Stonking confidence

April 8th, 2014 at 3:00 pm by David Farrar

Stuff reports:

The is running at the best pace in more than a decade and business confidence is the highest since 1994 according to a new survey.

The latest NZIER Quarterly Survey of Business Opinion released today shows optimism and activity were being translated into hiring, investment and better profits.

“The underlying trend is very, very strong – stonking,” NZIER principal economist Shamubeel Eaqub said.

Retail spending surged to its highest level since 1994 and building was at its best since December 2003.

The survey shows confidence about the general business situation remained at net 52 per cent of firms positive, seasonally adjusted, the highest since June 1994.

The ten year highs keep getting replaced by 20 year highs.

So obviously this is a time in which we need to increase taxes, scrap our monetary policy, and partially nationalise electricity and housing sectors!

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26 Responses to “Stonking confidence”

  1. Fisiani (1,039 comments) says:

    You know your last paragraph is total irony.i know you mean the opposite but for the humourless left.

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  2. Fisiani (1,039 comments) says:

    all they read is music to their ears.

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  3. Dean Papa (784 comments) says:

    Stonking is a great word!! I first encountered it reading whathifi magazines’ review of some wharfedale speakers, from their diamond range I believe. There is another cool word of similar meaning, also beginning with ‘s’, but it escapes me now.

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  4. Bill Ted (93 comments) says:

    To be fair, DPF, Labour is the only party fully focused on tackling the biggest issue of the day. Equal distribution of face time with the royals.

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  5. Redbaiter (8,823 comments) says:

    Funny ain’t it. You’d think if things were really “stonking”, then tax receipts wouldn’t be running a few billion below estimates.

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  6. EAD (1,086 comments) says:

    Get a grip of yourself Farrar – you are beginning to make a fool of yourself with this relentless propagandising. If this were the Labour party, you’d be castigating them for their reckless borrow and spend policies. This is a credit boom, nothing more, nothing less, enjoy it while it lasts as artificial booms always turn into busts.

    “True, governments can reduce the rate of interest in the short run. They can issue additional paper money. They can open the way to credit expansion by the banks. They can thus create an artificial boom and the appearance of prosperity. But such a boom is bound to collapse sooner or later and bring about a depression” – Ludwig Von Mises

    “The expansionists are quite right in asserting that credit expansion succeeds in bringing about booming business. They are mistaken only in ignoring the fact that such an artificial prosperity cannot last and must inextricably lead to a slump, a general depression.” – also Ludwig Von Mises

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  7. Yoza (1,872 comments) says:

    So obviously this is a time in which we need to increase taxes, scrap our monetary policy, and partially nationalise electricity and housing sectors!

    The problem being that in the neoliberal mindset there never is an ideal series of circumstances which allow for anything but policies serving the specific requirements of an affluent minority.

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  8. Sir Cullen's Sidekick (890 comments) says:

    The tax take is down. So time to tax the hell out of rich pricks.

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  9. Bogusnews (474 comments) says:

    Astonishing is the right word. I never thought National would do so well with the very conservative policies they have used. Especially considering the basket case Labour had left them with.

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  10. Cunningham (844 comments) says:

    Yoza

    “The problem being that in the neoliberal mindset there never is an ideal series of circumstances which allow for anything but policies serving the specific requirements of an affluent minority.”

    That ‘afluent minority’ have often studied very hard to get where they are (like me). Or they put everything on the line to start a business which employs people. Your attitude towards people like this is appalling really. Unlike some countries (e.g. Afghanistan) , anyone in this country has the choice to do this. Life is about choices. If your prepared to get off your ass and persue this kind of lifestyle then why shouldn’t you be rewarded?

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  11. prosper (164 comments) says:

    The tax take is actually up by a substantial amount both corporate and personal. It was less than treasury estimates a quite different thing. Clearly tax cuts work. Let’s have some more so that we will gain even more revenue.

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  12. Fisiani (1,039 comments) says:

    Why would anyone with this confidence want a radical change of government? Simply impossible.

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  13. Viking2 (11,471 comments) says:

    Tax take is up perhaps but so are our borrowings so won’t be long and we will join Greece.

    It fascinates me that as Kiwi’s we get exhorted to run faster work harder and smarter, export more etc etc, all of which we do if one looks at our export receipts but the the problem remains that we are still going backwards when it comes to actually making a profit and paying our way in the world.
    I not far from giving work away but I fear for the younger generations and their ability to maintain the growth pace which will be required to at some point pay back our debts and reduce our current account deficit.

    We don’t have an earning/working problem we have a spending problem.

    200,000 new cars this year. wow.
    The planes are full of people going on holidays oversea’s.

    Clearly insufficient restraint on our ability to spend. Add to that our internal spending which is far from in control and we still have a problem.
    It won’t be solved until we have another Roger Douglas.
    It will take a transaction tax biased against imports to fix the problem
    That’s still 3.5 years away.

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  14. johnwellingtonwells (137 comments) says:

    Viking – the last thing we need to solve our problems is a bankrupt pig farmer

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  15. Yoza (1,872 comments) says:

    Cunningham (744 comments) says:
    April 8th, 2014 at 4:57 pm

    That ‘afluent minority’ have often studied very hard to get where they are (like me). Or they put everything on the line to start a business which employs people.

    Those inhabiting the upper echelons of the social order are there, more often than not, as a consequence of birth. Just because someone has ascended to that higher social/economic strata through risk or hard work that effort does not confer a justifiable mandate to subject others to self-serving social and economic objectives. Using a clumsy analogy, just because a person is born unnaturally large or they have worked hard in the gym perfecting their martial art skills they have no justifiable mandate to lurk about the place subjecting their physical inferiors to their will.

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  16. ShawnLH (5,025 comments) says:

    “Those inhabiting the upper echelons of the social order are there, more often than not, as a consequence of birth. ”

    This may have been true in the 19th century, but it could hardly be said to true today, certainly not to the degree your saying.

    ” they have no justifiable mandate to lurk about the place subjecting their physical inferiors to their will.”

    True. Except that this does not really happen in developed capitalist countries in the way your saying. The poor are poor for a wide variety of reasons, not easily reducible to either extreme of “it’s all their own fault” or “they are forced into poverty.”

    And this is the problem with socialism. It assumes a simplicity to the problem of poverty and thus assumes a simplicity to the answer: Tax the rich, redistribute the wealth, or some more radical solution to use force to impose “equality.” But the last 50 or more years of welfare state interventionism has shown that this simplistic solution not only does not work, it can and has made poverty worse in some areas, precisely because the causes of poverty are so many and varied, and state intervention is a blunt instrument, and often leads to unforeseen and entirely new problems. And the more radical solutions led to horrific tyranny and in some cases mass murder on an almost unimaginable scale.

    I don’t think there is any simple solution to poverty, except to encourage people to love their neighbours, and encourage a much greater variety of grass roots initiatives that do not involve the state and which are based on thinking outside the narrow box of the Left-Right spectrum.

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  17. s.russell (1,642 comments) says:

    EAD,
    Perhaps you have not read the full story: it explains that this is happening WITHOUT a credit boom, unlike the last time we had this level of growth.

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  18. s.russell (1,642 comments) says:

    Viking2,
    It appears people are spending more money because they HAVE more money. This does not seem unreasonable.

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  19. wf (441 comments) says:

    ” Those inhabiting the upper echelons of the social order are there, more often than not, as a consequence of birth. ”

    Never there because of talent, a vision, or the ambition to fulfill it?
    Never there because a parent told a child to get an education so he can move up the economic ladder?
    Never there because a young person vowed to avoid the financial trap his parents couldn’t escape?
    Never there because of a zest for adventure and where it might lead?

    Are you suggesting, Yoza, that people like Colville shouldn’t have any enthusiasm for others to succeed as they have done? Aren’t we able to say: hey, I did it, and you could too, it just takes time and effort and a bit of courage.

    Would you rather people stayed in the echelons of social order that they were born into?

    Last night a chap was wailing (on the radio) about there being no jobs for painters in Christchurch and complaining that he had to go on the dole. He was in his early 30’s. When it was suggested that he retrain for something else he railed against “the government” for not providing the job he was used to, and he was appalled that he might be expected to learn something new. The radio host called him a whiner, and hung up.

    Poor fellow, I got the impression that he had never really thought that he COULD ever be anything else but be a house painter and was probably panicked at the thought of trying something new. He would rather go on the dole than risk it. Sad.

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  20. EAD (1,086 comments) says:

    s.russell – Don’t mean to be rude but I suggest you check your figures before you state that NZ is not in a credit boom

    http://www.rbnz.govt.nz/statistics/tables/c3/

    According to the RBNZ, M3 money growth (the line between 12 & 13) has been 7% per annum over the past 2 years, domestic credit growth has been 5% per annum while our government deficit has exploded from $10 billion to $75 billion over the past 6 and what have we got to show for it? Have we got lots of wealth creating assets or have we just blown most of it on consumption and bidding up the prices of existing houses (which doesn’t create any wealth) and other assets?

    The classic sign of a credit boom is the rising costs of living whereas a real productivity boom would actually see prices fall. That is clearly not the case despite the Government telling you inflation is under control.

    When history is written, they will say how unbelievable it was that so many could be fooled by so few for so long and cheerleaders like DPF and Shamubeel Eaqub (who I previously thought was pretty sound??)

    It is a myth that NZ has had fiscal prudence over the National Government 2 terms in office. Arguably they’ve been worse than Labour as they’ve conned people into believing they are good economic managers who at least are clear about their intentions to borrow and spend. It is Alice in Wonderland stuff.

    Viking2 – well said. I think you are one of the best economics commentators on here who understands that economies grow by saving and investing rather than spending, consuming and taking on debt.

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  21. seanmaitland (500 comments) says:

    @EAD – get a grip yourself. If you call continuous zero-budgets “spend” policies, then you don’t have a clue about economics.

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  22. Yoza (1,872 comments) says:

    ShawnLH April 8th, 2014 at 9:28 pm

    &

    wf April 8th, 2014 at 9:57 pm

    You are completely missing the point. I believe people should be rewarded for their efforts, I don’t have a problem with the concept of people enjoying the fruits of their labour. It is when those people, regardless of whether they are there by birthright or through their own efforts, use their wealth and influence to impose social and economic constraints on others by having a disproportionate influence on the decision making processes of the state.

    Accepting the premise of concentrated wealth conferring authority is socially unsustainable as such a system favours those influencing the decision making process at the expense of everyone else. It should not surprise anyone that those at the top are doing so well, it is a predictable consequence of those people pursuing self-serving policies.

    There are going to be devastating social, economic and environmental consequences from attending to the self indulgent belief of the ruling elite that in a finite system there will always be more. That is just how it is.

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  23. EAD (1,086 comments) says:

    @seanmaitland – “zero-budgets”? Those zero-budgets that have seen expenditures rise from $56 billion to $71billion over the past 6 years?

    The beginning of wisdom is to call things by their proper name.

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  24. griffith (1,111 comments) says:

    Unfortunately Yoza they are blind to the fact that resources on earth are finite.
    More and more power into fewer and fewer hands.
    They will continue to blithely eat cake whilst the peasants come to the draw bridge armed with axe and pitchfork..
    The inevitable result of human self interest allowed to flourish unchecked by a currupt society.

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  25. Than (473 comments) says:

    Unfortunately Yoza they are blind to the fact that resources on earth are finite.

    Malthus made the same observation in 1798 and people have been predicting humanity’s imminent doom ever since. So far they’ve been wrong for 216 years and counting.

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  26. RAS (63 comments) says:

    So far they’ve been wrong for 216 years and counting.

    Not just wrong -SPECTACULARLY wrong.
    http://www.gapminder.org/ignorance/
    http://www.bit.ly/17AXhPZ

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