Inflation for the year ending June 2022 was 7.3%, exceeding most market expectations.

This is higher than many of our trading partners. Here is NZ against our top 15 trading partners:

1. US 9.1%
2. UK 9.1%
3. Italy 8.0%
4. Thailand 7.7%
5. Germany 7.6%
6. New Zealand 7.3%
7. South Korea 6.0%
8. France 5.8%
9. Singapore 5.6%
10. Australia 5.1%
11. Indonesia 4.4%
12. Vietnam 3.4%
13. Malaysia 2.8%
14. UAE 2.5%
15. China 2.5%
16. Japan 2.5%

So the NZ inflation rate is higher than 10 of our top 15 trading partners and lower than five of them.

Inflation has an international component to it, but the fact we have higher inflation than many of our trading partners is because of our domestic decisions. Non-tradeable inflation is 6.3% – more than double the maximum target of 3%. Thanks Rod and Grant.

A guest post by Owen Jennings:

My neighbour, many moons ago, was an old style socialist.  In the mould of Mickey Savage.  He championed the down and out.  He would have willingly got out of his socks for you. He distrusted control and authority of any sort.  He appreciated the value of democracy. While he worked for equality of outcomes, he saw value in equality of opportunity.

I think of Patrick, often, when I come against those who claim to be “socialists” today.  Because they have few of Patrick’s noble attributes.  Quite the opposite.

It struck me forcibly watching the various reactions to the US Supreme Court decision on Roe v Wade and more recently the Court’s decision to severely clip the wings of the Environmental Protection Authority.  Like it or lump it the Court said, in both instances, “power belongs to the people, not some centralised authority, controlled by elites”.  Generally, the “socialists” went nuts over both decisions.  Washington took a massive hit.

Today’s brand of socialism is totalitarianism.  It is centralised control.  It is disdain for the ordinary people. Whether it is Roe v Wade or Three Waters, it is the elites who want to keep decisions away from the democratic, “every-person-a-vote” approach so they can exercise their superior knowledge, their advanced form of management.  In its simplest form the repudiation of Roe v Wade was about whether the Supreme Court with its narrow focus on the Constitution should make a determination on abortion or whether it was a decision to be made by the states, a decision closer to the people.

It is why the media, accomplices to the current socialist cabal in Wellington, went after Luxon.  Knowing his private views he just might open up the decision in NZ on abortion to the people.  Those ignorant oafs could not be given a say on such a matter. Luxon wondered, for a moment, what had hit him.  He is still making the transition from the boardroom where decision making gravitates up to the top, to politics where decision making best gravitates to the people. Hopefully he is getting the message that he not only works for the ‘shareholders’, they should determine the direction.

The legacy of Ardern and her government will ultimately be seen as a massive power heist. Influence stolen from the people.  From Covid rules to He Pua Pua, from the pathetic attempts to build houses to the doubling of bureaucrats in education, from taxing cow farts to captain’s call on gas exploration, from crudely forcing Te Reo on the population to controlling tenancies, from creating new ministries and building bureaucracies to the demolishing of the DHB’s, from sneaking in union control of wage bargaining to demanding Māori wards almost every major decision involves a shift of power from the people to Wellington.

Such is nature of totalitarianism in a small population the elites have to pull in family members to keep the hoi polloi from the levers of power.  Nepotism is a close colleague of totalitarianism. Two control knobs that the new socialists keep a tight handle on are controlling the narrative and engendering fear.  Most of us are too busy and too disinterested to dig below the story of the day.  Keep up the good news stories, distract when required, buy more allegiance if necessary but do not lose the storyline.  Covid and climate change are godsends for twisting the fear knob.  There is nothing like the ‘end of the world’ and ‘we only have six months to act’ to keep the masses in semi-panic and under the whip.

Ardern has made the most of her PR training to run a clever propaganda program.  Her daily appearances during Covid, her smiles for selfies, her media beat-ups when touring, her shutting down debate with a churlish, “I reject that”, have kept her in the limelight, distracting too many from what has been cooked up by the ransom-holding Māori caucus and the growing arrogance of the Wellington elites.

The hard question is, “will this centralisation be undone?”  Are National working around the clock in their smoke-filled rooms to find ways to return power to the people?  Are there strong, well-considered plans being hatched to de-centralise?  Could you envisage an Orewa speech from Luxon outlining bold plans to cut bureaucracy, establish charter schools very firmly for the long term, bring health care back to the people, localise local bodies, defund the media, and more?

Patrick will not be voting next year.  Wherever he is, votes are not needed.  Were he still here there is one thing certain – he would not be voting for growing centralisation and the power of totalitarianism.  So, who would he vote for?   

A reader writes in:

I don’t know if you have seen this article in Newshub here, but it got my BS detector tingling when I read it.  It’s around Maori suicide rates and the use of maramataka.  It’s written in a pseudo-scientific manner, but it seems to be completely oblivious to what it is actually stating.  Of note, this is a Public Interest Fund article, so probably why it has swallowed down with limited editorial input…

Lines like “In 2018, Solomon and Makiha correlated a decade of coronial suicide data with a Māori lunar calendar and found that many suicides occurred on the new moon and the full moon – 35 percent on the new moon and 16 percent on the full moon” The new moon and full moon are a week,  In this two week period, per month, 51% of the suicides occured. Which hardly speaks to it being a special time of the month for suicides and is, I suspect, well within the bounds of probability that 51% of suicides happen in 2 weeks in every 4.  Without further analysis, I suspect that even the 35% in one period is also not statistically significant.

But what the article is saying is that this pseudo-science woo is going to get government funding.  

What is particularly annoying is that the author of this work (I hesitate to use the word journalist as that implies some degree of critical thinking) has pushed all this out as being a good thing.

I’m not trying to belittle the impact of suicide on any group, as an ex-police officer in the UK, I attended more than I would ever want to and seen the impact on families and friends, but I also don’t believe that pouring money into pseudo-scientific treatments is the way to go, especially when you consider the NZ Govt’s woefully inadequate funding of mental health services across the board.

A guest post by a reader:

“The Minister of Finance, Grant Robertson, has just released one of his most important press releases of the year, perhaps even this term of Government. He has announced the new Board of the Reserve Bank effective 1 July 2022. The statutory remit of the Reserve Bank board is: “overall responsibility for our strategic direction, functions and operations, and ultimate accountability for the delivery of our outcomes.”

One of the most important Board’s in New Zealand and one might expect stacked with the best and brightest economics and financial people in New Zealand, and from our global diaspora. A mix of heavyweight academics at masters, preferably PhD, level in finance and economics with significant research experience in monetary policy or similar. And balanced against that would be business people with heavyweight real world experience in how economies work and how the Reserve Bank can execute its obligations so there’s an environment where businesses can thrive and help create wealth and prosperity for all New Zealanders: people who’ve who have demonstrated an executive ability to understand and drive the economy, not just get appointed to boards.

You be the judge of the four new appointments. Here they are, referencing their Reserve Bank profiles:

• Jeremy Banks: BSc (Hons) in Computer Science from Otago University. Co-founder and CEO of Plink Software, a software company based in Nelson that produces a free te reo learning app, and similar. In 2019 Plink had 4 staff, but I expect its bigger now. A few minor governance roles.
• Professor Rawinia Higgins: Deputy Vice Chancellor Maori at Victoria University with research expertise in Maori language revitalisation, She has a PhD from Otago University, but the subject isn’t disclosed. Based on the disclosed undergraduate qualification and her current role, we can confidently exclude economics or finance.
• Byron Pepper: LLb and Bachelor of Management Studies (Finance) from Waikato University.  22 years with Goldman Sachs in investment banking.
• Hinerangi Raumati-Tu’ua: Masters in Management Studies (university not disclosed) and fellow of Chartered Accountants ANZ. Previous CFO of Tainui Group Holdings and lots of past governance roles in public, Maori and resources sectors.

The continuing members are:

• Prof Neil Quigley: Vice-Chancellor Waikato University. PhD from Toronto University (doesn’t say what in) but has research interests in industrial organisation, money and finance and economic history.
• Susan Patterson: a pharmacist with an MBA from London Business School and lots of Government and mid-level board experience.
• Rodger Finlay: BCA from Otago. An accountant with lots of Government, Maori related and mid-level board experience.

So there you have it, the seven people who the Minister of Finance believes have the collective wisdom and experience to oversee and guide our Reserve Bank. In summary:

• Two accountants who’ve practiced at mid-size domestic entities.
• A software developer running a small business in Nelson.
• Two academics, one with expertise irrelevant to the core role of the Reserve Bank and the other with expertise peripherally relevant.
• One ex-investment banker.
• No-one with a PhD level qualification in a relevant discipline.
• No-one with substantive treasury experience.
• No-one with a senior commercial banking background.
• No-one with senior executive experience (eg CEO or CFO) of a substantial international company, organisation or research entity, or even an NZX10 company like Spark or Fisher & Paykel Healthcare
• At least three with a deep knowledge of Maori custom , knowledge and language.
• An abundance of mid-level and Government governance roles.

Quite frankly, you couldn’t make this up if you tried.

DPF: I would slightly dispute the characterisation of Professor Quigley as only having peripherally relevant expertise as he in fact lectured me in monetary economics at Victoria University. But I agree with the concern expressed by the reader that the board is very light on people with expertise in monetary policy.

A good graphic. Good media companies could use this as a learning tool – how to avoid each of the 33 issues within.

Stuff reports:

Consumer NZ’s product test and studies can be helpful for buyers looking to get the best bang for their buck.

But Re-Stor chief executive Grant Taylor says he believes the watchdog’s testing is flawed, and can damage the public reputation of a poorly scoring brand.

Of course. That is a feature, not a bug.

Consumer recently released its annual laundry detergent findings. It found Re-Stor Concentrated Laundry Detergent Sheets performed poorly. The product was rated lower than a wash with only water, landing it firmly on the “do not buy” list.

Consumer tested 55 detergents. The highest scoring ones got 91%, 88% and 74%. Ecostore which we use got 74%. Re-stor got bottom of all 55 with a score of 26%. Consumer test ten different types of stains for removal including grass, olive oil, tomato, baby food and blood.

Taylor said the brand had done rigorous testing itself, and gathered consumer feedback that had rated it at 4.5/5 on cleaning effectiveness.

Consumer feedback is not scientific. Many users won’t bother giving feedback.

He said the Consumer findings were “historically flawed” and it had misled the public with its pricing statements.

The company is now in clean-up mode – attempting to rectify the negative publicity.

“We’ve contacted Consumer to correct their outlandish comments immediately and will consider taking legal action.”

I have no idea what historically flawed means but I do not that “consider” taking legal action means they won’t.

Consumer NZ product test manager Paul Smith said it was standing by its testing, which was conducted in an independent lab.

“We have been testing laundry detergents for a decade and are proud to provide the results free to the public. We think it is important consumers have an independent source of information about the quality and performance of laundry detergents.”

Independent is the key. This is why I subscribe to Consumer.

Two good article on how woke purity is destroying left or progressive organisations in the US.

Read Politico and The Intercept.

We’ve seen this in the recent abortion debates. Organisations that have spent 50 years labelling themselves as pro-choice, are now saying they are pro-abortion? The difference is huge in terms of trying to attract support. So why have they done this?

Because their woke staff have declared the BIPOC people are so oppressed that abortion is not a choice for them, so it is wrong to refer to wanting to keep abortion legal as pro-choice. Own goal.

NewstalkZB reports:

A woman who was violently assaulted at a bar after CCTV footage of her kissing a man was shared with his partner has lodged a complaint with the Privacy Commission. 

The woman, who doesn’t want to be named, was drinking at The Residence bar in Wellington when she was punched in the head from behind while ordering a drink in October last year. 

Not long before that she’d kissed a man she’d met that night. Unbeknownst to her, a staff member was watching through the closed circuit television cameras and filmed the pair on her phone before sending it to the man’s partner. 

His partner and her friend then stormed the bar and attacked the woman, punching her to the ground where she lost consciousness before waking up in the bathroom. 

Putting aside the privacy issue for now, why did the aggrieved partner assault the woman, instead of the man (her partner)? It is her partner who was cheating on her, not the woman. She only met him that night. She isn’t culpable.

The woman, who suffered a concussion and was unable to work for close to three months, alleges the staff member refused to get her help so she had to call for an ambulance herself. 

“You kissed my mate’s boyfriend, you’re banned and that’s why she hit you. I’ve got footage of you kissing him,” she claims the staff member said. 

The staffer, if this is correct, should surely be sacked,

Matthew Lynn writes at The Telegraph:

This year is shaping up as a terrible one for any ruling party to try and get re-elected

In France, Emmanuel Macron is already a lame duck President after losing his majority in last weekend’s Parliamentary elections. Over in Estonia, the coalition government has collapsed, and Israel is poised for fresh elections.

Chancellor Scholz in Germany and President Biden in the United States may now be waiting to be evicted from office by the electorate, while in Britain the Tories have just lost one of their safest seats in a by-election and don’t look like hanging on to power much longer.

In each country, there are local explanations for why each party is so unpopular. But there is one common, global theme. Inflation.  

Rapidly rising prices are a catastrophe for whichever group of politicians happens to be in power.

Real wages get hammered. Interest rates have to go up, tipping economies into recession and raising unemployment.

Public spending has to be cut to cope with soaring interest and welfare payments. And, perhaps worst of all, governments have no one else to blame as voters work out that printing money for wild spending sprees is what caused the crisis in the first place.

Persistent inflation is caused by monetary policy.

First, once inflation starts to take off real wages inevitably get hammered. We can see that very clearly in the UK, where wages may be rising by 4pc per year, but with inflation now at 9.1pc, the amount that people earn is actually falling by 5pc annually. But the same remorseless logic is taking hold everywhere. In Germany, wages are rising at an average of 3pc but prices are going up by 7.9pc; in the US, wages are up by 3.4pc but prices by 9pc; and in the Netherlands wages are up by 3.8pc but inflation has now gone past 10pc. Living standards are getting squeezed and people are feeling poorer. In many cases, families have to cut back on holidays, new clothes, or even food simply to make ends meet.

And if your answer is to simply put wages up by say 10%, then that itself will fuel more inflation. When you have high inflation there are no good options, just least bad options.

Thirdly, public spending will have to be cut back. When inflation hits the 10pc level, the amount of interest that governments have to pay on all the debt they owe (and most of them owe more money after Covid than at any time since the Second World War) goes up as well. So do many automatic, inflation-linked welfare payments, as we have just seen in the UK with rises in pensions, especially for former public sector workers. The result? There is far less money to be spent on everything else. 

Any chance of NZ getting back into surplus is near zero.

But the harsh truth is that the root cause of the current round of inflation is spending too wildly, and printing too much money, especially during Covid lockdowns that look more and more like a catastrophic mistake. Voters aren’t stupid. They can work that out – and they are not in a mood to either forgive or forget. 

The printing presses went wild and we’re all paying for it now.

Inflation is completely lethal for any party that happens to be in power. Here is a simple prediction. It doesn’t matter whether they are from the left or the right. Over the next three years, not a single ruling party anywhere in the developed world will be re-elected.

A bold prediction.

Stuff reported:

Sir Michael Fowler: architect, politician; b December 19, 1929; d, July 12, 2022.

A charming visionary who transformed Wellington, or a vandal who destroyed a significant chunk of Wellington’s heritage architecture with a cavalier approach to financial accountability.

Sir Michael Fowler, the mayor of Wellington from 1974 to 1983, has died aged 92, with Covid-19. Nearly 50 years after he first took office, it is hard to accurately define his legacy.

His name is forever linked with the city, thanks to the Michael Fowler Centre, and a strong case can be made that he was the most influential mayor the capital has had over the past 100 years.

He was the most substantive Mayor of my lifetime. He defeated six term incumbent Mayor Frank Kitts in 1974 by 367 votes. Kitts had won by a massive 10,000 votes in 1971 and was seen as unbeatable by many.

Fowler beat Kitts again in 1977 by 3,000 votes and won easily in 1980.

He showed the difference one person could make to a city.

Fox News reports:

A British blood donor said he was turned away after refusing to answer a question asking if he was pregnant, citing that he is a man in his 60s, according to reports. 

Leslie Sinclair, 66, told the Daily Mail he has given 125 pints of blood over the past five decades. But on his last trip to a clinic in Stirling, Scotland, he was told to fill out a form that asked if he was expecting a child or had been pregnant in the past six months. 

After noting that he is a male, the clinic staff said they could not accept his blood unless he provided an answer despite a push by officials to attract new blood donors. 

Wokeness strikes again. I guess this means the Pope couldn’t give blood either in case he is pregnant!

On the right sidebar is a counter which shows how many shootings and ram raids there have been since Chris Hipkins became Police Minister. It will be updated regularly.

I strongly encourage people to go to the TV3 website (note need to register) and watch the full interview between Guy Williams and Leo Molloy. I was laughing almost non stop through it.

Leo probably can’t believe his luck that one of the other candidates for Mayor complained about it, as it just resulted in way way more people seeing it.

A copy appears to be on Youtube so have included it below for easy watching.

Anyone who really thinks climate change is an existential threat would not be against nuclear power.

Here is the mean life cycle tonnes of CO2 per GWh:

1. Lignite 1,054
2. Coal 888
3. Oil 733
4. Natural Gas 499
5. Solar 85
6. Biomass 45
7. Nuclear 29
8. Hydro 26
9. Wind 26

Hydro and wind are great but they are weather dependent. Nuclear is almost as low emissions as them, and is not weather dependent.

Brooke van Velden released:

“After capitulating to squatters at Ihumātao, and stopping 480 houses from being built, Labour says it’ll take 6.5 years to figure out what to do with the land,” says ACT Deputy Leader and Housing spokesperson Brooke van Velden.

“The Government made a $29.9 million agreement with taxpayers’ money to buy the land at Ihumātao from Fletcher’s. This is same Government that spent its time in Opposition complaining about the housing crisis, only to do nothing but make it worse when it got into Government.

It has taken them 18 months just to agree who will be on he working group, and the group has five years to recommend a plan. Even by Labour’s standards this is very slow.

The Herald reports:

The National Party says the European Union free trade agreement is a “step forward” but farmers here have “every right” to feel let down as agriculture has been largely left out.

Trade spokesman Todd McClay gave the deal a “6 out of 10”, given major wins for kiwifruit, seafood and Pharmac.

“It is a good agreement. It is a step forward. There are many parts of the economy that will benefit from this. It does allow us to take steps forward with the European Union.”

He said he would not have “walked away”, but would have kept the negotiations going around meat and dairy open.

He also cautioned the wider implications in terms of the precedent it set in negotiations with other countries and the missed opportunity for diversifying further away from China.

It’s probably the best that could be achieved considering how wedded the EU is to protectionism in primary industries.

It is a shame they are, because geopolitically the smartest thing right now would be a giant free trade zone between the EU, US, UK, Australia, NZ, Canada, Japan and South Korea – basically the liberal democratic countries.

By blocking us greater access to EU markets, the EU is leaving us more vulnerable to China. When China does the equivalent of Russia and Ukraine, we will be very painfully exposed. If the EU wants us to stand up for liberal democratic values, they need to help us be less reliant on China.

The results of the first ballot are:

1. Rishi Sunak 88
2. Penny Mordaunt 67
3. Liz Truss 50
4. Kemi Badenoch 40
5. Tom Tugendhat 37
6. Suella Braverman 32
7. Nadhim Zahawi 25
8. Jeremy Hunt 18

So Zahawi and Hunt are out. No candidate got over 25% of the vote so it is pretty open.

You need to get 34% of the vote which is 120 MPs to make the final two. Would be hard to see Sunak not making the final two, so the question is who will make the final two with him. It is almost certain to be a woman.

Stuff reports:

Parliament is set to appoint a new Independent Commissioner into Parliamentary Standards in a bid to improve MP behaviour and accountability.

The newly created commissioner job was recommended by the damning 2019 Francis Review into Parliament’s culture and MP behaviour. The recommendation was adopted by the Parliamentary Service Commission, a cross-party committee that considers the services provided to MPs and parliament.

The new person will be able to “receive, investigate, and resolve complaints about conduct of Members’ of Parliament which do not align with the Behavioural Statements for the Parliamentary Workplace.”

The commissioner will also produce an annual report which will keep a count of complaints and any “systemic issues” in the system.

“This role has been established as part of our commitment to improving the culture of Parliament,” Speaker of the House Trevor Mallard said.

“The nature of Parliament means there are power imbalances here, and we must keep them in check. Establishing this role guarantees another channel through which staff can confidentially raise concerns about members’ conduct.”

The appointment will be made for five years by the speaker on the recommendation of the commission and the party leaders

This seems like a good step forward. The person appointed will be critical to its success.