jamesz

Changing the way we recycle

/8 Comments/in , /by

A couple of NZ city councils have recently considered changing the way they run recycling after a brief discussion with experts from www.kuringgaiskipbins.com.au, as it high time we give back to the earth more than we take. Wellington and Christchurch currently fund their kerbside recycling scheme through rates. They proposed to switch to a system whereby recycling bags would have to be bought by residents, much like council rubbish bags.

There are a few benefits to switching to bags. First, the people who use the recycling service would pay for it, rather than it being funded by all ratepayers equally. Secondly, there would be a marginal cost to using the service, which would decrease usage. Read more

jamesz

In favour of the ‘iwi tax’

/7 Comments/in , /by

Fishermen on the Waikato are apparently going to be subjected to an environmental levy on their earnings by the iwi who own the river. The newspaper article seems a bit negative about the scheme and I can’t see why. To me this is a great idea on a number of levels. I just hope that the levy is a tax, rather than a one off charge. Read more

Matt Nolan

New blog from NZ economist

/in , , /by

Offsetting behaviour by Eric Crampton (ht Anti-Dismal).

Already there is a set of post on policy ignorance up.  Here is a quote from here:

Political ignorance then is ignorance about how the political system works in general rather than necessarily ignorance about any specific policy issue

I can tell you’re interested, go give it a look already 😉

Matt Nolan

Surprise fall in Aussie GDP: What happened

/2 Comments/in , /by

One piece of information managed to shake me out of my flu induced daze for long enough to write a post – Australian GDP had a surprising fall over the December quarter, falling 0.5% (seasonally adjusted) on September.

Appears that inventory accumulation was knocked down sharply – that is very interesting.  Usually during a recession inventories are a positive contributor – as spending slows more quickly than production.  This implies to me that the fall in GDP may not be sustainable – as inventory accumulation will need to build back up.

As a result, even with a 0.5% fall this quarter, I’m not sure if we are going to see an Aussie recession (two quarters of negative growth) quite yet …

Of course – the steep fall in their terms of trade is concerning – but that is a story for when I’m actually able to think 🙂

Matt Nolan

February RBA: Rates unchanged

/4 Comments/in , /by

The Reserve Bank of Australia has left their rates unchanged at 3.25% (statement here). We suggested that this was a possibility earlier in the day – and it is the closest thing to a correct rate call that I’ve have made for the last 18 months 😛

Relatively robust domestic demand, combined with commodity prices that just won’t fall sharply, has convinced the RBA that there is now enough stimulus.

They haven’t given up on future rate cuts. “The Board will consider the position again at its next meeting” indicates to me that there is room for cuts if Australian output starts to decline or if commodity prices from their end are really starting to sag.

This will definitely dent expected rate cuts in New Zealand. Before this I would have bagged a 75 cut – now a 50 cut is looking a lot more likely (than it was). I’ll keep an eye on iPredicit to see what is going to happen.

Matt Nolan

February Australian commodity prices

/1 Comment/in , /by

In all this negative news there is one plus that keeps on going:  Australian commodity prices:

aucommodSource(RBA)

In Australian dollar terms export prices are virtually unchanged.  I prefer looking at world prices though, as it gives you some idea of relative prices without having to look at the terms of trade (a sketchy idea).  In this sense prices are down 12% on their September 2008 peak.  However, to put this in perspective, this is 20% higher than February 2008!

I am very surprised with how strongly Australian commodity prices have held up.  Late last year people told me it was because the RBA measure was a “lagging indicator.  However, its February now and the index still looks very strong – why?  With this sort of information I can understand why the RBA might not cut rates today.