May 24 2023

OCR lifted to 5.5%

Reserve Bank governor Adrian Orr (Photo: Hagen Hopkins/Getty Images)

The official cash rate has risen by 25 basis points to 5.5%.

In a statement, the Monetary Policy Committee said it agreed that the level of interest rates were constraining spending and inflation pressure. The Committee cited weak global economic growth and the easing of inflationary pressures.

It anticipates OCR cuts from the third quarter of 2024, saying the OCR will need to remain at a restrictive level for the foreseeable future, to ensure that consumer price inflation returns to the 1% to 3% annual target range, while supporting maximum sustainable employment.

In New Zealand, the committee said inflation is expected to continue to decline from its peak and with it, measures of inflation expectations. However, core inflation pressures will remain until capacity constraints ease further. While employment is above its maximum sustainable level, there are now signs of labour shortages easing and vacancies declining.

Consumer spending growth has eased and residential construction activity has declined, while house prices have returned to more sustainable levels. More generally it said, businesses are reporting slower demand for their goods and services. Businesses report that a lack of demand, rather than labour shortages, is now the main constraint on activity.

It also said broader government spending is anticipated to decline in inflation-adjusted terms and in proportion to GDP and the repair and rebuild after recent severe weather events will support economic activity. The timing of this predominantly government investment will be spread over several years.

The committee said it was confident that with interest rates remaining at a restrictive level for some time, consumer price inflation will return to within its target range.

The committee did discuss holding the OCR at 5.25% but took a vote and by a majority of five votes to two, agreed to raise it.

Reserve Bank governor Adrian Orr will hold a press conference at 3pm.


The official cash rate (OCR) from 1999 to May 2023
Source: Reserve Bank of New Zealand

Hundreds of job losses possible at Victoria University of Wellington

Victoria University of Wellington (Photo: Michael Bradley/Getty Images)

Nic Smith, vice-chancellor of Te Herenga Waka – Victoria University of Wellington, told staff this morning that between 230-260 FTE jobs could be lost at the institution, to address a $33m deficit.

The cuts would include the loss of up to 100 academic staff, around 10% of a total of 1,100 people involved in teaching and research across nine faculties. 150 professional staff could also be cut – people who work in areas like admissions, administration and human resources to make the university run.

The job losses could result in several programmes closing. Proposed job cuts in 2018, for example, led to restructuring the programme in art history and shuffling classics to another school.

Enrolment numbers at the university have fallen in the past year, with Stuff’s analysis showing there are 12% fewer students than a year ago.

Smith said that the job losses would be decided over a period of consultation, beginning in late June, according to Newstalk ZB’s reporting.

With low unemployment rates and a slow recovery of international students, low student enrolments have led to proposed cuts across New Zealand’s university sector. Last September, AUT said that it was intending to remove 170 academic jobs; it met with significant resistance from the Tertiary Education Union.

Massey University announced last month that it would remove 178 university jobs, while creating 144 new ones.

In April, Otago University has proposed cutting several hundred academic and professional jobs to reduce the annual budget by $60m.

Last week’s budget included funding for the tertiary sector, including funding for thousands of extra FTE students over the next two years, $220m for Te Pukenga to integrate IT systems, and $521m for supporting tertiary institutions over the next four years.

Was Narendra Modi happier to meet Guy Sebastian than Chris Hipkins?


Prime minister Chris Hipkins said he enjoyed a “warm and engaging” meeting with India’s Narendra Modi during his brief visit to Papua New Guinea.

But photos shared to social media show a Modi that looks to have found a lot of warmth and engagement from former Australian Idol champ Guy Sebastian.

I’m being serious: the prime minister of India had a special meeting with Guy Sebastian. There are actual photos. As far as I am aware, these are not artificially generated (no wonky eyes can be found). This not a deep fake.

In an unintentionally very good tweet, Modi said: “Guy Sebastian is a remarkable singer and has unparalleled passion towards music. In addition, he is passionate about social service as well. I was glad to have interacted with him today.”

I’ll let you be the judge. Who is India’s prime minister happier to meet? Guy Sebastian (left) or Chris Hipkins (right).

Research shows that creative professionals still earning significantly less than others

A buzzing Civic Theatre (Photo: Dave Simpson/WireImage/Getty Images)

New research just released shows that New Zealand creative professionals’ income is just $37,000, compared to the median income of $61,800 for other salaried and wage earners.

The new research comes out of a partnership between Creative New Zealand and NZ On Air and was conducted by Kantar Public. It is the second time research of this nature has been undertaken and demonstrates there are still disparities for workers not between the creative sector and other industries, but within the sector itself.

The research also shows that 44% of creative professionals supplement their creative income with other work; the median income from creative pursuits alone is $19,500 a year. Additionally, it shows that female creative professionals earn significantly less than their male peers – $16,500 a year from creative income alone – a 32% disparity. Deaf or disabled artists earn on average $15,000 a year from creative income alone. The median hourly rate for creative professionals is only $25. 

“The research continues to paint a bleak picture of remuneration in some parts of the arts sector and the sustainability of creative careers,” said CNZ CEO Stephen Wainwright.Income growth is very low, and it continues to be a struggle for the majority of creative professionals to plan financially and to secure important loans such as mortgages.”

“71% of practitioners consider themselves part of the gig economy and of these four out of five say it’s difficult to predict how much they will earn,” says NZ on Air’s chief executive Cameron Harland.  “However, it is uplifting to see that 80% of creative professionals are committed to their work – so it’s positive for New Zealand’s cultural life to see that most artists intend to still be practicing in five years’ time.”

You can read the research in full here.

The Bulletin: Most ‘politically consequential rates decision of Adrian Orr’s tenure’?

Stuff’s Luke Malpass describes today’s offical cash rate announcement as the “most politically consequential rates decision of Adrian Orr’s tenure”. One of the key questions being asked is whether last week’s budget and the government’s fiscal track make it more difficult for the Reserve Bank (RBNZ) to do its job in getting inflation down?

Malpass writes that it is precisely the situation where the independence of the RBNZ is at its most important. “It’s Adrian Orr’s job to stand askance the political process, and where appropriate say ‘please stop’”, he writes. Most economists are picking a hike today with the budget and, as covered yesterday, migration figures making things more challenging than previously predicted for the RBNZ.

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‘Effective immediately’: Zoo Miami ends kiwi encounter after nationwide backlash

Paora at Zoo Miami in videos being shared online

An American zoo facing the wrath of all New Zealand has responded to reports it was mistreating a kiwi bird in its care.

As we reported yesterday afternoon, the Department of Conservation said it would be speaking with Zoo Miami after videos shared to social media showed people handling Paora, a young kiwi chick, under bright lights as part of a “Kiwi Encounter” tour.

In a statement to The Spinoff, zoo’s goodwill ambassador Ron Magill apologised for the “unintentional stress” caused by the video being shared online. “Please know that your concerns and those expressed by the community have been taken very seriously and as a result, effective immediately, the Kiwi Encounter will no longer be offered,” Magill said.

“Zoo Miami feels extremely privileged to be the first facility in the state of Florida to successfully hatch a kiwi as part of a partnership with the Smithsonian National Zoo.  We are happy to have watched him grow and thrive under our care and are committed to providing him with the best environment possible while respecting and honoring all that he represents.  He is presently doing well and in excellent health.  We are presently in the design phase of a new habitat that will address all that he needs.”

Fronting for Newshub’s AM, Magill said the zoo was “profoundly sorry” and called the treatment of the kiwi “indefensible”

“I can tell you that we have listened… there will be no access to the kiwi by the public in that manner any longer.” The kiwi encounter usually lasted about five minutes, Magill said, and took place four times a week. “Again, that’s five minutes too long… it’s wrong and it will not ever happen again here and that’s a promise I can make to all of you.”

The zoo was open to “reviewing” all public animal encounters, including those with other “ambassador” animals like snakes.

Paora at Zoo Miami in videos being shared online

The zoo’s website later shared a full apology, saying the kiwi encounter was not “well conceived with regard to the national symbolism of this iconic animal and what it represents to the people of New Zealand, especially the Māori”.

It continued: “Having had the honor of hosting the Honorable New Zealand Ambassador to the United States and several representatives of the Māori people during a special naming ceremony here at Zoo Miami, it is especially painful to all of us to think that anything that has occurred with Paora here at Zoo Miami would be offensive to any of the wonderful people of New Zealand.  Again, we are deeply sorry.”