Coronavirus - New Zealand
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@JC The money they are spending now is new borrowing so it hasn't taken money away from any other area of spending.
they have also borrowed for the recovery which will see additional infrastructure spending
Finally if people lose jobs and companies go under the economy contracts. The government has taken steps to mitigate both those scenarios. That's supporting the economy surely. But yeah they are running the economy in a way we haven't seen since the early 80's. Hopefully they aren't ruining it as much as Muldoon did.
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@dogmeat said in Coronavirus - New Zealand:
@JC The money they are spending now is new borrowing so it hasn't taken money away from any other area of spending.
they have also borrowed for the recovery which will see additional infrastructure spending
Finally if people lose jobs and companies go under the economy contracts. The government has taken steps to mitigate both those scenarios. That's supporting the economy surely. But yeah they are running the economy in a way we haven't seen since the early 80's. Hopefully they aren't ruining it as much as Muldoon did.
Have they really though? The wage subsidy wasnt for a lockdown, it was for a slow down. Then they went full nuclear and shut everything down. I havent seen anything significant that will even scratch the surface of the carnage they are unleashing.
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@taniwharugby the main weakness I see in NZ strategy is how to get out of it.
If the virus is eradicated in NZ that’s excellent. But when do you allow international travel again?
Don’t get me wrong - I’d rather be in NZ right now than UK, that’s unquestionable. But I just can’t see how the measures can be unwound. I can see NZ closing borders / locking people down in phases for up to 3 - 5 years. We are equally as vulnerable up here, altho I expect if the antibodies tests come available the results will be eye opening.
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@JC said in Coronavirus - New Zealand:
@dogmeat said in Coronavirus - New Zealand:
@Kirwan @Baron-Silas-Greenback - I see no evidence that the government isn't incredibly concerned about the economy. They're spending billions to support it.
I’ve tried to stay well away from this but I couldn’t let this go by unchallenged.
Spending money the way the government is doing is not supporting the economy. It is moving money - that they don’t actually have, by the way - from one part of the economy to another. Every dollar they spend this way is a dollar not spent on something they previously thought was essential. If that was infrastructure, which boosts GDP, then that infrastructure will not now be built.
The way to repair the economy is to let the economy do what it does, finding the most efficient way to allocate the available resources with the intention of increasing their value. That is something that clearly isn’t happening at the moment, because the majority of participants in the economy are banned from working.
However good the intentions of the government are, they aren’t supporting the economy as much as running it.
And this is the bit that really concerns me. One thing politicans have shown (from all parties) is that they shouldn't be running the economy. The farce of them picking what is an essential service underlines that completely.
I also probably have irrational concerns about leaders that use terms like "comrade" unironically getting a taste of running the economy.
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@Godder said in Coronavirus - New Zealand:
Something else to consider in the death counts - a lower road toll.
Yeah, articles like this make me feel sick to be honest.
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@Kirwan said in Coronavirus - New Zealand:
@Godder said in Coronavirus - New Zealand:
Something else to consider in the death counts - a lower road toll.
Yeah, articles like this make me feel sick to be honest.
That and cleaner air and all the rest of the dross around "benefits of lockdown" Personally, I want to get out and about again.
It's a stupid train of thought that the attached article is a benefit. It's not, it's an outcome.
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@Godder said in Lockdown Check In:
@booboo apparently GPs have had a massive loss of revenue because alert level 4 means people just aren't going, even though they are allowed to.
Pharmacies must be in a similar boat too. They have all the costs of being open, but seem to have little foot traffic from one that I've spoken with.
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@Hooroo said in Coronavirus - New Zealand:
@Kirwan said in Coronavirus - New Zealand:
@Godder said in Coronavirus - New Zealand:
Something else to consider in the death counts - a lower road toll.
Yeah, articles like this make me feel sick to be honest.
It's a stupid train of thought that the attached article is a benefit. It's not, it's an outcome.
oooh I like it. Well done Mr Hooroo, dont get used to my compliments on your opinions though......
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@Baron-Silas-Greenback said in Coronavirus - New Zealand:
@Hooroo said in Coronavirus - New Zealand:
@Kirwan said in Coronavirus - New Zealand:
@Godder said in Coronavirus - New Zealand:
Something else to consider in the death counts - a lower road toll.
Yeah, articles like this make me feel sick to be honest.
It's a stupid train of thought that the attached article is a benefit. It's not, it's an outcome.
oooh I like it. Well done Mr Hooroo, dont get used to my compliments on your opinions though......
I won't. This is internet
I honestly feel I can detach myself from the political side of this and just look at it as a decision making exercise by a human(s)
So far, I'm happy enough, without the benefit of hindsight, that for the most, the right decisions for this country have been made.
I am under no illusion though that things are going to get very tough and consequences will be extreme.
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@Godder said in Lockdown Check In:
@booboo apparently GPs have had a massive loss of revenue because alert level 4 means people just aren't going, even though they are allowed to.
Our clinic is suffering this at the moment. The doctors have noticed a severe drop off in traffic because people think they will be swamped with covid19. Actually a good time (if there ever is one) to get non-covid unwell and head to your GMP or A&E
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@Donsteppa I have a client that has 3 pharmacies, I know thier main one is busy AF, unsure about the other 2, but expect they will be pretty busy too...thier main one is next to a busy COuntdown too, so that probably helps
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Akl Council's list of immediate infrastructure projects for govt funding:
•Developing a rapid transit system to the North West
•Funding light rail from the City Centre to Mt Roskill and Māngere
•A fourth main trunk rail line constructed at the same time as the third to save costs
•Increasing NZTA funding proportions for projects such as the Matakana Link Road, which could start immediately, and the second and third stages of the Eastern Busway to Botany
•Sped up construction of cycleways which could start immediately
•Bringing forward roading renewals currently at the back of the 10-year Auckland Transport Alignment Project (ATAP)
•Creating a charging network and bus depots to accelerate electrification of the city’s bus fleet
•Funding local roads in new housing developments such as Drury
•Building infrastructure to allow intensive residential and commercial precincts around the new City Rail Link stations at Mt Eden, Karangahape Rd and Aotea Centre
•Funding underground fresh, waste and stormwater infrastructure in regeneration programmes such as Tāmaki, and new developments such as the Unitec site
•Bringing forward separation of wastewater from stormwater to clean up Auckland’s harbours
•Cultural and community amenities such as building a Pasifika and Māori cultural centre at Manukau, Te Papa North.There are still places in Akl where you can see the concrete roads laid down during the 30's Depression. My grandfather worked on Great North Road. He was an unemployed teacher.
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@Godder said in Lockdown Check In:
@booboo apparently GPs have had a massive loss of revenue because alert level 4 means people just aren't going, even though they are allowed to.
I get that. Have to make appt with Doc to review routine blood tests, and not too keen to sit in waiting room ...
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@dogmeat said in Coronavirus - New Zealand:
@JC The money they are spending now is new borrowing so it hasn't taken money away from any other area of spending.
they have also borrowed for the recovery which will see additional infrastructure spending
Finally if people lose jobs and companies go under the economy contracts. The government has taken steps to mitigate both those scenarios. That's supporting the economy surely. But yeah they are running the economy in a way we haven't seen since the early 80's. Hopefully they aren't ruining it as much as Muldoon did.
The money they are spending now is also through quantitative easing. QE is like a stock split in a company - the company is the same, with the same revenues and assets, but instead of 1m x $10 shares you now have 2m x $5 shares. QE devalues the worth of each unit of productivity in the economy, exactly like inflation does.
The idea that borrowing is a way out of this is something I'm sceptical about. Even at low interest rates the principal has to be repaid. The net core debt currently stands at $60bn, about 20% of GDP. That's pre-recession GDP, by the way. The already announced debt expansion is $25bn, and the consensus GDP contraction for this year is 10%. So we can expect net core debt to rise to 30% of GDP by year end at a minimum. If the debt growth is $60bn, which has been touted, that will equate to 43% of GDP. Then the doom-mongers estimates of %50 don't seem so fantastic. I don't know how the government intends to repay that using tax revenues from a temporarily crippled economy. But hey, I'm sure Grant and Cindy have economics expertise that outweighs mine.
Finally if people lose jobs and companies go under the economy contracts. The government has taken steps to mitigate both those scenarios. That's supporting the economy surely.
This is an interesting point. Some, @Baron-Silas-Greenback for example, would no doubt argue that mitigating the scenario is the least they could do given that they are the ones dictating the conditions that lead to the job losses. You're right, the economy contracts under those circumstances. But it's legitimate to ask if it was necessary in the first place. And it's not sustainable.
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@JC this may seem a dumb question, but who are the 'borrowing' from?
Given most Govts. are doing this to try to keep their economies heads above water, they cant all be borrowing from a single entity, is it just a big money go round or is 'borrowing' just making more money?
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@dogmeat said in Lockdown Check In:
GP's and Pharmacies have been given 15mill each (last week) with more to come
So the govt is picking more winners and losers..... work at a pharmacy = winner, work at a butchers = loser.
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The RBNZ issues Treasury Bonds. Effectively they are promises to repay the face value plus a specified interest amount (called the coupon) at a future specified date. These are tradable in the open market. They are issued by tender, and there is a register of tender counterparties who are allowed to bid. These institutions then sell them on into the retail market.
Edit: If you have a Kiwisaver account your provider may have some of your portfolio made up of Treasury Bonds. They have lowish returns (especially now) but are considered low risk.