Health and statistics reasons for staying at level 2 for yonks, but…

“…it would take anywhere between 27 and 91 days of no new cases for there to be a 95% probability that the virus is gone from New Zealand”.

In practice it is getting increasingly difficult for the Government to justify staying at Covid-19 Alert level 2. Based on their current stance it could be another three weeks before they decide whether to change alert levels again, while daily we have been seeing no new cases for more than a week now, and we are down to just one (known) active case.

There are purely health reasons, based on statistics, for staying at level 2 for longer.

Siouxsie Wiles: Many want to go to alert level one right now. I get that. But we’d be fools to rush

There are several reasons why holding at alert level two for a little longer is the right thing to do. The main one is that a run of several days with no new cases doesn’t mean that there are no undetected active cases of Covid-19 out there. Recent modelling by Professor Nick Wilson and his colleagues at the University of Otago estimated it would take anywhere between 27 and 91 days of no new cases for there to be a 95% probability that the virus is gone from New Zealand.

The lower estimate was based on the assumption that most people showing symptoms would go and get tested. The higher estimate was based on fewer people getting tested. In other words, those estimates are the difference between shrugging of that runny nose as an allergy or going to get tested for Covid-19 just in case.

I get why so many people want to move to level one, I really do. These last few months have turned our lives and our economy upside down. Just as they have right around the globe. We’ve made big sacrifices and we feel we’ve earned it. But surely none of us wants to risk going back to alert level three. Alert level one will come. Let’s not squander what we’ve achieved.

That’s from an academic who presumably doesn’t have their job at risk.

But there is increasing pressure (with justification) for lowering the level for social reasons, for non-Covid health reasons, and particularly for economic and employment reasons.

More and more jobs are being lost (37.500 were lost in April), and when the 3 month wage subsidy runs out next month there are likely to be many more people who lose their jobs, and businesses who have to shut up shop.

As well as being devastating financially, that will impact on mental health and general health.

Health officials and academics with secure jobs and incomes may prefer to play ultra safe with Covid, but the rest of us have a lot of other things to consider and to be worried about.

The Government may be worried about what effect a second wave of Covid cases may have on their election chances.

They should also be worried about what effect a second wave of job losses and business failures might have, not just on their election chances, but also on the health of the country.

Ardern opted for ‘go hard go early’ after listening to friends overseas

New Zealand was lucky that Covid-19 had already made an impact in some countries before spreading here, and some lessons could be learned from what happened elsewhere.

Prime Minister Jacinda Ardern says she took advice from friends overseas before deciding to ‘go hard, go early’. So far this appears to have been a relatively successful strategy.

Stuff: Inside Jacinda Ardern’s coronavirus bubble: What’s on the PM’s mind during Covid-19 crisis

When friends overseas painted a bleak picture of the advancing pall of coronavirus, Prime Minister Jacinda Ardern listened.

“[They were] saying, ‘Go, just shut down, because here I am in lockdown with thousands of people dying. Just shut down’,” she tells Stuff‘s Coronavirus NZ podcast.

It helped make the decision to “go hard and go early”, to close New Zealand’s borders and enforce a lockdown.

By day (and into the night, too), Ardern is receiving counsel from scientists, senior officials and Cabinet colleagues.

But she’s also revealed how personal connections with people overseas have played a part in helping make up her mind about how to act against Covid-19.

One friend in Britain, a Kiwi, has been “really unwell” with the virus, and another has had to take over as caregiver for the floor of their apartment because they’re the only ones who aren’t sick.

“So it really does give you that sense of its very close proximity to everyone over there.”

A personal perspective can change the way you view things. That’s a good thing – people in power are at risk from getting too remote from ordinary lives.

This was also reported in Australia’s Daily Mail – New Zealand PM reveals how she switches off in her downtime – and why she imposed some of the world’s harshest coronavirus restrictions – which included this comparison:

a close up of a map

That’s a couple of days old and is cases, but our low death rate suggests that for now at least the quick and comprehensive lockdown has been relatively effective.

Newsroom have daily charts that show COvid-19 progress here – Covid-19 in NZ – Saturday’s numbers charted

That’s at the same time as the number of tests have increased.

So for now New Zealand is doing fairly well, but a lot now depends on how well we keep limiting the number of infections, and that will depend on how we ease out of our Level 4 lockdown, and if we virtually eliminate Covid-19 from New Zealand, how we manage people travelling here from overseas. Quarantines for all people arriving in the country were announced by Ardern on Thursday:

That’s why from midnight tonight every New Zealander boarding a flight to return home will be required to undergo quarantine or what we have called managed isolation in an approved facility for a minimum of 14 days.

I am also signalling that the requirement for 14 days of quarantine or managed self-isolation in a government-approved facility, will be a prerequisite for anyone entering the country in order to keep the virus out.

As an island nation we have a distinct advantage in our ability to eliminate the virus, but our borders are also our biggest risk.

The Government has gone harder earlier with border measures compared to other countries, but even one person slipping through the cracks and bringing the virus in can see an explosion in cases as we have observed with some of our bigger clusters.

The quarantining of returning New Zealanders will be a significant undertaking.

A network of up to 18 hotels will be used to implement this approach, of which one to two will be specifically set aside for those under strict quarantine conditions.

This could be required for some time – months at least – if it is going to stop Covid-19 from coming back into the country.

The other big task is getting business and jobs back up and running as soon and as safely as possible.

Level 4 has come with some heavy restrictions. That has required difficult decisions around services and businesses that can and cannot operate.

We need to give similar more detailed guidance on what life at Level 3 looks like, and we will do that next week. That will give us a window to iron out questions and issues, and make sure we’re as prepared as we can be when it comes time to move.

It is then my intention that on the 20th of April, two days before the lockdown is due to finish, Cabinet will make a decision on our next steps. That’s because we need to use the most up to date data that we have to make that decision.

I think that Ardern will more likely be talking to friends and people involved in business in New Zealand to get advice on this.

A month in lockdown will have had a big effect on many businesses, but most should survive and be able to get up and running as much as is possible in the current circumstances.

The travel and tourism sectors have been badly affected and there’s no quick fix for them no matter what we do here in New Zealand. Air travel, cruise ships and international tourism everywhere have been virtually stopped, and it could be a long time to build them back up.

Internal tourism may mitigate this to some extent if we quickly eliminate Covid-19 from New Zealand if Kiwis have holidays closer to home rather than traveling the world.

It’s hard to know how quickly other business sectors will get back into gear, and whether they can get back to previous levels of sales, services and trade.

Because of what is happening and may happen in other countries there may limits to the business recovery here that we can’t do anything about. We will just have to deal with that the best we can.

 

Shane Jones concedes insufficient jobs created by Provincial Growth Fund, ‘repurposing’ funds

The billion dollar a year Provincial Growth Fund was promoted by Minister of Regional Development Shane Jones as a way of creating jobs in regions where unemployment was high, but Jones now concedes that the scheme described by some as pork barrel politics and others a NZ First re-election slush fund has failed to deliver enough jobs.

Jones now concedes the PGF hasn’t created enough jobs, suggests “Provincial Growth Fund money is not going out the door through conventional projects” and is now looking at ‘repurposing’ PGF funds to try to save job losses rather than create new jobs.

When the PGF was launched in February 2018: Provincial Growth Fund open for business

The new $1 billion per annum Provincial Growth Fund has been officially launched in Gisborne today by Regional Economic Development Minister Shane Jones.

“As of today, the Provincial Growth Fund (PGF) is open for business and has the potential to make a real difference to the people of provincial New Zealand,” Mr Jones says.

“We are being bold and we are being ambitious because this Government is committed to ending the years of neglect.”

“The first of many projects the PGF will support will create more than 700 direct jobs, and 80 indirect jobs – an impressive start to what will be an exciting three years for our provinces.”

5 February 2019 (Stuff) – Shane Jones wants Provincial Growth Fund to get ‘nephs off the couch’

“The flash words that we assemble in our Cabinet papers have actually today put a pair of gumboots on,” Jones said.

“Prince Shane” Jones was here, with Prime Minister Jacinda Ardern and Employment Minister Willie Jackson, to revive his promise to get the “nephs off the couch”.

These “nephs” are more commonly known in policy circles as NEETs – young people not in employment, education, or training – and they have been a bugbear of governments for decades.

“We are not going to rely exclusively on our Filipino Catholic immigrants. We are going to do the bloody work ourselves,” he told the crowd to applause.

But by now questions were being asked about the number of jobs being created. Jones himself is a fan of using flash words, but his job creation claims were starting to look like little more than piss and wind.

Newsroom 18 April 2019: How an OIA laid bare the pork barrel shambles that is Shane Jones’ provincial growth fund

On 5 February, MBIE’s head of the Provincial Development Unit, Robert Pigou, was reported claiming that the Provincial Growth Fund “was on track to create 10,000 jobs” – in contrast to National’s claims that the fund had created only a handful of jobs to that point.

I assumed that MBIE had run an economic forecasting exercise to estimate the effects of their various initiatives, and I wanted to know whether their assumptions had stacked up. So I made a simple request:

“Please provide the workings underlying the job creation claims, along with any correspondence with Treasury relating to that modelling.”

On 26 February, Treasury advised me they had no information to provide as they had not provided any advice to MBIE.

…on 22 March, MBIE informed me that “the Ministry is due to publicly release a spreadsheet detailing the 10,000 jobs figure at www.growingregions.govt.nz, as such this part of the request has been withheld”.

On 8 April, the Ombudsman’s office pointed me to a release on MBIE’s website providing the figures.

Here is what MBIE did to produce the 10,000 jobs figure.

They took the number of jobs that every Provincial Growth Fund applicant promised in their grant application. They added those numbers. Then they added one job for every feasibility study the Provincial Growth Fund was undertaking – that’s because you have to hire somebody to do a feasibility study.

That’s it.

Newshub 13 June 2019 – Shane Jones dodges questions over jobs created under Provincial Growth Fund

A spokesperson from Jones’s office said on Thursday 900 jobs had been created to date, including 52.5 under the ‘One Billion Trees’ programme. But the spokesperson didn’t have the number of new full-time, long-term job statistics on hand.

Jones, the Regional Economic Minister, has insisted that more jobs will be created as the PGF continues throughout the year and as projects under the fund are rolled out.

Goldsmith said at select committee Jones’s office had revealed in February a total of 215 jobs had been created out of 36.5 percent of PGF projects, and only six of those jobs were counted as full-time, long-term jobs – the rest were short-term, fixed-term or contractor roles.

The document obtained by Newshub showed 137 of the 215 jobs were part-time of less than 30 hours a week, while 23 were listed as full-time. It said it wasn’t recorded whether the remaining 55 were full-time or part-time.

Newshub 7 December 2019 – Revealed: Provincial Growth Fund costing $484k per full-time job

It’s been more than two years of the coalition Government and the $3 billion PGF has created just 616 full-time jobs.

The Opposition says it’s spraying cash, costing hundreds of thousands of taxpayer dollars for each job created.

But the minister in charge – Regional Economic Development Minister Shane Jones – insists it’s about more than just jobs.

An answer to a written question from National Regional Development spokesperson Chris Bishop reveals 1922 people are employed by PGF projects – and of that, just 616 are full-time jobs.

So far, $297.4 million has been spent so far on PGF projects. That’s $484,000 per full-time job, excluding those part-time jobs.

Jones insists infrastructure projects like roads and rail will take years to build, however in the long-term they’ll create jobs and further investment and increase confidence in the regions.

Six-hundred is an important figure but over the life of the fund and when the long-term projects are stood up it’ll be many thousands more than that,” he says.

This week (Stuff 7 April 2020) – Shane Jones concedes Provincial Growth Fund hasn’t created enough jobs, promises a fix

Regional Economic Development Minister Shane Jones has conceded the Provincial Growth Fund should have created more jobs after an attack by a union boss.

“We’ve disappointed a lot of rural communities that thought the dough would flow much quicker into their communities,” Jones said.

“There are no nephs there are no shovels,” he said of the Waipapa roundabout in Northland. 

“A large focus must go less on capital and on about generating actual jobs,” Jones said. 

But it could be too late for that, in this Parliamentary term at least. The Covid-19 impact on the economy and businesses is likely to see a bit surge in unemployment.

There Government is already looking at ‘repurposing’ PGF funds: Work to repurpose PGF funds begins

The Provincial Development Unit is working through applications and projects to see where Provincial Growth Fund money can be repurposed for initiatives deemed more critical to fighting the economic impacts of the COVID-19 pandemic, Regional Economic Development Minister Shane Jones says.

“We need to be throwing everything we have at our disposal at keeping Kiwi businesses going, workers in jobs and regional economies afloat and viable. If Provincial Growth Fund money is not going out the door through conventional projects then it needs to be repurposed for other initiatives,” Shane Jones said.

That sounds like Jones is conceding that ‘conventional projects’ have largely been a failure and the PGF funds should be used now to reduce job losses rather than create new jobs.

 

 

 

Provincial Growth Fund – jobs created

National MP Paul Goldsmith asked Minister for Regional Development Shane Jones questions about job creation in Parliament yesterday:

Hon Paul Goldsmith: Does he accept the figures of the latest household labour force survey, which showed that while New Zealand was creating 10,000 jobs per month under the last two years of the National Government, over the past three months it’s created only 667 jobs per month; and if so, does he think the Provincial Growth Fund will compensate for that massive reduction in job creation?

Hon SHANE JONES: On the question of jobs, as the first citizen of the provinces, I look at things through the spyglass of optimism. And the reality is that, as we make our allocation decisions, these projects and these capital investments take time to fully roll out. But I have sought additional advice, and very shortly I will provide a figure both to the House and to public, which is inversely related to the gibberish I had from that member around about Waitangi time.

Hon Paul Goldsmith: Does he accept that if job growth had continued at the same pace that it had under National, there would have been an extra 28,000 jobs created in the past three months in this country; and is the Provincial Growth Fund in any way compensating for that lost opportunity for Kiwis?

Hon SHANE JONES: Obviously, the Provincial Growth Fund is really premised on the notion of provincial futures, and I have had precious little time to think about those dim, bleak times that he refers to.

Comment from Gezza:


Provincial Champion, Shane Jones corrects the record on PGF job numbers
(Actually, it’s more of a case of he says he finally now has a record of job numbers)

Regional Economic Development Minister Shane Jones has told 1 NEWS that 560 jobs have been generated so far by the Provincial Growth Fund. It comes several weeks after National’s Economic and Regional Development spokesperson Paul Goldsmith claimed the fund had only created 54 jobs.

Mr Jones admits he wasn’t tracking the number properly, but says officials have now done a ring-around and are promising regular updates. “[It’s] 10 times larger than the miserable figure that my National opposition character [in] Epsom sulks, Mr Goldsmith was tossing around,” he said.

The Minister says the 560 figure is made up of both part-time and full-time jobs, and does not include contractors, trainees or bureaucrats.

More…

1 News at 6 video clip embedded
https://www.tvnz.co.nz/one-news/new-zealand/exclusive-govts-3b-provincial-growth-fund-generates-560-jobs-good-start-towards-10k-promise?variant=tb_v_1


So 560 is all jobs working any number of hours, not the Full Time Equivalent that is often given for job numbers.

It’s early days yet for the Provincial Growth Fund. ‘Only’ $650 million of the three year budget of $3 billion has been handed out so far.

Time will tell how many jobs are created through investment from the fund – total and FTE – and more time will tell how many of those jobs are not short term. It’s possible that once the fiunding runs out that some jobs won’t be financially sustainable.

 

Meanwhile the US economy continues to thrive

Despite all the political turmoil and President Trump’s confrontational and divisory approach the US economy continues to do very well, but there are some warning signs

The US share market is easing off record highs – the boom there may be a good sign, but could also pose future risks of a big bust.

Market Watch:  Job creation, wages slip in September as unemployment falls to 48-year low

The U.S. unemployment rate sank to a 48-year low of 3.7% in September as the economy added 134,000 new jobs, setting the stage for a strong holiday season to finish out what’s been stellar year for the U.S. economy.

The increase in hiring was the smallest in 12 months and below the recent trend, perhaps reflecting the effects of Hurricane Florence. Economists polled by MarketWatch had forecast a 168,000 increase.

Yet the increase in new jobs was enough to lower the unemployment rate to 3.7% from 3.9%. The last time the jobless rate was lower was in December 1969 — when the first man walked on the moon.

Many economists predict the jobless rate will fall even further in the months ahead.

Reuters:  U.S. job growth cools; unemployment rate drops to 3.7 percent

U.S. job growth slowed sharply in September likely as Hurricane Florence depressed restaurant and retail payrolls, but the unemployment rate fell to near a 49-year low of 3.7 percent, pointing to a further tightening in labor market conditions.

“The weaker gain in payrolls in September may partly reflect some hit from Hurricane Florence,” said Michael Pearce, senior U.S. economist at Capital Economics in New York. “There is little in this report to stop the Fed continuing to raise interest rates gradually.”

Fed Chairman Jerome Powell said on Tuesday that the economy’s outlook was “remarkably positive” and he believed it was on the cusp of a “historically rare” era of ultra-low unemployment and tame inflation.

Bloomberg:  Powell Heaps Trump-Like Praise on Economy as Rate Hikes Loom

In what Fed watchers say was unprecedented four public appearances over the past week, Powell repeatedly lauded the economy’s performance, calling it “remarkably positive,” “extraordinary” and “particularly bright.” And he said he expected the good times to continue.

“Interest rates are still accommodative, but we’re gradually moving to a place where they’ll be neutral,” neither holding back nor spurring economic growth, Powell said. “We may go past neutral. But we’re a long way from neutral at this point, probably,” he added.

The Fed raised its interest-rate target range last week to 2 percent to 2.25 percent.

Breaking with decades of presidential precedence, Trump has repeatedly criticized the Fed in recent months for raising rates. His latest salvo came on Sept. 26, just hours after Powell and his colleagues boosted rates for the third time this year.

Asked by veteran television anchor Judy Woodruff for his response to Trump’s outbursts, Powell replied, “My focus is essentially on controlling the controllable”.

The current economic expansion is already the second-longest in history, trailing only the 10-year period of the 1990s. If it continues, it will surpass that upturn next year.

But one trend should be of concern, US Government Debt:

Today the Federal Debt is about $21,605,363,414,469.16.

The amount is the gross outstanding debt issued by the United States Department of the Treasury since 1790 and reported here.

But, it doesn’t include state and local debt.

And, it doesn’t include so-called “agency debt.”

And, it doesn’t include the so-called unfunded liabilities of entitlement programs like Social Security and Medicare.

Forbes: Why The Federal Deficit Isn’t Cause For Panic… Yet

If you’re reading this, then it probably means you have also watched pundits scream at the top of their lungs about the impending doom brought about by the US deficit. Numbers like $20 Trillion are enough to scare anyone, so concern is warranted, however, panic is not.

The federal government is projected to add $985 billion to the federal deficit during fiscal year 2019. That’s because the government plans to spend over $4.4 trillion dollars, while bringing in only $3.42 trillion dollars. Nearly $400 Billion of the spending will go to service debt that’s already accrued over the years and that figure will only rise as interest rates increase.

While those numbers are astonishing and difficult to really wrap your mind around, it’s not as bad as it sounds. According to the non-partisan Congressional Budget Office’s (CBO’s) Budget and Economic Outlook: 2018 to 2028, “In CBO’s baseline projections, which incorporate the assumption that current laws governing taxes and spending generally remain unchanged, the federal budget deficit grows substantially over the next few years. Later on, between 2023 and 2028, it stabilizes in relation to the size of the economy, though at a high level by historical standards.”

Now I said not to panic earlier, because there are a number of adjustments and scenarios that will let the U.S. keep borrowing and spending long after any individual would have had their credit cards canceled. That said, at some point time will run out and our options to fix the situation will be less and less friendly. It’s the equivalent of waiting until you’re in the hospital to make lifestyle adjustments. By then, it might be too late.

The Baltimore Sun: U.S. debt addiction threatens national security

Arising China. An emboldened Russia. A nuclear Iran. Cyberwarfare. Ask a defense expert to name America’s biggest security concerns, and one of these will likely top the list.

These threats are real, of course. But one of the biggest dangers to our nation isn’t a hostile foreign actor. It’s a domestic one — our leaders’ addiction to debt.

The U.S. national debt is rising unsustainably. The Pentagon recently has been asking for more money, and Congress has been inclined to give it to them. Absent dramatic reform, national security will soon take a back seat to mandatory debt service.

The Hill: Congress approved $2.4 trillion in additional debt during fiscal year 2018: Watchdog

Congress approved $2.4 trillion in debt during fiscal year 2018, according to an analysis published this week by the watchdog group Committee for a Responsible Federal Budget (CFRB).

Trump administration officials have insisted that the tax law will ultimately bring down the deficit due to economic growth, a conclusion that’s been rejected by many budget watchers as well as some official bodies.

“At a time when debt is already at record-high levels and growing unsustainably, the $2.4 trillion added to the projected debt over the past year is incredibly irresponsible,” CFRB wrong in a blog post. “These changes alone will increase projected debt from 86 percent of GDP to 94 percent.”

Trump is used to taking big financial risks in business, but the financial health of the United States as well as the world are at stake. If things crash it won’t be as easy to walk away as it has been from his business failures.

If the New Zealand Government was increasing debt here to anything like 86% or 94% of GDP they would be strongly and widely criticised, for good reason. But for some reason business leaning pundits don’t seem to care about those levels of debt in the US, they hail the economy there as great.

Minimum wage rise versus jobs

The effect that the raising of the minimum wage might have on jobs has often been argued but never been proven. It depends on a number of factors, like how much the minimum is raised, and what the business and employment situation is like at the time.

Government officials have warned that the latest increase, due to come into effect next week (1 April), could jeopardise up to 3,000 jobs but the Minister of Workplace Relations disagrees.

NZ Herald: Minimum wage rise to $16.50 at the end of next week could cost 3000 jobs, says MBIE

Government officials say lifting the minimum wage to $16.50 an hour could see a loss of up to 3000 jobs.

Boosting the minimum wage was part of the Government’s 100-day plan and is set to take effect at the end of next week, on April 1.

In its regulatory impact statement, officials from the Ministry of Business, Innovation and Employment said an increase “may have negative employment impacts which include lower job growth and reduced work hours”.

“The estimated restraint on employment for a minimum wage of $16.50 is 3000,” the statement said.

It also noted that the effect on employment “is heavily debated in economic literature … there is no clear consensus”.

And the Minister, Iain Galloway, debates their warning.

Workplace Relations Minister Iain Lees-Galloway said workers had not had a fair share of economic growth, and the boost to the minimum wage was only one part of the Government’s strategy.

“The Government considers advice alongside a range of other factors, including prior experience increasing the minimum wage – which has always been positive.

“I note that Treasury also advised the best time to raise the minimum wage is while the labour market is strong and tightening.

“Treasury forecasts that the unemployment rate will keep falling towards 4 per cent over the next three years, and that average wages will rise on average at about 3 per cent a year over that time, due to a tight labour market.”

So Lees-Galloway seems to be dismissing the MBIE advice, and choosing to use different Treasury advice to support the increase.

This is a fairly modest increase in the minimum wage, from $15.75 to $16.50, but bigger increases are planned.

Labour and New Zealand First have agreed to increase the minimum wage to $20 an hour by April 2021.

One could guess that MBIE may have further job loss warnings if it is bumped up more.

And what if in the future Treasury advises that the labour market is no longer strong and tightening? Would the Government go against that advice?

They already have, last month. Stuff: Labour warned if economy turns, minimum wage plans will hit the young and unskilled

Treasury is urging the Government to ditch its plan to abolish the youth rate, warning that minimum wage pledges will hit the prospects of younger, unskilled workers if the economy cools.

Advice from Treasury officials released under the Official Information Act shows Treasury expressing concerns that a commitment to a substantial increase in the minimum could harming the prospects of the very people the rate was meant to protect.

While Treasury explicitly said it supported hiking the minimum wage by 75 cents an hour to $16.50 in April, as the economy and labour market would see little impact, officials warned the three-year plan to get the minimum wage to $20 could have a series of unintended consequences.

These ranged from hurting the local economy in already slow growth regions, the risk that once New Zealand’s minimum wage was on a par with Australia’s, fewer young, low-skilled worker would cross the Tasman for work and that higher minimum wages “has been shown” to attract young people to leave education to enter the workforce.

Lees-Galloway has been quite selective in picking advice to justify Government policy.

He was a Nurses’ Organisation organiser (aka a union official) prior to becoming an MP,

UK & Europe – Brexit financial impact

Topics about the UK, EU and Europe. Article 50 (Brexit) formally triggered.

UK-EU

An impact of Brexit could be the loss of ” euro-denominated clearing” from London.


Guardian: Up to 100,000 UK jobs at risk as Merkel and Juncker ally warns on euro clearing

The future of an estimated 100,000 jobs has been plunged into doubt after a close political ally of the German chancellor, Angela Merkel, and president of the European commission, Jean-Claude Juncker, warned that a prized sector in the City of London must relocate to EU soil after Brexit.

Manfred Weber, the leader of the centre-right European people’s party – the largest political group in the European parliament, to which both the German chancellor and the commission president belong – told reporters that euro-denominated clearing could no longer be undertaken in the City when the UK leaves the EU.

“EU citizens decide on their own money,” Weber said during a press conference in Strasbourg on Tuesday. “When the UK is leaving the European Union it is not thinkable that at the end the whole euro business is managed in London. This is an external place, this is not an EU place any more. The euro business should be managed on EU soil.”

Such a development would be a huge blow to the British economy. Six months ago, the head of the London Stock Exchange, Xavier Rolet, said at least 100,000 positions could be lost if the City’s clearing houses lost their ability to process euro-denominated transactions.

Clearing houses are independent parties that sit between the two parties in a trade and are tasked with managing the risk if one side defaults on payment. London clears around three-quarters of all euro-denominated trades.

Brexit was always going to have some down sides for the UK.

Treasury forecasts

Bill English will have a sound financial foundation to build his government on.  The latest Treasury forecasts were released today (by English).

  • Economic growth – 3% average over the next five years
  • Unemployment to drop to 4.3% by 2020/21
  • 150,000 jobs to be created
  • Average wage to increase by $7,500 to $66,000

Treasury forecasts solid growth, stable finances

Treasury’s latest forecasts show the Government’s programme of responsible economic and fiscal management is delivering benefits for New Zealanders, Finance Minister Bill English says.

“Economic growth is expected to average around 3 per cent over the next five years – considerably stronger than forecast in Budget 2016 – supporting more jobs, falling unemployment and higher incomes,” Mr English says.

“The more positive outlook for the economy is driven by high levels of construction activity, exports (particularly tourism), a growing population and low interest rates.”

The 2016 Half Year Economic and Fiscal Update forecasts unemployment to  drop to 4.3 per cent by 2020/21. Over the same period Treasury expects another 150,000 jobs to be created and the average wage to increase by $7,500 to $66,000.

“While the recent Kaikoura earthquakes have had a major impact on affected families and businesses, they are not expected to disrupt the overall momentum of the economy,” Mr English says.

“However, the earthquakes do highlight the importance of paying off debt in the good times so that the Government can support New Zealand communities in challenging times.”

Treasury estimates the total fiscal cost of the earthquakes will be about $2 billion to $3 billion, some of which will be funded by insurance proceeds or existing funds. Net costs of $1 billion have been included in this year’s forecasts.

The operating balance before gains and losses (OBEGAL) is forecast to be $473 million in surplus this year, rising to $8.5 billion over the forecast period.

The Half Year Update shows net debt peaked as a proportion of GDP in 2015/16 – a year earlier than previously expected – and is expected to fall to 18.8 per cent of GDP by 2020/21.

Mr English says the accompanying Budget Policy Statement confirms the operating allowance will remain at $1.5 billion for each of the next four Budgets.

The capital allowance for Budget 2016 has been increased from $900 million to $3 billion in Budget 2017 and to $2 billion in future Budgets to provide for a number of high quality infrastructure and investment projects.

Contributions to the NZ Super Fund are forecast to restart in 2020/21 once net debt falls below 20 per cent of GDP.

The Half Year Economic and Fiscal Update and Budget Policy Statement can be found hereand here.

Aus effect on NZ immigration numbers

In contrast to confused claims by Winston Peters that the movement of Kiwis back to New Zealand is due to being treated as second class citizens in Australia but that New Zealand is “a last resort”, Liam Dann supports his opinion with reason – it’s mostly about the economies.

Liam Dann: Oz fortunes a big factor in arrivals wave

…it isn’t hard to draw a link between Australia’s economy and our current immigration boom.

New Zealand’s net migration gain of 68,400 in the year to May 2016 was a nominal record dating back to at least 1860.

We’ve never, even in colonial times, gained so many new residents in a year. There have been much bigger percentage gains of course.

Even on that basis, the past year has been huge.

While there is a lot of focus on Chinese home buyers, it is New Zealanders coming home (and not leaving) that has made the difference.

Compared to the May 2012 year, departures to Australia have a fallen from 48,000 to 20,000. Arrivals have spiked from 8800 to 16,800.

So the biggest shift is in far fewer Kiwis heading to Australia in the first place, but more are returning than before as well.

We even had a net gain of 1700 Australian citizens.

They can’t be, as Peters puts it, “second class citizens” in Australia. There will be a variety of reasons for them coming here but “last resort” is unlikely to be one.

The open borders have always made the lure of Australia our biggest immigration variable. And it is one that can swing sharply.

And it’s something that the Government cannot and should not control.

The end of the mining boom, an economic slowdown and the inclusion of Kiwi residents in tough immigration laws that allow for detainment and deportation based on “bad character” tests have dramatically reversed the flow of transtasman migration.

The biggest factor is availability of jobs, or lack of availability.

How long will this trend last? Is our relative economic success a driver? Or is migration driving our economic success?

If Australia’s economy or political policies change radically then our migration story will too.

We need to ensure we have social policy to protect people from losing out and turning their anger towards migrants.

Anger towards migrants that is deliberately stoked by Peters for political purposes. That’s very poor for an MP.

We need to remember the current surge is not driven just by the more highly visible arrivals of different culture and ethnicity.

It is being driven by New Zealand passport holders.

History tells us this wave will not last. And that when it passes it will have left this country richer and stronger.

As long as politicians like Peters don’t drag us down.

It didn’t just happen

A misleading Martyn Bradbury headline: That thing Key promised was unlikely to happen with the TPPA just happened

Beyond the spin that NZers would have a say about the TPPA, beyond the lies of how much money it will make us, beyond the fact it’s an American geopolitical strategy to counter China in the pacific – is the terrifying reality that the TPPA opens NZ up to foreign corporations suing us if domestic law costs them money.

Key say’s it’s unlikely to happen – it just did.

Except that it didn’t just happen under the TPPA.

The thing that is happening between Canada and the US is under the North American Free Trade Agreement and has nothing to do with the Trans Pacific Partnership Agreement, which hasn’t yet been signed or ratified and hasn’t come into effect yet.

Bradbury goes on to sort of acknowledge this…

…by signing the TPPA and having it ratified by the necessary members John Key is signing away our ability to pass domestic law without costing us millions in legal fees and opening us up to potentially massive damage claims from unscrupulous corporates.

But as we know Bradbury’s frantic ranting is hard to take seriously. He is in the ‘trade deal bad’ and ‘corporation bad’ club.

I wonder how many members of the unions who support The Daily Blog (presumably financially) owe their employment to corporations?

And I wonder how many of them owe their employment to trade deals?

I suspect the jobs of some members of the Rail and Maritime Transport Union are at least partly reliant on imports and exports that happen because of trade deals.