Monday’s Pro email: Housing market warming up again
In the political economy, the Government is heading into the last Parliamentary sitting week of the year with a slightly warming economy at its back and an election year of politicking and spending announcements ahead of it.
There are some positive signs emerging from the economy, both at home and overseas.
A landslide win for Boris Johnson's 'Get Brexit Done' slogan in the British election on Saturday morning has restored some element of certainty to the Brexit situation in Europe. China suspended a tariff hike on US imports on Saturday and US officials said yesterday a fresh trade deal was done and dusted, except for the translations.
The British pound surged and the Kiwi dollar rose against the US dollar on Friday, in part as global investors were more confident about the future and returned with an appetite for riskier currencies such as ours.
Closer to home, Real Estate Institute figures released on Friday showed the housing market warming up through November, even in Auckland. Manufacturing sector figures released on Friday released via BusinessNZ/BNZ's PMI survey showed expansion in November, albeit at a slightly slower rate than October.
GDP figures due on Thursday are also expected to show growth in the December quarter running at an annual rate of over two percent, which was better than many were expecting in the winter. For now, the economy here and overseas has responded well to monetary policy easings and some news of Government investment.
Labour and New Zealand First also have control of the levers of Government for investment news announcements. Transport Minister Phil Twyford and Deputy Prime Minister Winston Peters announced on Friday the release of the Draft Rail Plan, which they said was linked to the introduction of the new The Land Transport (Rail) Legislation Bill in Parliament this week that would allow rail to be funded from the National Land Transport Fund and introduce track user charges. National is set to release its transport discussion document later today, which is expected to push for a move away from fuel taxes to road user charges, and for more road spending.
Also, Agriculture Minister Damien O'Connor and Fisheries Minister Stuart Nash released the Situation and Outlook report for the Primary Industries showing an expected rise in exports of over five percent over the next two years to almost $50 billion. Commerce Minister Kris Faafoi also announced this morning that the Government would allow early access to spectrum for 5G network development.
However, there are still big decisions to be made, potentially as early as this last cabinet meeting of the year later today. They include a potential combination of RNZ and TVNZ. Prime Minister Jacinda Ardern is expected to summarise her year and report back on that meeting after 4pm.
In business and investing news, Xero's chair stepped down for family reasons, Comvita appointed a new CEO and Z Energy's shares hit a five year low after it warned of lower profits because it could not force through petrol price increases.
In news overseas overnight, the COP25 Climate Change talks in Madrid ended with a compromise deal that would see countries come up with improved carbon reduction plans at a conference in Glasgow next year, but they could not agree on more urgent action recommended by scientists or on a carbon tax plan.
1. Housing market warming up again
Real Estate Institute sales volume and price figures for November were released on Friday and showed the housing markets heating up again right across the country, with even Auckland showing a 2.1 percent rise in prices in November from October.
Prices overall rose 1.4 percent across the country, with prices outside Auckland rising 0.8 percent, according to the House Price Index (see table below).
The fall in mortgage rates after the surprise 0.5 percent cut in the Official Cash Rate in August has helped, along with continued strong migration and inadequate new housing supply to cope with record-high population growth over the last five years, let alone the previous housing shortage.
Investors are also happier now the Capital Gains Tax is off the table, and they'll welcome bank capital changes that were not so tough on banks in the short term.
2. Two Cents' Worth: Banking on Time
Imagine if time was a currency, and you could trade all those hours for valuable services? asks this week's Two Cents' Worth podcast.
When you were at a loose end, you could spend some time on a hobby, or helping one of your neighbours out. You could then bank those hours and then when you were next in a situation where you were wishing for more hours in the day, there actually would be more hours in the day – because you'd banked them.
This idea is called timebanking. Read more or listen here to find out how it works…
3. Seymour hoping for a colleague
ACT leader David Seymour says he is hopeful he will no longer be a party of one, as his party’s polling modestly but noticeably improves in the face of his advocacy for firearms owners and free speech supporters.
Seymour says the political events of 2019 have played to his principles, with the Government’s ban on and buyback of semi-automatic weapons a “disaster” and its plans to regulate hate speech a concern.
The rural Kiwis so opposed to the gun ban are not his natural supporters, and Seymour confessed to some initial trepidation about taking on their cause – but says he had been vindicated by the problems with the buyback since.
You can read more here in Sam Sachdeva's piece on Newsroom Pro.
4.Len Cook on the 'no surprises' mantra
Ministers need to be properly informed, but not all surprises need to be forewarned, says former government statistician Len Cook in a comment piece on Newsroom Pro about the 'no surprises' policy, which he says was not generally known as a rule in 1999, but by 2005 was "an unchallenged mantra" - something he says was "an unfortunate shift".
Cook asks if we need a rethink on the need for bringing some principles "into a rule whose very looseness puts pressure on the constitutional boundary between Ministers and career public servants".
See the full comment piece here.
Outlook positive - The latest Situation and Outlook report for primary industries shows revenue up 3.3 per cent on the previous year, and forecast to reach a record $47. 9 billion for the year to June 2020. Meat and wool exports are forecast to reach $10.4b for the year ending June 2020 – 2.5 per cent higher than the previous year, and dairy export revenue forecast to rise 8.4 per cent to $19.6b. Annual seafood export earnings are expected to pass $2 billion for the first time.
Farewell to Snell - Running legend and three-times Olympic gold medallist Sir Peter Snell has died at the age of 80. Snell later reinvented himself, becoming associate professor and director of the Human Performance Center at University of Texas medical centre. He became a member of the American College of Sports Medicine and a well-published research scientist.
Translation milestone - Te reo Māori is now included in the Microsoft Translator application.
Company changes - Xero chair Graham Smith is to hand over the reins of board at the end of January and retire from the board in March (earlier than planned due to the health of close family members). Former Telstra chief executive David Thodey will take over as Xero chair from February. Meanwhile, Honey products maker Comvita has appointed former Methven chief executive David Banfield as CEO. Long-serving chair Neil Craig will hand over the chairmanship to Brett Hewlett when Banfield starts on January 20, and retire from the board in June. Long-serving Gentrack director James Docking has stepped down from the board and been replaced by Integrated Research's former chief executive Darc Rasmussen, effective immediately. Chief financial officer Tim Bluett – who joined the utilities software company last year – will leave at the end of January. And Ngai Tahu Holdings – the commercial arm of the South Island iwi – has appointed director Mike Pohio as its new chief executive. Pohio led Tainui Group Holdings for nine years.
Screen jobs - MSD will be funding 20 paid internships in the screen sector as part of a new partnership between the Ministry of Social Development and Auckland’s economic development agency Auckland Tourism, Events and Economic Development (ATEED). “There’s a wealth of innovative business activity happening with television and film projects and that means more jobs in all areas including the roles that provide support like scaffolders, caterers, electrical technicians, security guards, beauticians and hairdressers," said Minister of Social Development, Carmel Sepuloni, adding West Auckland is the region’s screen heartland and the huge growth in productions coming to Auckland will "create opportunities for more Westies and budding entrepreneurs".
Freeing up for 5G - Cabinet has approved the allocation of short-term rights to an unused portion of 3.5 GHz spectrum - the first spectrum band to be allocated for high speed 5G data services (about half of the 3.5 GHz band is currently unallocated). The short-term rights will run from mid-2020 to 31 October 2022. “Early access to this spectrum will allow the telecommunications industry to move forward in their development and deployment of 5G services now, rather than waiting until long-term rights are switched on in November 2022,” said Kris Faafoi. Long-term rights to 3.5 GHz spectrum are still on track to begin in November 2022 and details of this allocation will continue to be developed over the next two years.
Honouring - A minute’s silence will be observed at 2.11pm today in honour of the victims of the Whakaari-White Island eruption.
6. Coming up
Jacinda Ardern is expected to hold a post-Cabinet press conference
Health Select Committee receives briefings on annual reviews of the Health Promotion Agency and the Health and Disability Commissioner and considers the Mental Health and Wellbeing Commission Bill
Social Services and Community Select Committee reviews the New Zealand Superannuation and Veteran’s Pension Legislation Amendment Bill
(Detailed Select Committee schedules can be found here)
Parliament in session this week. Select committee submitters list can be found here and select committee schedules can be found here
ANZ AGM, 10:30 AM, Brisbane
Auditor-General releases annual central government audits report
Abortion Legislation Select Committee considers the Abortion Legislation Bill
(Detailed Select Committee schedules can be found here)
Stats NZ releases balance of payments and international investment position for the September 2019 quarter
Education and Workforce Select Committee receives briefings on annual reviews of the Education Review Office and Education Payroll Limited and considers the Education and Training Bill, the Education (Vocational Education and Training Reform) Amendment Bill and the Holidays (Bereavement Leave for Miscarriage) Amendment Bill (No 2)
Finance and Expenditure Select Committee reviews RBNZ’s Financial Stability Report and the Government’s new Budget Policy Statement, considers the Arms Legislation Bill and the Public Finance (Wellbeing) Amendment Bill and receives three petitions
Governance and Expenditure Select Committee receives briefings on annual reviews of Southern Response Earthquake Services Limited, the Office of the Clerk and Parliamentary Services and hears three petitions
Health Select Committee considers the Mental Health and Wellbeing Commission Bill
Social Services and Community Select Committee receives briefings on annual reviews of Te Papa Tongarewa, the Housing New Zealand Corporation and the Social Workers Registration Board and considers the Rates Rebate (Statutory Declarations) Amendment Bill
(Detailed Select Committee schedules can be found here)
The Parliamentary Press Gallery holds its annual Christmas Party in Parliament.
Stats NZ releases GDP figures for the September 2019 quarter
Parliamentary Commissioner for the Environment Simon Upton will release a report on the environmental impacts of tourism
Napier Port Holdings AGM, 10:30 AM, Napier
Enjoy the holidays!
Parliament will be in recess until February 11
The Treasury will release its four-yearly Long-term Fiscal Statement in March
Thomas Coughlan (Stuff) National eyes switch fuel taxes for car Road User Charges
Thomas Coughlan (Stuff) Axing fuel taxes shows National willing to play the long game
Steven Joyce (Stuff) Steven Joyce: We're spending more but have nothing to show for it
Susan Edmunds (Stuff) 'Pension' for kids could level income inequality between young and old
Glenn McConnell (Stuff): The future for volcano tourism in New Zealand
Amanda Cropp (Stuff): Three helicopter companies all unregistered for adventure activities
Martin van Beynen (Stuff):Whakaari/White Island boat tours generate $4.5m a year for iwi
Andrea Vance/Blair Ensor/Iain McGregor (Stuff) Investigation into Australia’s Kiwi deportation
Tony Wall/Hannah Martin (Stuff) Some rest homes are rejecting anti-psychotics in favour of person-centred care
BusinessDesk-paywalled: Business leaders quiz finance minister on capacity to spend $12b
RNZ: Auckland hospital bed shortage causing mental health 'crisis' - PSA
Mark Price (ODT): Blow to Queenstown Lakes bed tax plan
RNZ: MFAT confirms New Zealand as likely source of Samoa's measles epidemic
Chris Morris (ODT): Sale of council assets mooted
RNZ:Youngest ever CEO plans some TLC for disillusioned Te Papa staff
Bonnie Flaws (Stuff): Comvita appoints new chief executive after troubled year
NZ Herald: Xero chair to retire early as family's health comes first
Aimee Shaw (NZ Herald):Pernod Ricard doubles profit amid pending closure of its Tamaki bottling facility
Tony Alexander (Stuff): Here are the 12 factors you can blame for higher house prices than your parents paid
Gareth Vaughan (Interest): Good and bad news for Antonia Watson in Deloitte's ANZ NZ report
RNZ: Scrapped National Party projects to be considered for $12 billion infrastructure package
Andrea Fox (NZ Herald-paywalled):Real cost of Auckland port to ratepayers would be unveiled if cars went: Tauranga port boss
Susan Edmunds (Stuff): Summer heat hits property market around New Zealand
Greg Ninness (Interest): Housing market generally firmer in November with record prices in 10 regions
Herald Editorial (Paywalled) Editorial: Party time as recovering housing market boosts economic outlook
BusinessDesk-paywalled: Z Energy shares hit 5-yr low; rivals resist higher prices
BusinessDesk-paywalled:Genesis to keep third coal unit for back-up
Tom Pullar-Strecker (Stuff): Competition watchdog probed by MPs over $2.5m cost of petrol study
Brian Gaynor (Herald-Paywalled) A2 Milk CEO Jayne Hrdlicka's departure leaves many questions
Reuters: U.S.-China trade deal 'totally done,' will expand U.S. exports: Lighthizer
Reuters: China suspends planned tariffs scheduled for December 15 on some U.S. goods
Financial Times: China hit by biggest dollar bond default by state company in two decades
Financial Times:Fed plans to double repo market intervention to avoid cash crunch
Bloomberg : Grocery-Packing Robots Are Aiming For World Domination
Renew Economy: UNSW scientists say they have key to unlock low-cost green hydrogen
Bloomberg:Private Equity Spies Profit in India's Distress
The Detail, Newsroom's daily podcast co-production with RNZ advises how to talk to climate change deniers over Christmas dinner Read more and listen here. iPhone users can subscribe here and Android users can subscribe here
Bernard, Lynn and the Newsroom Pro team.
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