Three men looking sad about business confidence (Image: Getty Images).
Three men looking sad about business confidence (Image: Getty Images).

The BulletinJuly 4, 2019

The Bulletin: Where’s the economic confidence?

Three men looking sad about business confidence (Image: Getty Images).
Three men looking sad about business confidence (Image: Getty Images).

Good morning, and welcome to The Bulletin. In today’s edition: Complicated picture from economic confidence surveys, justice minister hammers Google over name suppression, and drinking water falling below standards.

Business confidence, which has been low throughout this government’s term, has plunged to fresh depths. In fact, as Stuff reports, the headline figure is the lowest it has been since the global financial crisis. As well as that, the more meaningful business confidence figure – what firms expect for their own prospects of expansion or contraction – fell to more than half of firms expecting to contract. Manufacturers are particularly pessimistic, though architects are more upbeat, which is generally a sign more construction activity is on the way.

And that highlights one of the major issues with relying on business confidence surveys for an idea of how the economy is going. The blunt headline figure alone doesn’t necessarily give the full picture. So for today’s Bulletin, we’ll look at some of the other recent confidence surveys to get closer to that bigger picture.

Rural confidence, for example, is negative but improving, reports the ODT. The sheep, beef, and horticulture sectors are seeing a lift in their outlook, with demand for meat rising. It’s partly for grim reasons, because the Chinese pork industry has been crippled by swine fever. Where pessimism exists, it’s largely because of government policy. An example of this is the Zero Carbon bill, which includes what farmers see as onerous methane targets, even though they were watered down during parliamentary negotiations. But to reduce the climate change targets further would be like trying to make an omelette without breaking any eggs – New Zealand’s future economic prosperity almost certainly rests on the world taking action on climate change.

A less frequently cited survey highlights another issue with these exercises – that good conditions for some will often mean bad conditions for others. That comes from the latest ASB Housing Confidence Survey, which was taken during a time when a capital gains tax might still have been introduced. A slight majority of those surveyed thought it would be a good time to buy a house, so correspondingly a bad time to sell. And a huge majority of the not-Auckland part of the country thought prices would rise, which is great for those who already own houses, not so much for those who don’t.

One of the most interesting surveys is consumer confidence, because that looks at how people feel about their own financial situation. The latest results are covered by BusinessDesk, who report that a majority of people feel better off now than they did a year ago. But the figure that really jumps out is that “a net 29 percent of consumers surveyed expect to be better off financially in a year’s time, up six points.” Part of that will be because of things like minimum wage rises which will affect hundreds of thousands of people, and handy payrises for people in major professions like nursing and teaching. But the figures are still pretty remarkable given that New Zealand is often at the mercy of conditions overseas, and that in general terms overseas isn’t looking too flash right now.

So what does it all add up to? A confusing picture, is the answer, and no one survey should be taken as the final word. And to be blunt, GDP growth is expected to slow quite a bit in future quarters, which will probably prompt the Reserve Bank to cut interest rates even further. But one thing that it highlights is that the economy is about more than just what business leaders think about it, and to properly understand how the economy is going for people a whole lot more factors need to be taken into consideration.

Justice minister Andrew Little is furious at Google for not making any changes after breaching name suppression in the Grace Millane case, reports The Spinoff. In an opinion piece, he has accused the internet giant of recklessness, and says he “will not accept that Google can avoid their obligations” as a company making money in New Zealand. He says “all options are on the table” as to how the government will take Google on.

Drinking water quality is falling below benchmarks in many centres around the country, reports the NZ Herald. It’s the medium and small water supplies that are falling behind, particularly around rates of potentially dangerous microbes. That can lead to outbreaks of disease, like the Havelock North gastro outbreak of 2016. Of course for context, the vast majority of people in New Zealand get drinking water that is clean and fresh.

The Taupō sewage spill has turned out much worse than initially thought, reports Radio NZ. Around 800,000 litres of wastewater hit the lake, and has started flowing into the Waikato River as well. It has led to pleas from the Council that people observe water restrictions, because no permanent solution has yet been found.

Wellington’s train woes have been described as close to a ‘once in a lifetime’ scenario, reports Stuff. However, those in charge say there are clearly issues with junctions around Wellington station, where a whole lot of lines merge. GWRC chairman Chris Laidlaw says the incident reflects decades on under-investment in rail from central government. Services have now returned to normal, which will please everyone who ended up stuck in traffic yesterday morning.

Auckland mayor Phil Goff has promised to slash public transport fares for children, reports One News. The policy is expected to add hundreds of thousands of public transport trips a year to the tally, and cost around $4 million a year. Goff says it’s part of a strategy to make public transport more affordable, accessible and more widely used.

So this is quite a cool story about kids at rural schools getting access to books, by Radio NZ’s Katie Doyle. Basically, two librarians in Taumarunui have created their own mobile libraries, which they truck out to Owhango and National Park each month, sometimes with specific books picked out to match the particular interests of a kid. And they say that with a bit of help, they’ll be able to expand it out to more schools. How good are librarians, eh?

Some feedback on one of the stories I described as positive yesterday. A different Alex wasn’t keen at all on the scientific breakthrough around methane producing microbes in cows, saying it was disturbing, not encouraging.

“Cows are sentient beings, not milk producing machines. Genetic engineering of another species for the benefit of human beings is a step too far. A more ethical way is to reduce the number of cows, which would benefit not only the welfare of the cows, but also the planet. For a viable future, human beings need to look outside themselves and stop meddling with nature, not intensify it.”

Certainly food for thought, and it’s a conversation worth having. As always, feedback is welcomed to

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Andrew Little: ‘I would be failing in my duty if, as a minister of justice in a small country, I threw in the towel’

Right now on The Spinoff: Mohan Dutta and Murdoch Stephens write about the swift sidelining of Muslim voices in the months since the Christchurch attacks. Don Rowe writes about the ludicrousness of an e-book platform shutting down, and everyone just losing their books. Anna Knox writes about artist Guy Ngan, often ignored in life but now being celebrated by the Dowse Gallery. Jonathan Boston discusses some ideas around how short-termism in government could be overcome.

And in other exciting news, we launched a brand new Arts section yesterday. Why? Co-editor Megan Dunn explains what it’s all about.

For a feature today, we’ll have a profile from Outside Magazine on someone with a bizarre job – high stakes cliff diving. 44 year old Colombian Orlando Duque has been leaping off high things since he was a teenager, and now takes on challenges of up to 88 feet – about 25 metres high. As you might imagine, it’s rather dangerous. So how does he manage? Here’s an excerpt:

After spending the past two decades competing in professional events, including the Red Bull Cliff Diving World Series, he’s become the face of the sport, racking up 13 world titles and two Guinness World Records, one of which he earned for scoring a perfect dive. But even after all that time at the peak of his sport, Duque admits his nerves are not totally made of steel.

“I still get a little scared before most jumps,” he says from San Miguel Island, off the coast of Portugal, where he competed in the Azores leg of the Cliff Diving World Series. “It’s inevitable. That fear, that bit of excitement. It’s one of the reasons why cliff divers do what we do.”

The Black Caps have done everything in their power to not qualify for the semis at the World Cup. However, it still might not be enough to avoid having to play more cricket, despite the dreadful 119 run loss against England. It’s the third defeat in a row, and leaves the team stranded in 4th place. Pakistan could still catch them, but it would require them to bat first and beat Bangladesh by a record margin. So with Pakistan, it’s possible, but Black Caps fans can probably book in another night of misery on Tuesday next week.

From our partners: A two-tier system of energy use is developing, with those on high incomes much more able to reduce their bills than households on lower incomes. Vector’s Chief Risk and Sustainability Officer Kate Beddoe outlines what the company plans to do about that.

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Mad Chapman, Editor
The Spinoff has covered the news that matters in 2021, most recently the delta outbreak. Help us continue this coverage, and so much more, by supporting The Spinoff Members.Madeleine Chapman, EditorJoin Members

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