its current account with the world. Low local savings and an appetite for asset backed offshore debt, combined with a lack of the focus on the tradable sector are once again driving our current account deficit.

Fitch also identified the problem:
"The...

tags: current accouint deficit, credit rating, external debt, currency

0 comment(s) Posted in: Conventional

The potential for European countries and their banks to default on debt raises the question of what impact these defaults would have on the global economy.

• What impact will the European crisis have on the rest of the world?
• What has been learnt from the 2008 financial problems?

If the economic crisis in 2008 did not demonstrate some serious financial problems the...

tags: european crisis, vickers commission, productive investment, rbnz

0 comment(s) Posted in: Conventional

This years’ election can deliver a change in our economic framework and address an already significant debt problem. Elections over the past couple of decades have tended to be contests of who can give the largest handouts rather than a legitimate policy contest. This one must be different.

There has been no significant action to address our debt problem. Politically difficult...

tags: election 2011, superannuation, added value, exchange rate