Some economists think a National-led government would be more inflationary than Labour

https://www.interest.co.nz/economy/124610/some-economists-think-national-led-government-would-be-more-inflationary-labour

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The Labour Party is not going to bring back a heavy taxation policy because of a backbench revolt, according to its leader, Chris Hipkins. He says suggestions to the contrary are wrong.  Hipkins cancelled work on a wealth tax in July, which led to the resignation of his Revenue Minister, David Parker. Parker had been working on this idea for months.  But several reports suggest the idea is rumbling away in the Labour caucus, which is biding its time. The reports say the Taieri MP and chair of the Finance and Expenditure Committee Ingrid Leary has spoken in favour of a wealth tax or a capital gains tax.

https://www.interest.co.nz/public-policy/124590/labour-leader-chris-hipkins-insists-there-no-rumbling-mutiny-among-back

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The Reserve Bank of Australia (RBA) has held its cash rate at 4.1% for the fourth consecutive monthly monetary policy review, but says a further increase could be needed to get inflation back down to its target range. It made the same warning at its September 6 meeting as today. From July to August, the Australian monthly consumer price index rose from 4.9% in July to 5.2% in August. The RBA again says Australian inflation has passed its peak despite that rise. And with interest rates increased by four percentage points since May 2022, they're working to realign supply and demand in the economy and will continue doing so.

https://www.interest.co.nz/bonds/124585/reserve-bank-australia-sings-same-tune-under-new-governor-bullock-philip-lowe-says

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National says it doesn't plan to provide financial support to local councils for water infrastructure under its alternative to Three Waters

https://www.interest.co.nz/public-policy/124567/national-says-it-doesn%E2%80%99t-plan-provide-financial-support-local-councils-water

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The New Zealand Tax Podcast – is Child Support broken? The perils of putting your home in a trust. And is there a mood change for a capital gains tax?

https://www.interest.co.nz/public-policy/124549/new-zealand-tax-podcast-%E2%80%93-child-support-broken-perils-putting-your-home-trust

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The New Zealand First deputy leader and finance spokesperson Shane Jones discusses financial and economic policy in the second of our series of interviews with finance spokespeople from the main parties

https://www.interest.co.nz/public-policy/124532/new-zealand-first-deputy-leader-and-finance-spokesperson-shane-jones-discusses

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The use of hydrogen as a fuel has been given a new lease of life in the latest Labour Party election gambit.  The party's Climate Change manifesto says hydrogen is a  "key future tool for reducing emissions in the parts of the world economy that will be difficult to decarbonise, such as heavy transport and aviation." The document goes on to say hydrogen could become an export industry, and also create high-wage jobs in local businesses.   Hydrogen has long been admired as a fuel because it has no CO2 emissions, only water.

https://www.interest.co.nz/public-policy/124462/hydrogen-given-new-lease-life-labours-latest-election-gambit-just-two-months

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Labour would allow the Climate Change Commission to set Emissions Trading Scheme settings independent of the Government

https://www.interest.co.nz/public-policy/124463/labour-would-allow-climate-change-commission-set-emissions-trading-scheme

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The New Zealand Tax Podcast – as insurers withdraw cover will taxpayers pick up the bill? How an unforeseen law change increased the Super Fund's tax bill. And ACT's updated Alternative Budget dials back its tax cuts

https://www.interest.co.nz/public-policy/124442/new-zealand-tax-podcast-%E2%80%93-insurers-withdraw-cover-will-taxpayers-pick-bill-how

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Tax continues to feature heavily in the Election with the ongoing debate over the validity or otherwise of National's proposed foreign buyer tax. But away from the election, it has been a busy week in the tax world. By far the most interesting story, partly because of its source, but also how it speaks to the structure of our tax system, is the commentary from Matt Whineray, the outgoing chief executive of the New Zealand Superannuation Fund (NZSF), about the fund's tax status. In an interview with the New Zealand Herald's Markets with Madison , he remarked on the NZSF's tax status, noting that since the fund began investing in 2003, it had paid nearly $10 billion in tax, including $2.

https://www.interest.co.nz/public-policy/124350/new-zealand-tax-podcast-should-nz-super-funds-earnings-be-tax-exempt-new

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National's disciplined spending would 'get debt under control' while still investing in health, education, and infrastructure, Nicola Willis says

https://www.interest.co.nz/public-policy/124283/national%E2%80%99s-disciplined-spending-would-get-debt-under-control-while-still

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By Gareth Vaughan New Zealand ought to change its political party funding system so it encourages politicians to connect with as many ordinary New Zealanders as possible, Max Rashbrooke argues, whilst noting it's not in political parties' interests to do so meaning such a change probably won't happen anytime soon. Rashbrooke, a senior research fellow in the School of Government at Victoria University, spoke about political donations in a new episode of interest.co.nz's  Of Interest podcast   as the October 14 election looms .

https://www.interest.co.nz/public-policy/124278/there-case-change-putting-spotlight-nzs-political-donations-election-looms

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The Labour Party has taken the lead in the Taxpayers' Union political poll for the first time since March last year as Chris Hipkins' favorability ratings soar.  The survey, conducted by Curia Market Research, has Labour up 1.1 points on last month at 35.5%, while the National Party increased just 0.4 points to 34.8%.  Act and the Greens each dropped a little over 2 points to 9.3% and 5.7%, respectively.  These results would give Labour the most seats in parliament but would likely see the right-learning coalition forming a government.

https://www.interest.co.nz/public-policy/120247/chris-hipkins-helps-labour-take-lead-taxpayer-union-political-poll-first-time

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When the United States and its G7 partners imposed sanctions on Russia's central bank and barred Western financial institutions from doing business with Russian counterparties, commentators warned of far-reaching changes in the global monetary and financial order. Other countries would see those sanctions as yet another step in the West's 'weaponization' of finance. Fearing that they, too, might one day be on the receiving end of sanctions, governments and central banks would reduce their dependence on the dollar, US banks, and the US-dominated Society for Worldwide Interbank Financial Telecommunication (SWIFT).

https://www.interest.co.nz/currencies/120274/barry-eichengreen-asks-why-widely-predicted-shift-toward-renminbi-dominated

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All the talk in auction rooms and open homes this year has been about first home buyers and landlords flipping from Fear Of Missing Out (FOMO) to Fear Of Over Paying (FOOP). House prices falling as much as 20% from their late 2021 peaks in Auckland City and Wellington City, and falling rents for central Auckland apartment have some people thinking in the moment that this is only the beginning of a deeper and longer fall. Any market always feels darkest before the dawn, and in the moment, feels like it can only get worse (or better if you're a first home buyer or bargain hunter).

https://www.interest.co.nz/property/117184/bernard-hickey-argues-falling-mortgages-rates-landlords-celebrating-likely-national

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‘It's important not to overreact': Australia's top economists on how to fix high inflation

https://www.interest.co.nz/bonds/117180/%E2%80%98it%E2%80%99s-important-not-overreact%E2%80%99-australia%E2%80%99s-top-economists-how-fix-high%C2%A0inflation

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Rabobank says it will need to assess any changes the Reserve Bank makes in the review of its policy for branches of overseas banks to see whether they materially impact "the economic and/or strategic viability of Rabobank's operating model in New Zealand." The Reserve Bank is proposing that all branches of overseas banks operating in NZ be restricted to wholesale business with corporates, institutions and other wholesale investors, meaning they couldn't take retail deposits or offer products or services to retail customers.

https://www.interest.co.nz/banking/117386/rbnz-review-its-policy-branches-overseas-banks-could-call-question-economic-and

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In June Prime Minister Jacinda Ardern said she was concerned about the supply of residential building supplies in NZ, and in particular, of plasterboard. Since then we've seen the introduction of a Plasterboard Taskforce and Winston Wallboard's stranglehold over the use of plasterboard for structural bracing was broken. But what difference has it made? The maker One new plant each year.  SaveBOARD co-founder Paul Charteris' business has been up and running for nine months, with its one New Zealand factory cranking out 500 boards each day made from chucked out coffee cups and rubbish, and plans to open its first Australian plant in three months time — backed by a more than A$1.

https://www.interest.co.nz/business/117402/tackling-plasterboard-crisis-manufacturer-council-inspector-and-minister-weigh

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Worsening housing affordability presents an increased risk of mortgage defaults in New Zealand, according to credit rating agency Moody's Investor Services. In a new report on covered bonds issued by NZ banks, Moody's says it expects housing affordability will remain significantly worse than the average for the last 10 years, "which is credit negative for residential mortgage covered bonds we rate in New Zealand." The report said rising interest rates meant the mortgage payments on new mortgages taken out in August this year would eat up an average of 39.

https://www.interest.co.nz/property/117675/moodys-says-worsening-housing-affordability-has-increased-risk-mortgage-defaults

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The Reserve Bank of Australia (RBA) has increased its cash rate by 25 basis points to 2.60%.Financial markets had expected the RBA to lift the cash rate by 50 basis points.The RBA says it's committed to returning inflation to its 2% to 3% target range over time. Over the 12 months to the June 2022 quarter, Australia's Consumer Price Index (CPI) rose 6.1%. The RBA says its central forecast is for CPI inflation to be around 7.75% over 2022, a little above 4% over 2023 and around 3% over 2024."The cash rate has been increased substantially in a short period of time.

https://www.interest.co.nz/bonds/117868/reserve-bank-australia-lifts-cash-rate-25-basis-points-it-assesses-outlook-inflation

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The housing investors are in full retreat after their full-on assault of the housing market in the second half of 2020 and into 2021. According to the latest figures from the Reserve Bank (RBNZ), investors had their lowest share of the total amount of mortgage money advanced last month since the RBNZ began publishing the detailed data on mortgages by buyer types in 2014. The RBNZ provided this summary of the figures. The $852 million advanced to investors in July made up just 15.8% of the $5.4 billion total mortgage money advanced.

https://www.interest.co.nz/personal-finance/117319/rbnz-figures-show-housing-investors-had-their-smallest-share-mortgage-money

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Property / news No sign of a spring breeze to lift auction activity off its current lows 31st Oct 22, 1:52pm by Greg Ninness Auction rooms around the country remained becalmed last week, with almost no change in either the number of properties being offered or the number selling under the hammer. Interest.co.nz monitored the auctions for 187 residential properties around New Zealand last week (22-28 October), compared to 186 the previous week. Of those, 61 sold under the hammer, down a smidgen from 63 the previous week.

https://www.interest.co.nz/property/118233/no-sign-spring-breeze-lift-auction-activity-its-current-lows

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Property / news ANZ warns 'this is going to hurt' as it revises interest rate forecast higher 26th Oct 22, 3:51pm by Greg Ninness ANZ's latest NZ Property Focus report is not optimistic about the outlook for the housing market. In it the bank's economists have increased their forecasts of how far interest rates will rise and housing prices will fall. "The case to hike the Official Cash Rate (OCR) by more than previously expected is strong, and we now expect two consecutive 75 basis points hikes to take the OCR to 5% come February," the report said.

https://www.interest.co.nz/property/118172/anz-warns-going-hurt-it-revises-interest-rate-forecast-higher

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Property / news The number of people on the waiting list for social housing has fallen for two consecutive quarters 14th Nov 22, 2:51pm by Greg Ninness The number of applicants waiting for social housing dropped in the September quarter for the second consecutive quarter. According to Ministry of Social Development's Housing Register, the number of applicants approved and waiting for social housing peaked at 26,868 at the end of March this year, declined slightly to 26,664 at the end of June then dropped more significantly to 24,996 at the end of September.

https://www.interest.co.nz/property/118450/number-people-waiting-list-social-housing-has-fallen-two-consecutive-quarters

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Property / news Value of new office and warehouse buildings being consented running at record levels 10th Aug 22, 1:46pm by Greg Ninness Commercial property developers are showing no lack of enthusiasm for new projects with the value of new office and warehouse projects hitting record levels in the second quarter of this year. The latest building consent figures from Statistics NZ show that $314 million of new office space was consented in the second quarter of this year, which was the most in any quarter since interest.

https://www.interest.co.nz/property/117123/value-new-office-and-warehouse-buildings-being-consented-running-record-levels

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Westpac has now followed ANZ with some ~+30 bps mortgage rate rises of their own. They have matched ANZ at 5.45% for the one year fixed rate, but have set a lower benchmark for 18 months and two years. And they have declined to follow ANZ for the three year rate up, leaving their rate at 5.65% and -30 lower than ANZ's rate for that fixed term. In fact, Westpac is now (and still) the most competitive of any of the big banks for three years fixed. Will other banks move up? It isn't certain they will, but it does seem likely.

https://www.interest.co.nz/personal-finance/117732/first-bank-take-some-mortgage-rate-space-offered-anz-recently-westpac

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The Reserve Bank's going for broke. Hopefully we won't be the ones going broke

https://www.interest.co.nz/personal-finance/118566/reserve-bank%E2%80%99s-going-broke-hopefully-we-won%E2%80%99t-be-ones-going-broke

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The first home buyers (FHBs) are continuing to make their presence strongly felt in the mortgage market - even as overall levels of mortgage advances still languish in the wake of the buying frenzy in 2020-21. Latest mortgage lending by borrower type figures for October from the Reserve Bank (RBNZ) show that of the $5.588 billion total advanced in the month, some $1.219 billion (21.8% of the total) was to the FHB grouping. That's easily a new record high percentage in a data series that's been published since 2014, beating the previous high of just 20.

https://www.interest.co.nz/personal-finance/118564/rbnz-figures-show-first-home-buyers-had-their-biggest-share-mortgage-money

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Bonds / news NZ Govt Bond Tender #840; Tender Date 1 December 2022 1st Dec 22, 2:10pm by Suhaimi Mohamad The New Zealand Debt Management Office has announced the results of NZ Govt Bond tender number 840 held on Dec 31 2022. Tender Date: Thursday, Dec 1, 2022. Bids close: 2.00pm Results: From 2.05pm Settlement Date: Tuesday, Dec 6 2022 p>  (1) Nominal Bonds - Series Offered : 4.50% 15 Apr 2027   Dec 1- #840 Sep 29- #832 Sep 15- #830 Sep 1- #828 Series Offered : 4.50% 15 Apr 2027         Total Amount offered ($million) 150 200 200 200 Total Amount Allocated ($million) 150 200 200 200 Total Number of bids Received 26 46 50 35 Total Amount of bids Received ($million) 395 361 568 448 Total Number of Successful bids 10 24 1 14 Highest Yield Accepted (%) 4.

https://www.interest.co.nz/bonds/118705/nz-govt-bond-tender-840-tender-date-1-december-2022

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Treasury is forecasting government financial support will have less and less impact on economic demand over coming years, meaning fiscal policy should support Reserve Bank monetary policy efforts to rein in inflation. In the Government's Half-Year Economic and Fiscal Update (HYEFU) out Wednesday, The Treasury says the strategy of returning the Operating Balance Before Gains and Losses (OBEGAL) to surplus, from deficit, by 2024/25 and to retain current settings for allowances for new operating spending, should see a net reduction in public demand, helping cool inflation and reducing the need for the Reserve Bank to continue raising interest rates.

https://www.interest.co.nz/public-policy/118893/government-financial-support-economic-demand-tailing-leading-reducing-demand

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