Financial Armageddon!!

[Beano]

NZF Min wage goal $20ph Labour min wage 16.50ph .....so we can count on min wage increase, which you guessed it will add inflationary pressures...

Now we've had one of the biggest increases in inflation in NZ land to incomes in recent times 2009-2017 during a very flat deflationary period (unlike the early 2000's where we had inflation across the board with the reserve bank increasing lending rates 9% etc to combat it..

Like a perfect Storm its all coming together to make some very nasty times ahead ...

-Record High household Debt to income levels
-Low wage economy ...(we spent the money on more expessive land and not on core businesses.....but property speculation , investment rentals etc thats NZ #1 business>>>
-Record low lending rates for an extended period (that must be forced to re-adjust to stop dollar dropping to far)
-New pro Tax Govt ...Big spending
-Crashing NZD value
-Property values the vast majority of Kiwi's are ticked to the eyeballs in at Bubble highs>>10-20% correction ??


Really National keeped the whole game going by forcing the banks to continuing to lead easy money for new builds and open door immigration policy...Lab+NZF are going see how it works to close the door by least half and add a few extra taxes

= friends of my wife have just finished a ripping stunning 150sqm pad locally leaving them with over 700k in debt on one income which you guessed it comes is from the husband 45+ that works in the NZ property sector as stonemason ...with three young kids ....

Other friends also 40+ age 550k in new debt to average 3 bed home .. two average incomes but also tied to the local Property sector.

I'd say the vast bulk of new loans over the last couple of years will be much the same locally ...all get paid from the continued building boom
which they are also part of....

What happens when rates are forced to 6% then 7%???

With lower profitability. ..pay less tax !

[Wayne]

What happens when rates are forced to 6% then 7%???

Forced?
What will happen is what always happens - they will struggle or go broke.
Keeping the ponzi scheme going because people have jumped on at a bad time isn't a good reason.
People seem to agree that the problem with house prices is that there is a shortage (for various reasons that don't matter) but don't like the idea that sorting that shortage will flatten or drop house prices.

[Bluekiwi]

Winston will make Trump look good

[JBM]

Yes, what will happen will happen ....the little Kiwi dollar will be at the mercy of the international traders along with where rates will go...winnie going do his best to get them offside

[Nick G]

Well of course people have fixed rates for 3-5 years out into the future to lower their exposure, right?

Right?

[d2ba]

Winston will make Trump look good

i disagree Bluekiwi --consider this ---"a king that is kind to his people will rule forever"
the last king "National" was unkind to its people and they did not prevail --long live the new King

[Don't believe the Hype]

i disagree Bluekiwi --consider this ---"a king that is kind to his people will rule forever"
the last king "National" was unkind to its people and they did not prevail --long live the new King

not kind? Providing ample opportunities for employment, an economy that is humming outperforming most others globally. A place where anyone who wants a job can get one.

By kind do you mean not just hanging out bucket loads of cash?

[Davo36]

not kind? Providing ample opportunities for employment, an economy that is humming outperforming most others globally. A place where anyone who wants a job can get one.

That was the line they put forward, but it's not really the case. I'm a right wing voter but:

1) Governments don't provide opportunities for employment, private businesses do. Government just sets the scene.

2) Jobs: Casualisation of labour, so less than 40 hours for many people. As examples: wait staff working for 3 hours, then go home for a bit then come back for 2 hours. Bus drivers the same.

3) The jobs that are there are rubbish compared to what they used to be. It's all very low wage, low skill stuff. Which is hugely impacted by the high immigration rate.

4) I want to see NZ become an higher wage economy. Hard to see how importing 8 to 10,000 Indian and Chinese students (and that's each) is going to help with this.

5) Economy that is humming? Really? I think Perry's comments around this are important, in that it's all debt driven. It's also immigration driven. Short term policies to make things look good for the next few months. Who is thinking even 10 years ahead, that's what I want to know?

[d2ba]

not kind? Providing ample opportunities for employment, an economy that is humming outperforming most others globally. A place where anyone who wants a job can get one.

By kind do you mean not just hanging out bucket loads of cash?

--Heath system in crisis --underfunding
--Toxic culture at Winz
--Homelessness at crisis point after 9 years of last kingdoms reign

[d2ba]

That was the line they put forward, but it's not really the case. I'm a right wing voter but:

I was too but slowly turned left---a swing voter is what i would describe myself as

The last King kept fondly saying the economy was on the right track, but the truth is it has relied a great deal on a free hit from immigration and the fake prosperity of a housing market running on borrowed money. We have to do things better and differently. Now we get the chance.

[Don't believe the Hype]

4) I want to see NZ become an higher wage economy. Hard to see how importing 8 to 10,000 Indian and Chinese students (and that's each) is going to help with this

To become a high wage economy you need to be a high output and/or high value output economy. Frankly NZ is not capable of this. While there will be SOME who raise the bar the average Kiwi is too lazy or not trained. (Willing to train) to develop the skills necessary to become a high wage economy

Having worked in both India and China and with hundreds of their high achievers its sad to say they work harder and are prepared to do what it takes. It is possible to improve the output with Indian/Chinese immigrants but we need to encourage the high performers/achievers.

This will not be a popular opinion but it is the reality.

[Don't believe the Hype]

--Heath system in crisis --underfunding
--Toxic culture at Winz
--Homelessness at crisis point after 9 years of last kingdoms reign

Can't argue with healthcare underfunding but this is a global phenomenon it's not just NZ that is struggling to fund health care.

Toxic culture at WINZ - Don't you mean the expectation crisis of many who expect someone else to foot the bill for their existence? There is a huge number of folks in this country who are Nett recipients of funds (I.e receive more in benefits than they pay in tax).

[Wayne]

not kind? Providing ample opportunities for employment, an economy that is humming outperforming most others globally. A place where anyone who wants a job can get one.

Humming along - yes, immigration does that. Unfortunately the GDP per person didn't go up - the number of people did.
That then creates stress in other areas - like education (getting enough schools given the lead time), health, roads, houses.
It would be fine if the govt had thought it through and planned but they didn't - it just happened and they were left wanting.

Anyone can get a job - but what sort of a job?
My son works outside. $20/hr so not too bad. Unfortunately if it rains he doesn't work and doesn't get paid.
Some weeks 40hrs, some 24. How do you live like that.
Some have done well (I know I have) but the great economy isn't shared by all.

[Perry]

Some have done well (I know I have) but the great economy isn't shared by all.

I suspect that has always been and will always be the case. But - for now - what's the cause? What's the remedy?
A gummint General Wage Order (remember those and Muldoon?) doesn't lift productivity.
It just adds costs.

And I wonder if so-called income tax bracket creep will mean those working two jobs will see more of that extra (minimum wage) dosh go in tax?

[d2ba]

https://www.theguardian.com/world/2017/oct/25/new-zealand-to-ban-foreign-buyers-existing-homes-jacinda-ardern

New Zealand is planning to ban foreign buyers from purchasing existing homes in an attempt to tackle a housing crisis by halting a trend among the world’s wealthy to snap up property in the country.
The restrictions announced by the prime minister-designate, Jacinda Ardern, are likely to be closely watched by other countries around the world also facing housing shortages and price rises driven by foreign investors.
See the 855 comments below--interesting stuff!!!

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