Hive News Thursday: Peters ramps up attacks on migration policy; Labour says just 18 afffordable houses built in Auckland SHAs

NZ First leader Winston Peters. Copyright Lynn Grieveson / Hive News

My apologies for a later than usual email this morning as I am travelling. I chaired a session at the Commission for Financial Capability-OECD Global Symposium on Financial Education where Paul Goldsmith and Diane Maxwell spoke, among others.

Especially for email subscribers, look out below for a sneak preview of my weekend column from that symposium.

Meanwhile, Tuesday's migration announcement and Auckland's ongoing housing supply shortages continued to dominate the political and economic debates in Wellington.

Yesterday Michael Woodhouse admitted on RNZ that the abandoned parents of new permanent residents were costing the Government tens of millions of dollars a year.

Winston Peters piled on with more criticism of the Government's changes, saying the temporary suspension of applications from parents for permanent residency was only a half-hearted attempt to deal with the problem.

“They have ‘temporarily’ stopped new applications while they deal with a backlog of way over 2,000 applications,” Peters said, adding 70% were from China.

“The National Government brought this influx of parental unification on by naively believing the promises of applicants, and then allowing one country, China, to make most of the applications. As a result, the New Zealand taxpayer has been faced with huge costs – hundreds of thousands of dollars per individual – for medical care and other benefits," he said.

“The government has failed spectacularly in trying to tie migrant parents to a financial commitment for their residency. Thirty-one per cent of migrants bringing parents in have abandoned this country and dumped their parents on the New Zealand taxpayer."

Labour says just 18 affordable houses built in Auckland SHAs

Elsewhere, Labour released data from the Auckland Council under the OIA showing just 18 affordable houses had been built in Auckland's Special Housing Areas, although it also showed 1,029 had been consented.

Little raised the issue in Parliament, prompting John Key to describe the number as "dodgy."

A debtogenic environment

Two apparently unrelated things happened in the first week of October that say so much about New Zealand these days.

Firstly, the world's two biggest 'fast fashion' chains, H&M and Zara, opened their first shops in New Zealand, creating the sorts of scenes we've never seen before. Hundreds of people queued up to be at the opening of these stores at the Sylvia Park mall in Mt Wellington, generating wall-to-wall media coverage and the sort of enthusiasm and fandom usually reserved for pop stars.

A google news search for these store openings shows there have been at least 1,130 articles or references to them in New Zealand media in the last month. I know of one young woman who travelled from Tauranga especially to be at the H&M store opening and was happy to queue for hours to get into the store and was happy to queue for another hour for changing rooms once inside the store.

As a boringly-dressed 49 year old man I, of course, have no idea what is going on here, but I'm reliably informed (by the NZ Herald's live blog of the Zara opening last Thursday) that there were frenzied scenes. Over 300 people queued and there was applause and a rush for the racks when the door opened.

Remember, these were people queuing to pay money for clothes that can be bought any day of the week, from any computer on the planet, and there is no shortage of choice. This is not queuing for bread in a war zone. This was an active choice by sane people who were willing to take time of out of their busy days to enthusiastically consume. Something in the air (and most probably Facebook) informed and enthused these people to do this. It might be advertising or word of mouth or social media or mainstream media attention. Whatever it was, it's now all around us, wrapped up and embedded in New Zealand's economic and human geography.

Secondly, four days after the H&M opening and the day before the Zara opening, Treasury published a paper on the rise in New Zealand's household debt to record high levels relative to income. It's fair to say there were no queues outside the Treasury's doors at the bottom of The Terrace in Wellington for its release.

It showed household debt actually fell relative to incomes for a couple of years after the Global Financial Crisis of 2008 as we pulled our heads in and saved after a shock, but that we got back on the spending horse in earnest from 2014 onwards. Our household debt to income ratio of 165% is now around 5% above those previous highs of 2008 and rising quickly as debt rises around twice as fast as incomes. That speed of growing indebtedness is not much worse than the bad old days of 2002 to 2007 when New Zealand went on its biggest ever debt-funded spending spree.

This week I attended an OECD conference on saving that was hosted in Auckland by New Zealand's Commission for Financial Capability. The opening speaker was an economic anthropologist, Ida Rademacher, from America's Aspen Institute.

She spoke about how international researchers were starting to look at the issue of debt and saving in a similar way to those who study obesity epidemics. Our western society has created an environment full of cues and prompts to encourage us to eat high energy food as often and as cheaply as possibly -- an obesogenic environment.

It has also created an environment, an economic geography, that encourages us to spend money we don't have.

"We've created an environment that really facilitates overeating and I'm thinking there's a very parallel piece where we've created an environment which facilitates overspending," Rademacher said.

She pointed to how human geographers in Britain were now conducting studies of a 'debtogenic' environment that has developed in some cities that were now packed with betting shops, payday lenders, clothes shops and ads to encourage spending.

"There's this idea that we have made it so easy with the financialisation of our world. It's so easy to spend. It's like the eskimos have 18 words for snow and none for other things. I think we have a 1,000 words for spending and very few for saving, so there's a lot of ways we have to change the environment to make it as easy to save as it is to spend," she said.

"There's ways you can look at obesity epidemics as being very similar in terms of what do we have to do around changing the systems and the culture, and not just the information, so different choices are not just possible, but different choices are being normalised."

Forty years ago most shopping malls and pubs and offices were full of smoke and cigarettes could be bought easily and much more cheaply at any dairy. After decades of legal, political and social changes, smoking is no longer 'normal'.

No one at the queues at Sylvia Park was smoking, but they were spending money, and many were spending money they didn't have.

Have a great day

cheers
Bernard