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Craig Renney @clrenney.bsky.social · 13h

Overall, this cut signals how far we have fallen. Remember that we were supposed to have recovered by now and growth was supposed to have returned. It hasn’t, the policy mix of the government likely makes growth harder. Back on track? More like off the rails.

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Craig Renney @clrenney.bsky.social · 13h

There is also a risk that in the short run we will be driving higher inflation. A lower OCR means a lower NZ$. That likely means higher petrol prices and higher imported food, energy, and goods pricing. That will put further pressure on inflation- likely to breach 3% soon.

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Craig Renney @clrenney.bsky.social · 13h

We should be using fiscal policy to help manage the economic cycle - instead the government is determined to force the Reserve Bank to do all the work. That hinders our recovery and leads to unnecessary misery. Real people will suffer in communities around Aotearoa for this.

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Craig Renney @clrenney.bsky.social · 13h

That in turn means that it is likely to be a year before this cut creates any real new economic activity. So there is no relief for NZ in the short run. Job losses and ‘spare capacity’ will continue for some time. We should have cut earlier, as called for by the CTU

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Craig Renney @clrenney.bsky.social · 13h

We are only just now reaching the point where our interest rates are stimulatory (I.e below the neutral rate). That means the cuts to date have likely done little to stimulate growth. It takes about a year for an interest rate cut to translate to real world

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Craig Renney @clrenney.bsky.social · 13h

#nzpol The Reserve Bank has cut the official cash rate by 0.5%. That sounds great. But banks only cut interest rates that much when the economy is in trouble - and not when things are going well. This cut is a sign of economic weakness, not strength. A 😄🧵

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Craig Renney @clrenney.bsky.social · 1d

#nzpol Sometimes a policy is so stupid it makes you question the very fabric of reality. Decisions so fabulously, almost wantonly dumb, you wonder if we actually live in a simulation. Welcome to the world of removing Jobseeker Support for 18 & 19-year-olds. craigrenney.substack.com/p/a-small-wr...

A small wrinkle in the Jobseeker policy

The government’s recent changes to benefits feel like this: the house is on fire, and this policy is them turning off the smoke alarm and saying it’s fixed

craigrenney.substack.com

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Craig Renney @clrenney.bsky.social · 3d

This is a policy with no basis in any analysis. It's designed to look tough. It actually makes them look thoughtless and out of touch. It's arbitrary, mean, and simply designed to disguise the fact that the government is failing young people. Is this what being back on track feels like?

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Craig Renney @clrenney.bsky.social · 3d

The government has a target to reduce the number of people on jobseekers by 50k. I assume they have announced that they will not meet that target by simply reducing the number of people who can access jobseekers? Or will they cheat their way to a win, like child poverty statistics?

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Craig Renney @clrenney.bsky.social · 3d

Since the election, there are 37,243 fewer 15-19 year olds in filled jobs. The jobs market for young people is as bad - if not worse - than the GFC. So adding 6% to the cost of tuition fees and halving apprenticeship boost support makes life even harder. Brilliant work National.

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Craig Renney @clrenney.bsky.social · 3d

This creates frankly bonkers outcomes. If one parent works an hour less a week, their child gets $13,942. In fact, one parent can work 11 hours less a week and the household is still better off. Secondary benefits (like Accommodation Supplement) are likely to stretch that gap even further

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Craig Renney @clrenney.bsky.social · 3d

#nzpol The government has announced that 18/19 year olds, who live in a household where the parents earn $65,529 or more, can't claim jobseekers support. If both parents work 27 hours on the minimum wage - $634 a week - they will be expected to now financially support their adult offspring. A 🧵

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Craig Renney @clrenney.bsky.social · 3d

The Minister of Finance's reply to our letter, and further reporting, is here:

www.thepost.co.nz/nz-news/3608...

‘Not sound economics’: 20 economists slam government’s economic strategy

The signatories – including former Productivity Commission chair Ganesh Nana and economist Susan St John – say the Government’s fiscal approach has worsened the recession, weakened public services, an...

www.thepost.co.nz

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Craig Renney @clrenney.bsky.social · 3d

#nzpol 20 Economists have penned an open letter to the Prime Minister and Minister of Finance - asking for change. The contents and signatories to the letter are at: craigrenney.substack.com/p/open-lette...

Open Letter to Prime Minister and Minister of Finance

Our current economic approach is causing real harm. We need to change track

craigrenney.substack.com

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Craig Renney @clrenney.bsky.social · 4d

That’s a great question. One of the best ways would be government procurement. Working with social enterprises both encourages their development & great community outcomes. Govt can match any extra costs from using social enterprises against the savings they make from the extra services they provide

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Reposted by Craig Renney