Coronavirus - New Zealand
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@Baron-Silas-Greenback said in Coronavirus - New Zealand:
I am incredulous that the govt still increased minimum wage at the same time as unemployment is going to sky rocket.
Not surprised at all.
NZ measures both production and demand GDP, but demand GDP is the one used as the headline rate to define the size and performance of the economy. If there are large permanent wage cuts/reductions as a result of Covid-19, the economy as measured by GDP will crater for a lot longer than if we come out of lockdown and wages return to their old levels quickly.
A common concern has been how to avoid Covid-19 impacting the economy any more than necessary, and a key part of that is to keep demand afloat for when the lockdown ends, companies go back to work, and supply has demand to sell to.
We will also probably have to rely on Keynesian measures beyond just wage subsidies and higher benefits. Government is currently working on infrastructure programmes to roll out ASAP, and the provincial growth fund has been diverted into similar programmes.
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Your theory holds up.... possibly.. in an environment with low unemployment, wages wont return to previous levels, because they cannot if you expect businesses to survive.
Companies will not commit to new hires if they have wage inflation, which is exactly what raising the min wage in a high unemployment era does. The last thing you want in a deep recession is wage inflation!. Normally that would never happen as basic market forces would work against it, but when you have govt intervention that changes everything.
It is just reckless ideology form the govt to have continued with the min wage increase. Demand wont come back because you increase min wage, as it suppresses one side of the equation. The equation being more people spending more..... you are going to instead have a lot less spending a small amount more (and even that is debatable).There are going to be massive cuts to how much money those on min wage earn as a group, lets make up some numbers, a) 1 million people earning $19 per hour for a 40 hour week, compared to
b)1.4 ,million people making $18 per hour for 40 hour week,a)$760,000,000
b)$1,080,000,000Which amount will be able to spend more? It aint the group making $19
And I am facing this on a very real level, I am about to lay off a couple of guys, if I am being honest 1 of them is directly related to keeping wage costs down that were just inflated by the govt. I know this guy will be straight on the dole, and likely will be for quite some time, he is a direct casualty of the govt ideology over pragmatism. The other guy is more a victim of the wuflu making his job not required.
The min wage hike just helps a select group who will keep their min wage jobs, it doesn't help skilled workers who deserve a % higher than min wage, it doesnt help the unlucky min wage workers who get layed off, and it doesn't help those desperately looking for a job.The NZ economy is rooted, and a lot of that will because the people in charge currently have no clue how business operates, and no true empathy for the poor.
if they actually cared at all beyond ideology they would have just changed working for families around, I wouldnt have liked that either, but it would have given the working poor a boost, increased incomes and not savaged business that is already in for a terrible time.The Labour govt is going to crate a massive underclass of non working.
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@taniwharugby Those 2 critical in ICU are a worry. I hope they make it.
The numbers are still consistent with expectations. Bloomfield said on Friday that they still expect the numbers to rise for several days. I hope we can see a real change on Wednesday.
Also noteworthy is that the number of new confirmed cases has gone down considerably and the number of new probable cases is now almost half of the new cases. Some of those probable cases could still become negative.
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@Stargazer said in Coronavirus - New Zealand:
Can we have a separate Cornona - politics thread from this one, so those of us who prefer to block politics threads don't have to read that stuff here?
It isnt politic, it is economics and as time goes on the economic impact is as big if not bigger than a medical impact. Thisisnt a medical thread, it is a coronavirus thread.
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@Baron-Silas-Greenback It's economic politics. You can't separate the two, unless you just provide facts without offering your politically coloured opinion on those facts.
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American site and contributors, but an interesting read in the tradeoffs between economy and health, and basically points out that it's hard to trade off health for economy because the economy depends on health.
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@Godder said in Coronavirus - New Zealand:
American site and contributors, but an interesting read in the tradeoffs between economy and health, and basically points out that it's hard to trade off health for economy because the economy depends on health.
And vice versa. There is also a health cost to an economic crash, eg increase in suicides, mental health, access to health care, diet, etc
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@Godder said in Coronavirus - New Zealand:
American site and contributors, but an interesting read in the tradeoffs between economy and health, and basically points out that it's hard to trade off health for economy because the economy depends on health.
You aren't portraying the article fairly with that summation. It does a good job of arguing from both angles. A recession and pain was always going to happen, but it is govts job to limit it and smooth it amongst citizens. The NZ govt is doing a terrible job of that IMO. The current economic winners are govt workers and the cashed up. Losers are, or will be, nearly everyone else. I think the wage subsidy was very good and well handled. But I think university public health professors scared the govt into a complete lockdown way to fast. And raising benefits and the min wage was crazy. Well benefits increase was more sneaky than crazy. As that won't cost jobs and businesses. It was just politics.
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@Baron-Silas-Greenback said in Coronavirus - New Zealand:
@Godder said in Coronavirus - New Zealand:
American site and contributors, but an interesting read in the tradeoffs between economy and health, and basically points out that it's hard to trade off health for economy because the economy depends on health.
You aren't portraying the article fairly with that summation. It does a good job of arguing from both angles. A recession and pain was always going to happen, but it is govts job to limit it and smooth it amongst citizens. The NZ govt is doing a terrible job of that IMO. The current economic winners are govt workers and the cashed up. Losers are, or will be, nearly everyone else. I think the wage subsidy was very good and well handled. But I think university public health professors scared the govt into a complete lockdown way to fast. And raising benefits and the min wage was crazy. Well benefits increase was more sneaky than crazy. As that won't cost jobs and businesses. It was just politics.
Aren't there Government workers who could be put on furlough?
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@Tim said in Coronavirus - New Zealand:
So will there be a tax increase later in the year?
You could bet your house on it. Nothing Labour likes more than a tax.
And now they will have a cratering economy to blame on it. Wonder if we will get a concerned face Jacinda explaining they just had no choice, so now is the time for a capital gains tax so those more "well off" can help those less fortunate. Higher Income tax, etc, etc
Some mealy mouthed bullshit like that anyway.
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@Kirwan said in Coronavirus - New Zealand:
@Tim said in Coronavirus - New Zealand:
So will there be a tax increase later in the year?
You could bet your house on it. Nothing Labour likes more than a tax.
And now they will have a cratering economy to blame on it. Wonder if we will get a concerned face Jacinda explaining they just had no choice, so now is the time for a capital gains tax so those more "well off" can help those less fortunate. Higher Income tax, etc, etc
Some mealy mouthed bullshit like that anyway.
I will bet you there isn't going to be any of that this year.
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@Kirwan said in Coronavirus - New Zealand:
@Hooroo after the election, if they cobble enough votes again.
Again, I bet that won't happen this year.
They will walk the election, no problem this year, that is a given IMO. I don't see a tax increase this year though
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@Hooroo said in Coronavirus - New Zealand:
@Kirwan said in Coronavirus - New Zealand:
@Hooroo after the election, if they cobble enough votes again.
Again, I bet that won't happen this year.
They will walk the election, no problem this year, that is a given IMO. I don't see a tax increase this year though
They'll need both the Greens and NZ FIrst to be over the 5% threshold for that to happen. And for their to be no lockdown backlash. You can already see frustratation building from people's comments online, and even here.
Before the crisis some of the polls had National and Act able to govern alone, so not sure about walk it.
I'm expecting them to ask for a delay in the election to put some distance between this.
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@Kirwan said in Coronavirus - New Zealand:
@Hooroo said in Coronavirus - New Zealand:
@Kirwan said in Coronavirus - New Zealand:
@Hooroo after the election, if they cobble enough votes again.
Again, I bet that won't happen this year.
They will walk the election, no problem this year, that is a given IMO. I don't see a tax increase this year though
They'll need both the Greens and NZ FIrst to be over the 5% threshold for that to happen. And for their to be no lockdown backlash. You can already see frustratation building from people's comments online, and even here.
Before the crisis some of the polls had National and Act able to govern alone, so not sure about walk it.
I'm expecting them to ask for a delay in the election to put some distance between this.
All of that happening suggests there won't be a tax increase this year.
I can't see an election in September either (Was is supposed to be Sept?)
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I think CV has ruined what slim chances National had. Hard core National voters are there of course but it's the undecideds that determine elections. For all her faults Cindy does crisis management PR very, very well. She comes across as calm, assured and in control.
From the google analytics @Duluth posted there doesn't seem to be a backlash. NZ is complying even more than the places that you would expect to be in their bunkers (Italy, Spain, New York, UK). The overwhelming majority seem to be taking this very seriously. If we limit the health impact of CV then those undecideds will turn to Labour in droves. Not just because of the results but because of the feel good - little old NZ didn't we do well factor. Yeah there will be high unemployment, but's the virus right? - not Cindy didn't she do well.
Also I'm with @Hooroo - nothing Grant Robertson has said or done indicates tax rises are in his thinking. Quite the opposite. He wants people out there spending money to stimulate the economy. Plus they don't need the money. Just borrow.
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Labour will most certainly get a boost just like Trump is. Ardern does do crisis PR very well.
There are big risks for the govt though, if they extend the lockdown and we still have a low death toll and more businesses fold and people lose jobs... The mood could get very ugly.