Image of graph trending upwards with a basket of food near the top indicating rising food prices
Food prices were up 12.1% in the year to March 2023 – the highest annual rate of increase since 1989 (Image: Tina Tiller)

The BulletinApril 18, 2023

Recession tipped to be deeper and arrive earlier

Image of graph trending upwards with a basket of food near the top indicating rising food prices
Food prices were up 12.1% in the year to March 2023 – the highest annual rate of increase since 1989 (Image: Tina Tiller)

Described as sticky and intractible, economists now think inflation will bite for longer with GDP forecast to contract by 2%, writes Anna Rawhiti-Connell in this excerpt from The Bulletin, The Spinoff’s morning news round-up. To receive The Bulletin in full each weekday, sign up here.

 

Inflation expected to defy calls for spending restraint

You’ll note I’ve restrained myself from deploying a third “Orr” pun in as many months today. Not Duncan Greive though, who in his preview of what economists are expecting from the consumer price index (CPI) inflation data on Thursday, explains why New Zealand’s price rises continue to defy Orr’s hammer. Worth a click for the image alone. All signs point to the rate landing somewhere between 7% and 7.2% on Thursday. The last CPI update was in January where the rate of 7.2% was seen as an “encouraging sign” by ANZ economists as it was unchanged on the previous quarter. Crucially, the non-tradable inflation rate of 6.6% in January (also unchanged since the September quarter data) was seen as a sign that domestically-generated inflation was slowing. As Greive notes, the concern now is that domestic inflation may prove to be sticky at high levels.

The song we’re singing has changed — we’re not winning

In his column over the weekend, the Herald’s Liam Dann (paywalled) notes that non-retail spending — which includes travel — was up 11.4% in March compared to February and spending on hospitality was up 14.5%. The post-Covid party isn’t stopping. This morning a forecast from ASB economists is tipping New Zealand’s looming recession to be twice as deep as previously thought. ASB is predicting a 2% contraction to gross domestic product (GDP) by early 2024, which is double what the bank last forecast. The bank also forecasts that the country’s expected recession is likely to set in earlier. ASB’s chief economist says high-interest rates and inflation will continue to restrain consumer spending in the coming year, with homeowners feeling the strain and pain the most.

Thirty-year record broken on food prices 

Everyone has their own annoying food-price cracked record to spin and mine is currently the price of cauliflower. I last saw it a few weeks ago at $12.95 a head and have not looked again. Yesterday, Stats NZ released the food price index figures for March. Food prices were up 12.1% in the year to March 2023 – which is the highest annual rate of increase seen since 1989. Sadly I was old enough to own Markita’s Toy Soldiers on cassingle when prices were last increasing like this, but not old enough to truly appreciate cauliflower. Fruit and vegetables were up 22.2%, a slight decrease from the 23.1% recorded in February. Vegetables aren’t even the worst of it with Stats NZ spokesperson James Mitchell saying “increasing prices for barn or cage-raised eggs, potato chips, and 6-pack yoghurt were the largest drivers within grocery food.”

Research highlights link between government spending and inflation

As the Herald’s Thomas Coughlan reports, research from Treasury economists has highlighted the effect of government spending and low interest rates on New Zealand’s persistently high rate of inflation. The research does not represent the official view of the Treasury but the economists looked at spending and inflation data and created models to look at which parts of that inflation were driven by demand and which parts were driven by supply. The National party has been trying to argue that the government and the Reserve Bank went too far in stimulating the economy over the course of the pandemic, while the government has consistently pointed overseas to other economies experiencing high inflation. The research suggests the opposition may have a point.

Keep going!
Nurses on strike on July 12, 2018 in Auckland. (Photo: Hannah Peters/Getty Images)
Nurses on strike on July 12, 2018 in Auckland. (Photo: Hannah Peters/Getty Images)

The BulletinApril 17, 2023

Can immigration alone fix the nursing crisis?

Nurses on strike on July 12, 2018 in Auckland. (Photo: Hannah Peters/Getty Images)
Nurses on strike on July 12, 2018 in Auckland. (Photo: Hannah Peters/Getty Images)

As nurses protest over staff shortages, questions are being raised about the government’s ability to attract new overseas recruits, writes Catherine McGregor in this excerpt from The Bulletin, The Spinoff’s morning news round-up. To receive The Bulletin in full each weekday, sign up here.

Nurses make national plea for more staff

Sometimes it takes being confronted with specifics to really grasp the size and scale of a crisis like the ongoing one in nursing. So here’s a few data points from recent weeks. In Christchurch, the city hospital was short more than 100 nurses during a single day in late February. In Whangārei, it’s been revealed that during flu season last year the nursing shortage was so acute that hospital bosses appealed to the army for help. And a new Weekend Herald investigation found that hospital employees filed more than 23,000 formal reports of unsafe staffing levels in the past three years. One service in Porirua for people with severe intellectual disabilities recorded more than 1,000 incidents in a single year. For nurses who protested around the country on Saturday, numbers like those are just the tip of the iceberg. “Decades of poor planning, inadequate funding and outright neglect across successive governments have led us to a time of absolute crisis in terms of pay, staffing resources and morale across the nursing sector,” said Paul Goulter of the NZ Nurses Organisation (NZNO), the union behind the protests.

Is the ‘Green List’ making a dent in shortages?

While nurses have a number of demands, including better working conditions and higher pay, shortages loom over every aspect of the crisis in nursing, and in the healthcare sector as a whole. The NZNO says there’s a current need for between 4000 and 5000 more nurses, but thousands more workers are urgently required throughout the health system. Last week the government addressed that gap with the announcement of another 32 healthcare roles on the straight-to-residence “Green List” immigration pathway. Registered nurses were added to the list back in December, but it’s so far failed to lure many of them to New Zealand. Of the 162 nurses who had received resident visas by the end of February, only 19 of them applied from overseas – the rest were already working here under different visas. The tide may be turning, however. Last week health minister Ayesha Verrall said that in March alone almost 900 overseas nurses applied to register to work in New Zealand.

Bigger pay packets continue to lure nurses across the Tasman

One of the main challenges for recruiters is our larger, richer neighbour next door. Australia is suffering from a nursing shortage of its own, but higher wages mean it’s winning the staffing battle – not just among overseas immigrants, but also NZ-born nurses who’ve grown tired of waiting for our own system to improve. Nearly 5000 New Zealand nurses registered to work in Australia in the eight months to April 1, many of them drawn by short-term contracts in the outback that can pay two to three times what they earn in NZ. A Melbourne recruiter told RNZ short-term contracts on offer there “ranged from about $3500 to about $8000 Australian dollars a week, depending on factors including seniority, expertise and the length of the contract”. But outside of rural areas the pay gap is less stark. Since the pay equity boost, base rates for more experienced nurses are equal or higher than in some states of Australia, according to a NZ nursing recruiter.

The migrant tap gets turned back on

Elsewhere in the immigration system, numbers are on the rise. New Stats NZ data shows migration is now around pre-Covid levels, with a net gain of 52,000 migrants in the year ending February 2023. While inward migration has unsurprisingly skyrocketed since the opening of our borders in August, there’s also been a big jump in New Zealand citizens heading overseas. There was a net loss of 17,300 citizens in the year to March 1 – more than three times the average loss between 2015 and 2019.