Sunday, 15 January 2017

New Zealand's external debt position

A couple of weeks ago I re-tweeted a media release from Steven Joyce on New Zealand's 2016 economic growth numbers, which came in at a solid 3.5% p.a. driven by growth in transport (3.7%), construction (2.1%), business services (2%) and manufacturing (1.2%). One interesting tidbit caught my eye:
The Current Account deficit was unchanged at 2.9 per cent for the year, well below the long-run average. New Zealand’s external debt was 58 per cent of GDP, compared with 83.8 per cent of GDP back before the GFC in 2008.
This of course was immediately disputed - because it looks pretty good for the government. Here's what Statistics New Zealand has:

The important bit is that is the net position, not the gross position which is often quoted.

Tuesday, 27 December 2016

CentrePort dredging put on hold

CentrePort has put work for dredging Wellington's harbour on hold following November's earthquake. This appears to be because the business is now in some trouble due to a number of its property developments - such as the BNZ building and Statistics NZ building - either requiring demolition or serious remedial work. There's talk of the port requring a bail-out from ratepayers or taxpayers.

This isn't to be celebrated, but again it raises the question of the Regional Council's ownership of the port company, and the structure of New Zealand's seaports generally. We have a listed (and partially regional council-owned) port company, Port of Tauranga, taking more an more market share off other ports such as CentrePort through inland ports, strategic alliances (NorthPort and PrimePort) and a sharper understanding of the market than its competitors. The Ministry of Transport points to this trend accelerating as more 6,000+ TEU "megaships" start to visit New Zealand and the international shipping lines rationalise their services down to fewer port visits.

The sensible thing for the Regional Council to do would be float CentrePort. If that results in Port of Tauranga or another port operator taking a share, then so be it. We're heading to port consolidation anyway.

Sunday, 11 December 2016

Housing: it's supply

Residential housing consents 1970-2015
In launching his party's tax policy, Gareth Morgan claims that increasing the supply of new houses won't help. The above graph shows otherwise - we clearly aren't building as many houses as we did in the 1970s - and there are far more of us (New Zealand's population in 1973 was 2.9m) and we're not building enough houses.

Sunday, 4 December 2016

Whakatiki St SH2 intersection update

Back in August I launched a petition to the NZTA regarding the Whakatiki St intersection. I am still waiting on a response from NZTA on this... watch this space!

Tuesday, 15 November 2016

TPP without the United States is still worth it

Donald Trump's election to the US presidency has effectively scuttled any chance of the Trans-Pacific Partnership (TPP) agreement being ratified. Plenty of commentators and critics of the agreement have said that TPP is now effectively "dead".

In a way, declaring the agreement dead because the United States might not ratify it gives a great insight into the thinking of the critics of the agreement - TPP isn't all about the United States, and never was. Yet opposition to TPP has obsessively focused on the United States.

MFAT's TPP information demonstrates the market opportunities for New Zealand's exporters to the other members of the agreement. For example, exporters of value-added New Zealand wood products to Japan for example are in for a major windfall. That's not something we should walk away from. New Zealand depends on international trade for our prosperity.