The Kākā by Bernard Hickey

Long stories short, my top six news items in Aotearoa’s political economy around housing, climate and poverty on Monday, March 3 are:

* The first national housing market data for February show new listings falling as unsold stock levels hit their highest levels in nearly 10 years, indicating an extension of the great standoff between buyers and sellers in the engine room of the economy is depressing sales volumes and selling prices.

* One reason for the lack of fresh credit-fuelled demand is rental property investor demand is sliding as they’re wary of prices falling again and many are hitting their Debt To Income (DTI) multiple limits for new borrowing.

* An ongoing standoff between mostly unforced sellers who don’t want to sell for less than top dollar and buyers cautious about overpaying means house sales are stuck at less than half the levels needed to fire up growth in an economy that remains very much a housing-market-with-bits-tacked-on.

* The last time the housing market fired up an economy and dragged it out of recession was in 2009/10, back before the Reserve Bank applied both Loan to Value Ratio (LVR) limits and DTI limits and back when a National Government was deliberately stimulating the economy out of recession with debt-fuelled construction and other spending, rather than trying to tighten fiscal policy.

* Elsewhere, Foreign Affairs and Rail Minister Winston Peters met with Hyundai executives in South Korea on Friday to talk about building smaller ferries than the ones Hyundai started, before Finance Minister Nicola Willis cancelled them abruptly with a $500 million break fee (see Cartoon of the day below). RNZ

* A PSA survey of health workers taken in January and released this morning found widespread evidence of nurses working as receptionists after ‘back office cuts.’ NZ Herald, The Post-$$$

(There is more detail, analysis and links to documents below the paywall fold and in the video and podcast above for paying subscribers. If we get over 100 likes from paying subscribers we’ll open it up for public reading, listening and sharing, although we’d love it if you subscribed to support our ability to make this journalism public. Remember all students and teachers who sign up for the free version with their .ac.nz and .school.nz email accounts are automatically upgraded to the paid version for free. Also, here’s a couple of special offers: $3/month or $30/year for under 30s & $6.50/month or $65/year for over 65s who rent.)

Housing stock on sale at 10-year high & asking prices down

Houses are just not selling and now sellers are pulling back from the market, sensing an over-supply is depressing prices. Realestate.co.nz reported this morning there were 11,363 new listings in February, up 27.6% from January, but down 3.6% from February 2024 as the usual 40% increase for the autumnal open home season failed to show.

The total stock of listings was 35,712 in February, up 10.2% from January and the highest level since 2015.

The national average asking price fell to $851,090 in February, down 4.7% from February 2024 and down 2.0% from January.

“We’re used to seeing a rush of new listings as everyone gets back from the beach and into business as usual. This year it’s less dramatic than the 40% uplift we would usually see.

“With high stock levels, sellers are having to be more willing to negotiate.” Realestate.co.nz CEO Sarah Wood said in this morning’s report.

Realestate.co.nz estimates whether a market is a ‘buyers’ market or a ‘sellers’ market by measuring the amount of time it would take to sell all the stock on the market if the long term average of sales per month from 10 years of seasonally adjusted data was applied. It found the overall market was a ‘buyers’ market, just, while Auckland and Nelson Bays were now ‘sellers’ markets.

Market frozen in standoff as unforced sellers just pulling listings later

In reality, sellers who don’t get their preferred price are more likely to pull their home off the market and wait for prices to rise, depressing sales volumes, while forced sales such as relationship breakdowns and estate sales are the ones where the ‘clearing’ market price is found. As banks don’t force mortgagee sales unless in the most extreme circumstances, this reluctance to accept a lower price leads to a standoff.

That matters because slow real estate sales depress the economy overall, given each sale represents a burst of economic activity and cash circulation as chains of sales go through, movers spend money on renovations and refitting, and some use equity cash windfalls to build new homes, buy new cars and move on with their lives.

Our housing-market-with-bits-tacked-on-economy frozen

Our-housing-market-with-bits-tacked-on-economy doesn’t fire properly unless sales per month are firing at 8,000 to 10,000 sales per month, as happened through late 2020 and 2021, rather than the 4,000 to 6,000 seen from mid 2022 to early 2025.

Sales prices remain 10-15% below their late 2021 peaks, which many sellers are choosing not to accept if they don’t have to after many weeks of quiet open homes and ‘tell-em-they’re dreamin’ offers. The listings are then quietly taken off the market. The number of unsold listings withdrawn from the market has oscillated between 1,500/month to 4,000/month over the last year, peaking in May as listings put on in January, February and March are removed for the winter, interest.co.nz calculates.

DTIs holding back landlords from new credit splurge to power rebound

Many had hoped for a surge in activity in late 2024 and early 2025 after the Reserve Bank started cutting the official cash rate aggressively, but only a modest rise in new mortgage lending has limited the activity. That’s mostly because rental property investors, who are usually the swing factors in the market, are pulling back from buying as rents and selling prices stagnate or fall, and because many are now hitting the the Debt to Income (DTI) multiple limits applied by the Reserve Bank since July last year.

Rental property investors and mortgage brokers have reported in Tony Alexander’s recent monthly surveyes they are pulling back from the market, with selling intentions at record highs, net buying intentions near record lows, and intentions to buy new homes, build new homes or develop new homes near record lows.

Mortgage brokers reported rental property investors had been more interested in borrowing in late 2024, but many had realised they were hitting their DTI limits and were pulling back from the market, Tony Alexander reported in his February survey for Mortgages.co.nz

Alexander reported comments from unnamed mortgage brokers in the survey such as:

“A lot easier with better test rates. However we are starting to see DTI upper limit of 7 being tested. It won’t be long until this is a major factor.

“More applications are getting close to or over the DTI restrictions, so DTI’s will become more prevalent in 2025.” Mortgage broker in Tony Alexander survey for Mortgages.co.nz

Chart of the day: Chicken? Or Egg?

Cartoon of the day

Timeline-cleansing nature pic of the day

Ka kite ano

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

The podcast above of the weekly ‘Hoon’ webinar for paying subscribers on Thursday night features co-hosts Bernard Hickey & Peter Bale talking about the week’s news with regular and special guests, including:

* Robert Patman on the week in geopolitics, including Donald Trump’s wrecking of the post-WW II politicial landscape; and,

* Cathrine Dyer on the week in climate news, including what Joe Rogan gets wrong about climate change, how the transport lobby screws the scrum of energy and climate policy in Aotearoa, and the latest research from the seas around Antarctica.

* Edward Miller on electricity gentailer profits, dividends and investments, along with the Government’s discussions around re-opening Marsden Point as a refinery.

The Hoon’s podcast version above was recorded on Thursday night during a live webinar for over 200 paying subscribers and was produced and edited by Simon Josey.

The Hoon won the silver award for best current affairs podcast in this year’s New Zealand Podcast awards.

(This is a sampler for all free subscribers and anyone else who stumbles on it. Thanks to the support of paying subscribers here, we’re able to spread my public interest journalism here about housing affordability, climate change and poverty reduction other public venues. Join the community supporting and contributing to this work with your ideas, feedback and comments, and by subscribing in full.)

Ngā mihi nui.

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

Long stories short, the top six things that stood out to me in our political economy around housing, climate and poverty on Thursday, February 26:

* A crescendo of teacher, student and parent complaints is building over David Seymour’s cheap and nasty school lunch programme, with a cascade of ugly photos and reports of delays, allergy and halal failures, meal no-shows and evidence of nutrition-lite and small portion lunches hitting frontpages and facebook school community pages daily;

* This morning Newsroom reports the Ministry of Education has released details of the nationwide contract with Compass, showing it must fix the issues by term two or risk losing the contract;

* The first rule of modern focus-group and poll-driven politics is never alienate the soccer and netball ‘moms,’ with signs the mean-spirited and shoddily-designed programme is disrupting school life and bleeding into the daily lives and community pages of families up and down the motu;

* Seymour’s replacement of locally-run-and-owned lunch providers with a centralised and foreign-owned corporate, which was previously punished for breaching food contracts, appears to clash with National, NZ First and ACT’s avowed support for local small businesses;

* Seymour is currently acting PM with Christopher Luxon in Vietnam and Deputy PM Winston Peters in China, again reinforcing the impression Luxon has allowed an extremist tail to wag the dog in a National-led Government; and,

* Government-administered inflation is growing as a concern for voters, mortgage rate re-fixers and the Reserve Bank as two of the three Government-controlled electricity retailers signal double-digit price increases, and another council-run bus company is set to increase fares by 43% because of Government funding cuts.

(There is more detail, analysis and links to documents below the paywall fold and in the video and podcast above for paying subscribers. If we get over 100 likes from paying subscribers we’ll open it up for public reading, listening and sharing.)

‘Fix the shitty, late, not-delivered & ugly lunches. Or else.’

National was already behind Labour in the polls at the beginning of February, so the last thing PM Christopher Luxon needed was an eruption of protest from mums and teachers in the suburbs about disruption and ugliness in their schools to start term 1.

Day-in and day-out, the nation’s ‘soccer and netball moms’ have seen a cavalcade of headlines and social media outrage over Associate Education Minister David Seymour’s deliberately cheap and unpalatable school lunch programme, including the following in the last two days alone:

* Health news: 11 days of butter chicken: More problems with school lunches RNZ’s Louise Ternouth

* Politics news: 'How many days in a row can you eat this?' - Schools slash lunch orders RNZ’s John Gerritsen

* Education news: School lunch provider's boss says it's 'mission critical' to meet KPIs RNZ’s Checkpoint

* Housing deep-dive: ‘Joy and nourishment’ gone: The hidden impact of the new school lunch programme. David Seymour’s new school lunches are saving money, but others say it’s coming at a significant cost to some communities. Stuff’s Nadine Roberts

* Health news: Nutritionist finds list of issues with school lunch programme NZ Herald

* Education news: School lunch supplier sorry after delivery error leaves kids hungry Northern Advocate

* Politics news: Who says school lunches are good? No official record of lunch complaints?RNZ’s Phil Pennington

* Politics news: Seymour 'hasn't done his homework. He's just relied on laziness.’ Outrage over ‘halal friendly’ ham sandwiches' RNZ Maia Ingoe

Now Newsroom-Pro-$$$’s Fox Meyer is reporting this morning that the Ministry of Education has released a copy its contract with Compass showing it:

* includes a commitment to supply a diverse range of meals that are “palatable” and nutritious;

* an adherence to vegetarian and halal dietary requirements;

* a commitment to minimise food waste; and

* a responsibility to deliver these meals “on time and in full.”

A review of Compass’ performance is specified for term 2 if it can’t fix the issues quickly.

If Compass is found to be in breach of the requirements, the ministry may notify the company via written letter and the contract may be terminated if the matter is not resolved within 20 working days. The Ministry of Education confirmed that no such letter has been sent, as any potential breaches will be identified during the company’s first review in Term 2.

The ministry told Newsroom the School Lunch Collective – which Compass leads – was “100 percent committed to meeting all their agreed service levels, and our immediate focus is to work closely with the Collective to resolve any outstanding issues as quickly as possible”.

The contract was subsequently released by the Ministry of Education. Signed on October 18, it details Compass Group’s commitments and the process by which it could lose the contract if it failed to meet them.

A termination clause was included, which could be activated in three ways: for convenience – a short section, completely redacted – or if either the ministry or Compass breached the contract. From the ministry’s side, this meant failure to foot the bill.

For Compass to fail, the multi–million dollar international company would have to either fall apart or fail to meet its obligations in the contract. Those obligations were set out in Schedule 2, at the bottom of the services agreement. Newsroom Pro-$$$’s Fox Meyer

Costs blow out and potentially allergic meals investigated

Also, BusinessDesk-$$$’s Cecile Meier reported last week Compass had already received a $8.9 million top-up to the original $478 million contract over two years. Seymour set up the deal with Compass to save $109 million per year on the cost of the previous Labour Government’s Ka Ora Ka Ako: Health School Lunches programme. He had originally said the savings would be $130 million. They’re now down to barely $100 million.

BusinessDesk-$$$’s Cecile Meier also reported last week that Ministry for Primary Industries' (MPI) food safety unit was in the “very early stages” of investigating Compass after it had to recall 50 special dietary meals from schools in Christchurch that were mislabelled as allergy-free.

Today’s pick’ n’ mix of must-reads elsewhere

* Housing scoop: The real estate agent who ran a ‘dangerous’, illegal boarding house. A boarding house had naked wires hanging from the ceiling, exposed waterpipes, no central fire alarm and some tenants were told to move out without any reason. Stuff’s Edward Gay

* Political analysis: ‘He's at a very important juncture now’ - What the Luxon interview with Hosking revealed Stuff’s Glenn McConnell

* Health & poverty deep-dive: Inside the success of Mana Kids. Meet the nurses working towards equitable healthcare for tamariki. 'This work is definitely a priority for us and our populations. But is it a priority of the government?' The Spinoff’s Alice Webb Liddall

* Joblessness deep-dive: One position, 1,200 applications: A snapshot of New Zealand’s job market right now The Spinoff’s Gabi Lardies

* Cost of living explainer: What's behind the incoming power price rises? RNZ’s Morning Report

* Political analysis: Has violent crime really dropped for the first time since 2018?The source for the claim? A tweet. The Spinoff’s Alice Neville

Video of the day

Chart of the day

Substack essentials today

UN vote record of the day

Cartoon of the day

Timeline-cleansing nature pic

Ka kite ano

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

Long story short, I spoke to researcher and campaigner Kayli Taylor in the interview above about her ActionStation Aotearoa report into unmet need in dental care, which details the experiences of ten people unable to afford to go to a dentist, and just how damaging and debilitating it has been in their lives. The full report is available in PDF form below, as is the transcript of our discussion.

Taylor points out 44.9% of the wider population have unmet dental care needs, with much higher proportions among Māori, Pacifica, the disabled and 25-34 year olds. She argues for a dental care for all policy, which has been estimated to cost $1.1 billion per year, but deliver wider benefits of $5 billion to $10 billion per year.

In my view, the inclusion of dental care from the publicly-provided health system is an immediate opportunity to improve the lives and health of so many, often by making it easier for them to work and be involved in their communities. Politicians and voters looking for ways to invest in health and the wider productivity of Aotearoa should adopt dental care for all.

…feeling the confidence to smile is such a fundamental part of existing, of being happy, of feeling confident in yourself… Kayli Taylor

The interview

Bernard Hickey (00:23): What was the genesis of this report and how did you go about writing it? 42 pages, you've been busy.

Kayli Taylor (00:33): The report emerged as part of the Dental for All campaign housed under ActionStation Aotearoa, which is focusing on building a case for free universal, Te Tiriti-consistent oral health care in New Zealand. The report specifically explores 10 people's lived experiences of not accessing oral health care.

There are lots of stats and figures around not accessing oral health care and we wanted to kind of give a story and weight to those experiences and understand people's lived experiences. So the report contains 10 people's stories. I started chatting with people and gathering people who might be interested in speaking as part of the report about July last year and over several interviews with each person and lots of edits to make sure that the stories, which are told in first-person accounts, were reflective and representative of their experiences.

We got down to the final report which also has some analysis as part of it and identifies some common themes in the stories and also points to some potential solutions for the problem of dental inaccess in Aotearoa.

Bernard Hickey (01:57): Just before we look at some of the details and the experiences, just generally, what's the situation with dental care, and in particular, unmet need on dental care in Aotearoa at the moment?

Kayli Taylor (02:12) So almost half of New Zealanders have unmet need around dental care due to cost. So it's 44.9 % for the general population and then that number increases for Māori, Pacifica, disabled communities and also the 25 to 34 age group.

So that's nearly half of New Zealanders having unmet need, which I think, as I was going about writing this report and I was talking to like friends and family and sort of random people that I would talk to about my job to, people would share stories with me and some of them would be their stories and some of them would be their loved ones’ stories. This report has just 10 stories, but it hints at wider systemic issues that we have.

Bernard Hickey (02:59): You've chosen a title for the report. “I didn't want to smile.” That carries a load, that statement. It says a lot about people's confidence, their ability to be socially active and hints at some of the social and psychological pain, let alone the physical pain. Could you talk to me about where you heard that phrase and what you thought?

Kayli Taylor (03:32): I was just looking through the report because I can't remember who specifically said that quote. But there was a sense from the people that I spoke to of the shame that is associated with poor oral health. It's a very visible part of us —when we meet people, when we talk to people, when we apply for jobs, when we just interact in day to day life.

Smiling is such a core and fundamental part of us. Feeling the confidence to smile is such a fundamental part of existing, of being happy, of feeling confident in yourself. That quote kind of captured the hardest bits of the story and the kind of meatier, tougher things to work through, but also kind of points to the like overall challenges of the system and people's experiences with it: (The problem) of not being able to access the healthcare you need, especially in a country like Aotearoa, New Zealand that has the money to fund it and chooses not to. That quote captured the thrust of people's experiences around oral healthcare and the shame and stigma associated with not being able to access the healthcare that we all deserve.

Bernard Hickey (05:02): I'm keen for our listeners and readers to have a look at all of the 10 stories. I'm not going to go into all of them for this video. Just a couple struck me. Firstly, Anaru, who is a social worker who wanted to get back into work and contribute to the community. Can you tell us about how Anaru faced the issue of dental unmet need?

Kayli Taylor (05:46): Anaru went through a lot of different careers before returning to social work in his 40s at the University of Otago, had experiences in working in retail customer facing roles and also in commercial radio, and couldn't afford to access preventative care around maintaining like gum and oral health and struggled with gum disease.

The consequences of that gum disease for Anaru was that it meant that he knew that he wouldn't progress in his commercial radio career. That was something that he was really passionate about and really keen to pursue and just couldn't because he knew that in the world of commercial radio, having good teeth really matters.

One of my other participants, Ali, described it as like a ticket for success in some ways. So Anaru eventually went back to university in his 40s to study as a social worker at the University of Otago, and while in Dunedin was able to access the Dunedin Dental School, which is run as part of the training for dentists and so it's a little bit more affordable to go.

And it was the difference for Anaru about being able to afford it versus not afford it. Anaru talks about it in the report (which you can find online at dentalforall) — the impact that it had on his confidence, on his willingness to participate in society. In the report, he says:

‘If the dentist was free, I would have had a better quality of life. I experienced times in my life where I didn't want to smile in public. I would cover my mouth with my hand and I was constantly afraid of being judged. If I had been able to get the work I needed done when I needed it, it would have made a big difference in my life. I would have been able to avoid some of the more serious oral health issues I've faced.’

Which to me speaks to the importance of preventative care and also of making that preventative care accessible for everyone in New Zealand to be able to access. It's too expensive at the moment. We know this, but being able to access preventative care increases people's confidence in their quality of life.

Bernard Hickey (08:20): The sheer expense of it makes it very difficult. It would never occur to me to go into debt to get dental care, but this is an issue. Could you tell us about Aroha's story?

Kayli Taylor (08:31): Aroha shared a story about of going into debt to the Ministry of Social Development in order to pay for some dental treatment to be done. They were able to get the Ministry of Social Development (MSD) to pay for that. But then the way that Aroha repaid the debt, they repaid the dentist, rather than MSD.

And so MSD didn't recognize that the debt had been paid off and the dentist must have made more money off of this treatment. And then, Aroha was still in debt to MSD as a result of it, which they described as debt that they will take a lifetime to pay off. It's just not achievable for them to pay off that amount of debt in their life.

The idea of going into debt to pay for medical expenses feels like a very American concept, like a consequence of their privatized health system. But it's not. It's an experience that people in Aotearoa, New Zealand are having, which to me is insane, and speaks to the flaws of the privatized model that we have.

Bernard Hickey (09:59) So Action Station is a campaigning organisation. What are you campaigning for here?

Kayli Taylor (10:05): The Dental for All campaign, which sits inside Action Station Aotearoa, is calling for free, universal, Te Tiriti-consistent oral healthcare, which would mean that everyone in New Zealand could access the oral healthcare that they need and that they deserve to live a life that is joyful and has confidence and allows them to smile.

Bernard Hickey (10:31): How would this work? Would be some sort of state funded thing or state run thing. And how is this done elsewhere in the world? Because in New Zealand, we think it's normal that you have to pay for dental care, but it's not always the case elsewhere.

Kayli Taylor (10:50): There's lots of different model options. And the dental for all campaign is working on getting more information out there about what the different options are. This is one of three or four reports that we're working on. It's the second report to be released. So there'll be further reports to come that kind of delve deeper into the modelling and policy side of things, which I'm really excited to sink my teeth into.

A model could look similar to the way that we fund other aspects of the health system. There would obviously need to be within that some pretty critical reflection on how the current public health system is run and it's quite significantly underfunded. So it would obviously need to be a well funded and well resourced public health system.

And then the Te Tiriti component of it is a recognition that Te Tiriti o Waitangi is New Zealand's founding document and it has a vision for how the Crown and Māori and how Māori and non-Māori can exist in cooperation with each other. And we're doing some modelling with Māori oral health workers on what Tino Rangatirotanga models could look like of oral healthcare.

Kayli Taylor (12:17): We’re looking forward to delving deeper into those policy discussions and doing more research on what it would look like and how we can learn from other countries and what they've done and how we can learn from New Zealand's existing health system and improve that for a dental model.

Bernard Hickey (12:33): The would be people watching this, taxpayers who may have got brilliant teeth. Perhaps they grew up in an area that was fluoridated. Maybe their parents could afford to take them to the dentist. And they see good dental care as just part of cost of living, making sure you can keep your job and a reflection of the quality of your lifestyle choices.

And the people who need this care, who are in pain, well, that's their own fault and, well, we couldn't afford it anyway. So what do you do when you jump on NewstalkZB and Mike Hosking asks those questions?

Kayli Taylor (13:25): It's a great question and it's a valid concern in many ways. I mentioned that this is the second report that we've done. The first report was actually from a consultancy group in Wellington called FrankAdvice. And they did some modeling for us on what the economic, social and fiscal costs of the existing model are, and showed that the existing approach is really quite costly. There's a fiscal cost to it in terms of hospitalisation of people from not accessing preventative care.

One of my story-sharers, Moana, talks about this in the report as well. Moana's mum had abscesses in her mouth and couldn't afford to go to the dentist to deal with them and had to go into hospital. So that's just an example of people needing to access hospitalisation as a result of not having access to preventative care.

It's costing us as a nation to not have universal dental care. It's costing us in terms of hospitalization. It's costing us in terms of lost productivity. It's also the right thing to do, and it would alleviate suffering for people who, as the report speaks to, are in pain, both physical and emotional as a result of not having access to the healthcare they need.

It's easy to feel like that's a problem that other people experience, but it's not always that way. One of my story-sharers, Amber, recognises that she has relative privilege. Her parents sold a house and gave her money to pay off her student loan, but she'd already paid off some of her student loans.

She was also at the same time coincidentally having wisdom tooth pain. And so she was like, now this is it, I'm going to get my life sorted, I'm going to deal with the pain in my mouth that I've been having on and off for years. So she decided that she was going to get her wisdom teeth sorted.

Even though she'd been given this very generous amount of money, it was still not enough for her to afford the care that she needed and to get her wisdom teeth removed. So she had to take on extra work on the weekends and she had to change how she lived her life still to afford her dental treatment. And she was working seven days a week for months to afford dental treatment, even with the privilege of having the sum of money from her parents.

So I think it's easy to look at this problem and to think that it's not something that impacts working New Zealanders, but it is. The report shows that it is and that it's poor dental health and unmet need that is impacting all of us across Aotearoa.

Bernard Hickey (16:36): The FrankAdvice report suggested a total cost of between five and $11 billion per year. And we've seen research from Max Rashbrooke for the Association of Medical Specialists that to make oral health entirely free at the point of use would cost around $1.1 billion per year. So for every $1 you spend, you get back five to 10 dollars in societal benefits, let alone the other unable-to-measure benefits. How do you measure someone's pain waking up in the middle of the night, not able to sleep because you're in so much pain or, not being able to ask someone out, or get a job working in commercial radio. I would have thought radio wouldn't require great teeth, but I'm sure it…

Kayli Taylor (17:33): I know, but then you see the billboards and it matters…networking.

Bernard Hickey (17:34): I'm sure it does. In many ways, it is our most obvious indicator of class now, which is something that I don't remember, I'm old (57), so as a kid, when maybe everyone had the same bad teeth, or maybe we hadn't all been drinking Coke and eating lots of sugar for many years.

Some people, for example, Northland, are still having a fight about fluoridating their town water supply. So there's a real issue there.

Interview lightly edited for brevity and clarity.

It's costing us as a nation to not have universal dental care. It's costing us in terms of hospitalization. It's costing us in terms of lost productivity. It's also the right thing to do. Kayli Taylor

The full report

Ka kite ano

Bernard

PS: I’ve published this to all immediately for public reading, watching and sharing as part of our public interest journalism mission funded by paying subscribers. Join us as a paying subscriber to support more of this work covering Aotearoa’s political economy around housing, climate and poverty.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

Long stories short, the top six things that stood out to me in our political economy around housing, climate and poverty on Tuesday, February 25:

* The slump in housing land prices has gone on for three years and the Reserve Bank last week further lowered its forecast for house prices, meaning prices aren’t expected return to their December 2021 peak until mid-2028 at the earliest;

* That near-seven-year-long peak-to-trough-to-peak cycle would be double the 3.5 years that the housing market took after the 2008/09 Global Financial Crisis to recover to its pre-crisis peak, and this time around the market is restrained by LVRs and DTIs;

* Until now, owner-occupiers and rental property investors have taken a buy and hold strategy, expecting a rapid(ish) recovery to allow them to recover to peak levels and make gains and sales again;

* But seven years is a long time for most people to hold on without the liquidity moments needed to realise capital gains and move on with their lives and businesses, even without pressure from a bank, given 40% of borrowers are actually ahead on their payments and just 1.5% are behind;

* Listed retirement village companies are seen as crucial players in mobilising those capital gains and cash between generations, but their investor timeframes and bankers are much less patient and they may blink earlier and more; so,

* Ryman Healthcare’s decision announced yesterday to slash its retirement unit building rate from 940 this financial year to a combined 489 in the next two years, and to dump some of its landbank valued at $338 million back onto the market, is a key moment.

(There is more detail, analysis and links to documents below the paywall fold and in the video and podcast above for paying subscribers. If we get over 100 likes from paying subscribers we’ll open it up for public reading, listening and sharing.)

‘We can’t hold on any longer. We're selling.’

When should a willing residential home owner-occupier, landlord or bare land-owner sell? Once the price is back near or above CV? Once prices have recovered to their previous peaks? To the highest bidder? Even if it’s lower than expectations, lower than CV, or (heaven forbid) lower than the purchase price? To whoever bids, even if (hell’s-a-freezing-over) there’s nothing left after clearing the mortgage?

It depends, is the trite answer. Often the personal situation of the seller really matters, or the view of the bank if there has been a sustained default on interest payments, or the property is ‘under water’ with a valuation less than that of the mortgage. Forced sales such as mortgagee sales, estate sales or relationship breakdown sales are often the ones where the property gets to ‘clear’ at the true market price.

When the market is subdued, often it is only the forced sales that happen, and the rest of the market is in a state of suspended animation. Unlike in countries where banks are aggressive in forcing mortgagee sales, New Zealand banks tend to force sales as a last resort because they can make anyone with an income to pay the interest first. Typically, a seller will put a property on the market and wait for a bid at or near CV to avoid the pain of perceived or actual loss, especially when they’re not under any bank pressure. Right now, there is very little bank pressure for most. There were just 41 mortgagee sales in the December quarter of 2024, down from over 750 per quarter during the GFC.

Humans hate losing more than they love winning. When there has been a fall in prices, that often leads to a longer standoff. Buyers who feel they are in control and can afford to wait will also be reluctant to ‘overpay,’ especially if there is any prospect of further falls. No one wants to ‘catch a falling knife.’

That moment of recovery when prices are back over the previous peak is often an important one for sellers who aren’t under any pressure to sell. They can then sell, feeling comfortable they didn’t ‘lose’ anything. That means the length of time it takes for prices to recover to their peaks is important. The longer it takes, the longer it takes for volumes to get going again.

‘Show me my liquidity moment’

That ‘liquidity moment’ of a house sale often kick-starts a whole range of other spending by the seller, and can trigger a ‘chain’ of property sales. That’s why the volume of sales often picks up sharply when prices are rising to new peaks, which in turn generates all sorts of economic and social activity, including grandparents moving into retirement villages and freeing up cash for inheritances or deposits for kids and grandkids.

So the moment when retirees move out of their highly-valued suburban standalone homes into retirement village units is a key event in that process of starting the ‘chains’ and restarting the market overall. Obviously, most don’t want to sell for a perceived loss, so watching the sales of retirement units can be a useful leading indicator of a market turning. Most are happy to wait for a year or two, or even the three and half years they waited after the 2008/09 slump, with their lives on hold.

But seven years of waiting?

By now, house prices ‘should’ have recovered to their peak, if that peak-to-trough-to-peak cycle lasting 3.5 years from early 2008 to late 2011 was to be repeated. But the Reserve Bank’s lowering of house price inflation forecasts at its MPS last week (chart below) means that cycle could now last seven years, with the December 2021 peak not recovered until late 2028.

So how long is too long? When does the seller or owner finally capitulate? Three years? Seven years?

Ryman’s capitulation is a moment

Ryman Healthcare is an important player to watch because it is the largest retirement village operator and often the market leader. For much of the last five years it has also been among the top five dwelling unit builders, especially as it has operated an in-house model of development and building, rather than outsourcing to contractors and sub-contractors.

Yesterday Ryman Healthcare, under new management and under pressure from shareholders and bankers, pulled the plug on its in-house, fast-growth and long-pipeline approach to building retirement villages. It announced it had ‘paused’ planning new developments and would slash its build pipeline from 940 ing in the current financial year to between 489 and 575 units combined in the next two financial years of 2025/26 and 2026/27 (ie around 250 a year).

That was after quarterly sales of new units collapsed from 141 in the December quarter of 2023 to 95 in the June quarter of 2024, and then a projected 55 in the June quarter of 2025.

Ryman also announced an equity capital raising of $1 billion to repay debt and said it planned to return $500 million to shareholders over the next three to five years, partly by scaling back its housebuilding and getting residents to invest more, and partly by selling some of its landbank, which it has valued at $338 million. It warned in its presentation for shareholders (page 44) that it may have to slash that book value if it is forced to sell the land at a loss. Here’s how it described that risk (bolding mine):

Landbank WIP (Work In Progress): Pursuant to changes made in 1H25, the carrying value of development land will be assessed, which may result in impairment if a decision has been made to sell the property or if the latest feasibility does not support capitalised WIP.

Work remains ongoing and is yet to be finalised, both internally and with Ryman’s new auditor, and therefore, the need for any adjustments remains uncertain. Currently, Ryman estimates there is potential for downward adjustments to NTA of up to $300 million in aggregate in respect of the matters listed below:

Development land now classified as investment property and held at fair value (previously held at cost) plus capitalised WIP, which is subject to impairment testing relating to development plans.

Ryman may consider the sale of land which is currently held for potential future development opportunities. Any decision to hold these properties for resale or the sale of such landbank assets, or any other asset sale if it were to occur, may not be able to take place at or above the value at which the asset is currently recorded in Ryman’s accounts.

In that situation, Ryman may record an impairment or loss on sale which could have an adverse impact on Ryman’s financial position and performance in the future. Ryman presentation

This potential for a dumping of development land will be unsettling for those hoping to wait for the recovery, and increases the risk the great standoff continues.

‘We need the housing market to fire up again’

The Government is assuming the great standoff ends this year and needs it to end to fire up the economy again.

The longer this period of suspended animation in the housing market goes on, the lower the chances of another surge in the economy like those seen from 2002 to 2007 and from 2011 to 2017 as bank lending fired house prices ever higher.

This Interest chart shows just how suspended the animation is, with volumes down nearly two thirds from the 2021 peak and well below the 2002 to 2007 boom times.

A pick’ n’ mix six of further reading elsewhere

* Op-Ed in The Post-$$$ by Claire Achmad: Poverty stats show broken promises to children – what happens next is up to us. Children are invisible from the document that sets the scope for the Budget, the Government’s Budget Policy Statement.This has to change, quickly.

* Scoop in NZ Herald-$$$ by Thomas Coughlan: Govt mulls extending repeat prescriptions, doctors warn it may lead to ‘catastrophic’ GP shortages

* Administered inflation & infrastructure freeze: Tauranga cans waterfront walkway, projects 12.5% rates rise Bay of Plenty Times

* Analysis in NZ Herald-$$$ by Jenée Tibshraeny: What will become of Andrew Bayly’s ambitious reform agenda?

* Column in NZ Herald-$$$ by Simon Wilson: ‘Chris Bishop is ‘proud to be an urbanist’ and I’m thrilled to hear it’

* Scoop in NZ Herald-$$$ by Matt Nippert: US billionaire Peter Thiel winds down NZ business interests25 Feb 05:00 AM

Video of the day

Chart of the day

Cartoon of the day

Timeline-cleansing nature pic

Ka kite ano

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

Long story short, I interviewed Reserve Bank of New Zealand Chief Economist Paul Conway yesterday in the full video above about:

* the Monetary Policy Committee’s decision to cut the Official Cash Rate by 50 basis points to 3.75% last week;

* the bank’s projection in its Monetary Policy Statement (MPS) for three more 25 basis point cuts over the next six months or so;

* its forecasts for modest recovery in economic growth later in the year to start reducing unemployment, now that interest rates are lower and the benefits are flowing through in a lagged fashion to fixed mortgage borrowers rolling onto lower interest rates;

* the bank’s study in its MPS (Box B on page 18) of how different types of inflation are tracking, ranging from the most sensitive to OCR changes, through to the least sensitive, including prices administered by councils and the Government such as rates, fees, charges & fines; and,

* the risk that this administered inflation, which spiked up through 2024 as other inflation was easing, may turn into a more generalised rates & fees-to-general-prices spiral.

Conway said the bank was not seeing any evidence of that yet, but was watching it closely.

I also asked him if the bank was concerned that previous under-investment in infrastructure and shifts by both councils and Government to avoid taking on more debt by instead using congestion and water charges to service non-Government debt represented a type of one-off shock where capital costs were being included in consumer price inflation.

The Reserve Bank is directed not to consider capital costs or value in its targeting of consumer price inflation, which means, for example, that house prices and interest rates are not included in the Consumer Price Index.

Here’s the transcript of our conversation around administered price inflation:

Bernard Hickey: 12:30 I'm interested in the administered prices, particularly local government fees and charges, government fees and charges.

And I wonder whether some of that inflation we've seen is not what you'd call normal inflation in the prices of goods and services, which the Reserve Bank can focus on, but is actually a type of capital charge as governments catch up on previous under-investment in capital or look to shift the capital cost from government debt to maybe local government debt or private debt. And in effect, you're seeing some inflation and capital costs bleeding into the Consumer Price Inflation Index.

Now, the Reserve Bank … doesn't focus on capital costs or capital values. It doesn't respond to a big shift in prices of houses or stocks or anything. So is there a risk here that you're having to respond to a type of inflation which is a one-off shock, a structural shock, and which actually is not really consumer price inflation. It's capital inflation.

Paul Conway: 13:45 Yeah, I definitely think that's a thing. Rates is the clearest example of that. I live in Wellington. Rates have gone up significantly, even though house prices have fallen by a quarter.

There is a sense of councils catching up across the country and certainly here in Wellington. So rates are catching up just, given depreciation in the capital stock, in our case the pipes and associated infrastructure.

I think you sort of hit the nail on the head there when you said one-off. Ideally they are one-off. And if they are one-off, then that's a relative price shift going on for a particular reason.

Council sort of fell behind in terms of paying for depreciation and keeping the quality of capital where it needs to be. And we can debate whether or not that's ideal and they should have been sort of more on the button from day one.

But from a monetary policy perspective, as long as they do stay as one-off, then that's fine. They sort of have their effect on overall CPI. They pass through. They don't get incorporated into people's wage demands. So we're not getting people sort of overreaching on pay beyond productivity growth.

And they don't get incorporated into firms pricing decisions and sort of getting into that sort of price wage spiral. And we're not seeing any evidence of that, you know, thus far. Quite the opposite, really.

A year or two years ago when we had a serious inflation problem, inflation was sort of 6-7%, the committee was way less accommodating about those types of charges because in that environment, there's a chance that they do feed into that generalised price and wage pressure with inflation at 2.2%.

You know, where a negative output gap is significantly negative. So the productive capacity of the New Zealand economy is significantly above where the level of sort of aggregate demand in the economy is at the moment.

So it's not the sort of business environment in which firms will go, ‘my rates bill has gone up, therefore, I'm going to charge people more for my product’. And, off we go into a spiral.

The MPC, the Monetary Policy Committee, is increasingly confident that we're not in that sort of world. So those relative price shifts, they can pass through.

And that's normal. Of course, we remain very vigilant to the risk that they do bleed into more generalised inflation pressures. So we're not that relaxed.

Chapters

00:00 Monetary Policy Decisions and Economic Forecasts

07:09 Understanding Inflation Dynamics

16:02 Challenges in Economic Growth and Investment

21:04 Impact of Interest Rates on Mortgages

Ka kite ano

Bernard Hickey

This was published to all immediately as part of our public interest journalism mission.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

Long stories short, the top six things that stood out to me in our political economy around housing, climate and poverty on Monday, February 24:

* The Government is considering allowing the EQC to increase its levy tacked on to household insurance bills by around $400 per year or as much as 72%;

* Inexorable Government pressure downwards on education spending growth and the exodus of skilled workers overseas has increased this year’s teacher shortages to 1,150;

* Napier plans to close its library for two years to avoid borrowing, even though its debt is less than 40% of revenues and costs less than 2% of revenues to service;

* Two specialist health reporters, a dedicated Northland reporter and the last dedicated television economics reporter are losing their jobs in the latest media sector cuts;

* The AA and truckies are warning a delay in funding new bridges across the new City Rail Link in Auckland is set to create roading chaos for six years; and,

* Another example of immigration fraud has emerged, with eight Chinese men paying over $16,000 each for non-existent jobs cleaning up after Cyclone Gabrielle.

(There is more detail, analysis and links to documents below the paywall fold and in the video and podcast above for paying subscribers. If we get over 100 likes from paying subscribers we’ll open it up for public reading, listening and sharing.)

When the Government delivers a new cost of living shock

It’s not a tax increase and it’s not inflation coming from overseas or uncompetitive supermarkets, banks or insurers.

But it is another cost of living shock set to be delivered by a Government that pledged to do whatever it could to reduce the burden of inflation on households.

Jenee Tibshraeny reports for NZ Herald-$$$ this morning on the Government considering allowing the former EQC (now renamed the Natural Hazards Commission) to increase the average levy added to household insurance bills by around $400 a year and up to 72% or $948 a year, including GST.

Here’s the detail (bolding mine):

Treasury is consulting with a small group of stakeholders on whether to increase the Natural Hazards Insurance Levy, previously known as the EQC levy, which is tacked on to home insurance premiums.

It is also seeking feedback on increasing the amount of cover the Natural Hazards Commission (NHC) provides for residential buildings from $345,000 to $460,000 (including GST). The most its proposals could cost home owners is $948 a year (including GST), 72% more than the current maximum.

Cabinet is expected to decide on a path forward in July, and changes would be implemented from next year. Jenee Tibshraeny for NZ Herald-$$$

‘Just close the library to save money’

In another case of unnecessary austerity hitting key public services, Hawkes Bay Today reported on Saturday Napier City Council is proposing to shut the doors on its library for up to two years to try to keep the proposed rates increase for Napier ratepayers below 7.9%. Napier’s debt is just over 40% of revenue, when it has capacity to borrow up to 175% under its self-appointed debt limits. Its interest costs are less than 2% of revenues, when its self-appointed limit is 10%.

When the sinking lid starts hitting frontline services

The Ministry of Education is now projecting a shortage of 750 primary teachers and 500 secondary teachers this year, having last year projected a surplus of 1050 primary teachers and 61 secondary teachers, Newsroom’s Laura Walters reported on Friday, pointing to a ‘please explain’ letter from Education Minister Erica Stanford.

Further reading: Teacher shortage 'no surprise', head of secondary principals group says RNZ

Health, poverty and economics reporters cut

The latest job cuts at 1News and NZ Herald are set to significantly reduce coverage of health, economics and poverty in our poorest region. Health reporting specialists Nicole Bremner from 1News and Nicholas Jones from NZ Herald are leaving in the latest rounds of redundancies and resignations, alongside 1News’ long-time reporter for Northland, Helen Castles, as Shayne Currie reported on Saturday for NZ Herald-$$$. He also reported yesterday that Katie Bradford had resigned to take up a corporate role with Infrastructure NZ.

A pick’ n’ mix six of further reading elsewhere

* Scoop: ‘Disrespect for science’: Docs reveal how Govt pushed controversial changes to prestigious Marsden Fund NZ Herald-$$$’s Jamie Morton

* Deep-dive: Migrant workers’ Kiwi dream shattered. An operation across two continents, dodgy signatures, tens of thousands of dollars paid to an overseas agent and lingering debts ‒ all for a new life in NZ. Yet 100 days later, a group migrant women have lost everything. The Post-$$$’s Hanna McCallum

* Research: NZ road lobby's tobacco industry-like tactics exposed in study RNZ’s Maia Ingoe

* Scoop: Iwi bid to challenge supermarket duopoly may have run out of steam. British supermarket giant Iceland is understood to be no longer working with Waikato Tainui on a new national rival to Foodstuffs and Woolworths. The Post-$$$’s Tom Pullar-Strecker

* Deep-dive: Who says school lunches are good? RNZ’s Phil Pennington

* Op-Ed: Who is influencing New Zealand’s most influential? Dr Rod Carr questions the decline of expertise - and the rise of denial and deliberate undermining of facts and evidence. The Post-$$$

Videos of the day

When smaller is better

Lynn and I like watching Never Too Small, a YouTube channel with highlights interesting small apartments all around the world. It’s a guilty pleasure. A bit like watching those real estate shows with big, fancy houses, except we fancy the small ones.

Last night we watched one about an apartment in Nightingale Preston, a not-for-profit project in Melbourne. We immediately wanted to migrate.

I know a bit about the Nightingale way of doing things. In 2023, I interviewed Liam Wallis for When The Facts Change. He helped design, fund and build the first Nightingale project in Melbourne’s Brunswick. These apartments are designed from the start to be carbon neutral, healthier, and cheaper places to heat.

And of course, when we saw the apartment was in Preston, we thought of one of our favourite songs:

Chart of the day

Busting some myths

Substack essentials today

Cartoons of the day

Timeline-cleansing nature pic

Ka kite ano

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

(My apologies. The version sent earlier this morning had the audio of last week’s podcast attached. It was good, but not that good. I have now updated with this week’s podcast. This is my error and please accept my apologies.)

The podcast above of the weekly ‘Hoon’ webinar for paying subscribers on Thursday night features co-hosts Bernard Hickey & Peter Bale talking about the week’s news with regular and special guests, including:

* Robert Patman, Helen Clark and Elaine Monaghan on the week in geopolitics, including Donald Trump’s wrecking of the post-WW II politicial landscape; and,

* Cathrine Dyer on the week in climate news, including news of polar ice coverage falling to historic lows, NZ First trying to force banks to lend to coal miners, petrol stations and farmers, and Fonterra paying farmers extra to reduce emissions intensity.

The Hoon’s podcast version above was recorded on Thursday night during a live webinar for over 200 paying subscribers and was produced and edited by Simon Josey.

The link to the video above was added after the email was sent to all subscribers.

This Donald Trump post was a subject of the discussion.

The Hoon won the silver award for best current affairs podcast in this year’s New Zealand Podcast awards.

(This is a sampler for all free subscribers and anyone else who stumbles on it. Thanks to the support of paying subscribers here, we’re able to spread my public interest journalism here about housing affordability, climate change and poverty reduction other public venues. Join the community supporting and contributing to this work with your ideas, feedback and comments, and by subscribing in full.)

Ngā mihi nui.

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

Long story short, I spoke to Core Logic Head of Research Nick Goodall & Real Estate Institute of New Zealand (REINZ) CEO Jen Baird for a 15 minute mini-Hoon last night after the Reserve Bank of New Zealand announced it had cut the Official Cash Rate 50 bps to 3.75% and projected another 75 bps of cuts this year. We also spoke in the video and podcast above about the REINZ's January sales data showing another slight fall in house prices with a rise in sales volumes.

In essence, we agreed the as-expected rate cut and the RBNZ’s acceleration of three projected rate cuts in yesterday’s projections would improve sentiment in the housing market, but that the RBNZ’s Debt To Income (DTI) multiple limit of seven for rental property investors was starting to kick in and would limit any explosiveness of housing and economic activity. Also, housing market data shows the long standoff between over-optimistic and not-pressured sellers vs cautious and stretched buyers remains, dampening volumes and leading many to list, and then pull their homes off the market.

The key things to know from the RBNZ decision, its Monetary Policy Statement (MPS) and its news conference were:

* RBNZ Governor Adrian Orr indicated in the news conference there would be three more cuts of 25 basis points each of the three next decisions in April, May and July;

* The RBNZ also projected a marginally higher GDP track than in the November MPS, a slightly higher inflation track, a higher unemployment track, lower business investment, lower migration, less contractionary Government spending and taxation and lower house price inflation;

* The RBNZ doesn’t expect longer-term fixed mortgage rates to fall much further because the global bond yields these fixed rates are mostly priced from remain elevated because of fears about Donald Trump’s tariffs sparking resurgence of inflation globally;

* RBNZ Assistant Governor Karen Silk said: ““I would say the expectation of the longer-term rates coming substantially lower is probably a lot less now. That depends on the funding costs for banks and that’s again being influenced by what’s going on in those global rates.”

* She said the lagged effect of borrowers moving off their older higher fixed rates would see the average mortgage rate paid to fall just 50 basis to 5.7% by December from 6.2% now; and,

* Orr said the bank’s DTI limits “will act as a good moderation for lending behaviours,” this year as mortgage rates fall.

Here’s the key detail, charts & video from the RBNZ decision and news conference in Wellington, which I attended, along with the key detail from the REINZ data yesterday:

What happened in the housing market in January

REINZ’s data for January showed a slight rise in volumes, a fall in median prices and a lower House Price Index in January than in December. Here’s more detail:

Sellers increased their listings, but often remained wedded to expectations of higher prices reached in 2021 and 2022.

Ka kite ano

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

After seeing yet-more-months of political debate and policy decisions to ‘go for growth’ by pulling the same old cheap migration and cheap tourism levers without nearly-enough infrastructure, or any attempt to address the same old lack of globally conventional tax incentives for investment, I thought it would be worth issuing a challenge to the opponents of tax reform in the form of an open letter, which can be read, listened to and shared publicly because I’ve taken the paywall off this one immediately.

‘Dear New Zealanders, your victory is pyrrhic’

Dear home-owning older voter,

You have successfully blocked the taxation of capital gains on leveraged residential land values for nearly 15 years and now both major political parties are so afraid of you doing it again they won’t even talk about changing the core nature of our political economy, which is now a broken, unhealthy, expensive housing market with starved public services and a stagnant real economy tacked on.

So now…

What.

Is.

The.

Point.

What's the point of 'winning' and keeping those capital gains if your kids have to migrate to be able to afford a family, and will raise your grandkids there, rather than here?

What’s the point of living in a million dollar asset with maybe a few others rented out or just sitting empty elsewhere if it means you only get to see your grandkids a few times a year?

What’s the point of feeling rich and believing everyone can (or should) get on the ladder under your own steam like you did, when we all know we’re way past that point, and your kids know it because they often have to ask for help with house deposits, loan repayments and free rent?

What’s the point of pretending that this ‘housing-market-with-bits-tacked-on’ way of running our economy and society works for everyone and can be sustained with economic growth if it means most of the kids you see on the streets are living here in poverty because:

* their parents can barely afford the rent you charge them and can’t afford to leave; or,

* they’re still living here because their parents are waiting for residency so they can get in to Australia through the back door; or,

* they’re living here because their parents prefer to live in a New Zealand-style of poverty, rather than the one they grew up in India, the Philippines or China, without the nice views, the free(ish) healthcare and education systems and the NZ Superannuation for everyone at 65?

What’s the point of raking over the same old stale arguments about everyone-being-able-to-get-on-the-ladder-if-only-they-just-tried-a-bit-harder when the economic and social results of the last 30 years have shown it just does not work?

Who do you think you are still kidding?

Who do you think still believes this situation is sustainable?

The economy?

We’re now into a third year of a per-capita GDP recession because we:

* haven’t invested enough in infrastructure for transport, housing, water, health and education to cope with the last decade’s strong population growth, which we decided we needed to keep the seams from bursting and the wheels of GDP rolling (because we know they’re so rickety they may be hard to start rolling again if they stop);

* have decided (again) that starving public infrastructure of investment and staff is the best way to keep public debt and deficits low enough to afford more income tax cuts, which are needed to grow the disposable income so crucial for the banks’ lenders when they make decisions about how much leverage to pump into limited amounts of residential zoned land; and,

* have chosen to replace locally-trained expensive workers with migrants with temporary visas, who we don’t need to train, keep healthy, educate or pay well, and we can exploit to lower our costs and avoid investing in our businesses.

The rest of us?

You’re not even kidding your own kids any more. They are voting with their feet at a rate of 200 a day, mostly to Australia, which does:

* invest in infrastructure;

* has kept strong unions and protects higher wages with legislation;

* grew its productivity and those wages by forcing its workers to save and invest; and

* is now encouraging and helping its local state governments to invest.

Or just yourselves?

Do you still believe it’s working for you and the rest of us in the long run?

If you say you do, then ask yourself one question in this poll

If you find yourself answering ‘yes, they left me here’, then you know what to do.

So what should those home-owners left behind do?

Vote for a party advocating some form of capital gains or wealth tax and some sort of incentive to save and invest in real businesses. Vote for a party that doesn’t believe in magical thinking and doesn’t tell you this current model will work, if only we:

* cut taxes more;

* cut public debt more by cutting public services via hospitals and schools and transport;

* bring in more low-wage migrants to bid up rents and push down wages; and,

* keep starving public investment in water, transport and housing networks to keep the debt low and to avoid flooding the unaffordable market for land with new supply.

Meanwhile, today’s six things in brief

Long stories short, the top six things in Aotearoa’s political economy around housing, climate and poverty on Wednesday, February 19 are:

* Today’s must-read is a first-person Op-Ed in the NZ Herald-$$$ from Sarah Elisaia, who qualified as a registered nurse in 2020 and now works in Australia (see more detail below and unpaywalled link here at NZNO.org);

* This electricity market Op-ed by Simon Bridges: ‘Unlock energy to unlock growth’ in NZ Herald-$$$ is interesting, given he says the Government should look at structurally separating the generator-retailers;

* The details in the scoop below about doctors turning away fat people to avoid putting them on waiting lists is an indicator of what happens when you set targets for numbers or people on waiting lists and time spent waiting;

* Tony Alexander’s survey of mortgage brokers published yesterday found that: “A strong net 54% of brokers have reported that banks are becoming more willing to advance funds,” and: “Investors getting ready to jump.”

* Chris Hipkins has suggested for the first time he could work with Winston Peters in a coalition, which would rule out a capital gains tax for another decade;

* There’s good news from Fonterra, which wants to pay its farmers extra to reduce their climate emissions.

(Usually, there is more detail, analysis and links to documents below the paywall fold and in the podcast above for paying subscribers. Normally, if we get over 100 likes from paying subscribers we’ll open it up for public reading, listening and sharing. I’ve taken an executive decision to open this up from start due to the public interest involved.)

Today’s must-read: Sarah’s plea from Australia

Here’s the detail in Sarah’s Op-Ed mentioned above and published in full here via NZNO.org (bolding mine);

After four years of study and 1100 clinical hours of unpaid placements, I began work as a registered nurse in February 2020. I was thrown into the deep end and braved the first year of my career through a global pandemic, serving my community and being labelled a “healthcare hero”.

Over the next three years, I saw up close the underfunding, undervaluing and the neglect of patients’ rights imposed by successive governments on the healthcare system.

For all the talk of heroes, our pleas for what seemed like bare-minimum resourcing constantly fell on deaf ears. I clocked out of most shifts exhausted, feeling guilt and anxiety for my patients.

The extreme budget cuts made by the coalition are the most recent acute flare of this chronic illness in the system.

Everything is on the chopping block. In 2022, the Association of Salaried Medical Specialists reported we needed 12,000 extra nurses to keep pace with Australia.

Yet at the heart of the present cuts is the claim that New Zealand has 3000 more nurses than it can afford in the budget. When asked if we need those 3000 nurses for the system to function properly, Health Commissioner Lester Levy couldn’t answer.

The answer is yes, those nurses and resources are desperately needed and people will die without them.

However, the prevailing logic of this Government is that the budget can somehow be detached from the resources needed to keep people alive and healthy. You can’t help but suspect it is setting the system up to fail on purpose.

Accompanying me at the strike was my 2-year old niece. I took photos of her carefully wrapping her tiny hands around a “safe staffing now” sign the same size as her.

In that moment I was overwhelmed with how each day was a missed opportunity to watch my niece grow and become her own person.

I spent each day of my trip home soaking up the joy of being around my favourite people in the entire world. I wasn’t prepared for how much grief and heartache was waiting for me once I returned to video calls instead of cuddles.

Back here in Australia, I’m constantly reminded that New Zealand nurses are internationally renowned and sought after for their dedication, skill and attitude. We’re trained to a high standard in our home country and then forced abroad to try to make a life and pay our bills.

I do wonder how many of us are yearning for home the way I am. If our Government treated nurses with respect by way of safe staffing, pay equity and workforce empowerment, how many of us would be booking the next flight home? How many families would be able to forge memories together instead of via FaceTime and WhatsApp?

It is both a great blessing and burden to be responsible for the lives and wellbeing of others. There are countless other career paths that are easier emotionally, spiritually, physically and financially.

Yet as a nurse, I feel it is our responsibility to believe in better for all of us, and that means to debunk the lie that we can’t fund the health system adequately. New Zealand has accepted this lie for years and the truth is a measly three-hour flight away.

As business oriented as healthcare is becoming, the greatest cost on a balance sheet will always be someone’s life.

Act Party minister Brooke van Velden boldly put on record that when it came to government spending on Covid, “We completely blew out what the value of a life was” – insinuating there is money to save in lieu. It is ideology like this that is sending hordes of our young workers abroad and driving this acute phase of illness that threatens the entire nursing profession in New Zealand.

Nurses are trained and experienced in recognising a deteriorating patient. As a society, we’d be wise to start observing signs of deterioration too. What are the nurses saying? Sarah Elisaia

Further reading elsewhere

Scoop: GPs say Wellington Hospital rejecting patients based on BMI. Health NZ denies patients are being rejected solely on BMI, despite letters that list the blunt tool as the reason - with GPs fearing it’s a tactic to manage waiting lists. The Post-$$$’s Rachel Thomas

Climate news: ‘No cavalry coming’: The Auckland town facing relocation due to flood risk NZ Herald’s Bernard Orsman

Health deep-dive: Going private: Is it the answer to public health woes? RNZ’s Ruth Hill

Housing news: Social housing residents plead for stability in quake-prone complex RNZ’s Kate Green

Health news: Struggling Christchurch ED asks patients go elsewhere unless it's 'life-threatening'

Good news: Thousands of farmers to earn cash for their climate efforts RNZ’s Eloise Gibson

Good news: Extra payments for farmers who pursue lower carbon footprints. Both Fonterra and its largest customers, Mars and Nestlé, dangle extra payments for farmers to lower emissions and meet the latter companies’ stringent emissions targets. The Post-$$$’s Dita De Boni

Politics news: Hipkins keeps alive possibility of working with NZ First The Post-$$$’ Thomas Manch

Scoop: Money-laundering rule changes could land NZ on undesirable grey list NZ Herald-$$$ Matt Nippert

Migration exploitation news: Salon ordered to pay $230k to seven former migrant workers. One former employee ‒ a woman from Vietnam with limited English ‒ was paid $200 in cash for working 10-hour days, six days a week. She and the others were all sacked without justification by the owner of Amy’s Hair and Nail Design. The Post-$$$’s Hanna McCallum

Op-Ed Golden visa? More like lead balloon By Brent Burmester in Newsroom

Politics news Healthcare now Kiwi's second-biggest concern RNZ

Health news: Thousands fewer getting mental health care, new data shows RNZ

Health news: ‘Severe harm’: Doctors blast ‘inhumane’ funding squeeze for disability sector NZ Herald

Health analaysis: When overlaying fact in health systems with fiction morphs into embellishment Blog post by Ian Powell

Budget cuts: Dismayed by funding cuts to fight truancy ODT-$$$’s Mark John

Substack essential

Chart of the day:

Cartoon of the day: ‘Everyone must go.’ ‘Ok. Bye.’

Timeline-cleansing nature pic of the day

Kā kite ano

Bernard

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