The Sunday Star Times seems to like the issue of energy prices. So far in March they have had:
Both of these come from Sunday Star Times reporter – Tim Hunter. So I wonder which report he believes? I wonder what report I would believe if I actually got to see them. I wonder what report you guys would believe!
David Farrar has a very good reply to this post from Tane at the Standard.
There are a few points I would like to make as well though. Tane says:
David Farrar made the same fallacy the other day, the minimum wage isn’t there to make us all rich, it’s there to ensure that people on low incomes are able to live their lives with some basic dignity and security
Well, the minimum wage is a poor tool to do this. The best wage to ensure that people have a minimum income is from the state to provide it directly – which they do with the unemployment benefit. In this case everyone has a minimum living standard, but by joining the labour market they can improve on this. Although I believe there is a case for a minimum wage – the case for “increasing” it is much more debatable.
The next section is the bit David discusses:
When I was cruising the data freeway that is Stats NZ today I noticed this on pg 15 of the HLFS (which has been revised):
The fourth highlight in the Hot Off The Press that said “Seasonally adjusted total actual hours
worked per week fell by 1.9 percent” now says “…fell by 0.5 percent”.
This is an enormous revision. Annual growth went from -2.8% to -1.2%. This should have some impact on people GDP forecasts methinks.
The revision was out on the 20th. They will have been working on their GDP numbers. Productivity may have seemed a bit strong – then they discovered this error when checking over the figures. That is my suspicion here (I know, very conspiracy theorist of me 😉 ). Very interesting.
I think this is an excellent policy.
Employees will be able to trade their fourth week of annual holidays for cash by next year, Prime Minister John Key said today.
This way, if there is some level of compensation that the employer is willing to make, and the employee is willing to accept, they can trade away the additional week of leave. I would be very keen to trade-in a week of leave for cash most of the time – as I enjoy doing economics so much anyway 😉
Generally, I am a big fan of giving people flexibility in the labour market (both employers and employees) and this policy increases flexibility for both parties. Excellent 🙂
I just read an article on stuff where Peter Dunne has said the government is committed to aligning personal, company and tax rates in the medium term. I think this is great news, this quote sums it up for me:
The differences “provides scope for people to use various entities to structure their tax affairs so as to reduce their tax liabilities”
Having differences in the top tax rates gives people the incentive and ability to restructure their affairs to avoid paying taxes. This is just a waste of resources.
Now the article says that all rates are going to 30%, I’m not particularily concerned with what that number is. I’m not arguing we should have lower tax rates, I’m arguing that we shouldn’t have a large differential in the top rates.
Source NBNZ
The RBNZ felt that the dollar would fall toward a TWI of 47 – not lift to 55. As the Bank is currently focused on short-term economic activity, rather than inflation, the sudden lift in the TWI will actually give them more reason to cut harder in April.
Given this increasing risk of a larger cut I think iPredict has a good set of prices at the moment. 25 is still the most likely, but 50 has a good chance – although to be fair I did buy a small number of 50’s when I saw the relative price 🙂 .
On the no change side I think the market is highly over-pricing it – given that the Bank said it would only stop cutting when it is positive that they have hit the bottom of the cycle – as a result having a 22% chance of no change is not consistent with the 96% chance the market currently has on an OCR under 3% 😛 (as a result, I shorted a slightly larger bundle of these).