The Hoon

TLDR: The Kākā’s hoon about the week that was in the podcast above included Peter Bale and me talking with special guest Professor Robert Patman about the latest geo-political and economic fallout from Russia’s war on Ukraine, along with closer looks at Budget 2022 on Thursday, the week’s crypto-crash and double-digit house price deflation.This is our weekly sampler email for both free and paid subscribers.A reminder to free subscribers reading here that we have a special $30 a year deal for under 30s and that students and teachers should sign up for the free tier using their ‘school’ or ‘ac’ email addresses to get converted to the full subscription for free. And we have a new special $65 a year deal for over 65s who are reliant on NZ Superannuation.Five things of note this weekWar in Ukraine generates more inflationGas supplies cut - Russia cut off one gas pipeline through Ukraine and Poland to the rest of Europe, forcing European gas futures prices up more than 20%. Russia also cut off its electricity supplies to Finland after Finland indicated it would formally apply early in the coming week to join NATO. The European Union is close to agreeing a Europe-wide ban on imports of Russian oil by the end of the year.Sweden is also on the verge of joining NATO, which Russia said it would respond to with measures of a “military-technical” nature. Meanwhile, US howitzers are already being used in eastern Ukraine by Ukrainian forces. The M777 155mm howitzer can fire a GPS-guided shell 40km with pinpoint accuracy. Patman talked in the podcast above about these howitzers being reported to have hit targets inside Russian territory.Here, petrol prices rose over $3/litre and all eyes will be on the Government’s Emissions Trading Plan this coming week as to whether it is extended beyond three months. The Emissions Reduction Plan and Health BudgetThe Government will release its Emissions Reduction Plan in a two-hour ‘lockup’ in The Beehive that ends at midday on Monday. I’ll be inside and do a special email as it is released. It is speculated to include an extension of the current half-price discount for public transport and a congestion charge for Auckland. There’s also talk of a congestion charge. I welcome the suggestions for queries in the comments below from paid subscribers.In the Budget itself on Thursday, the Government is expected to focus the bulk of its $6b operating allowance (unchanged from what was announced in December) on funding the Health system restructuring (and tidying up DHB debts and deficits) and leaving the multi-year capital allowance unchanged from December at $9.8b.Double-digit house price deflationThe crypto-crashThis week the algorithmic stable coin Terra-USD collapsed, taking the Luna digital currency with it. The most-used fiat-backed stablecoin Tether also ‘broke the buck’ briefly on Thursday night, although was back at US$1 this morning.I was asked to talk about the collapse on TVNZ’s Q+A yesterday and spoke in a panel discussion with Jack Tame and Rebecca Stevenson. Here’s the full panel sesssion resulting video report:The migration ‘rebalancing’Ka kite anoBernard This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TDLR: This is a podcast of the live weekly ‘hoon’ webinar I do with Peter Bale most Friday afternoons for paid subscribers. This week we spoke about the wealth tax debate, National’s rise above Labour in the polls, the scale of our infrastructure deficit and what’s being done about it, what a higher debt ceiling means and how the war in Ukraine is going. Here’s more detail on what we talked about here:* Te Waihanga’s estimate of our infrastructure deficit and how much more we’d need to build to cope with future population growth, improve our water quality and prepare for climate change ($1t in today’s money over 30 years or a doubling of investment to 10%/GDP per year);* Finance Minister Grant Robertson’s response that such a doubling was not financially or politically possible, and that we can’t build our way out of our infrastructure deficit;* Robertson’s unveiling of a new 30% of GDP debt ceiling, which is effectively 30 percentage points higher than the last one, but that he doesn’t want to use the spare fiscal headroom, yet;* The Government’s decision to freeze new capital spending and leave its $6b operating allowance unchanged in the May 19 Budget to avoid adding to inflation;* Reserve Bank Governor Adrian Orr’s comments that a 30% fall in house prices was feasible and that our banking system could cope with that just fine, along with an estimate that sustainable house prices were 5-20% below current levels in his select committee clashes with Green MP Chloe Swarbrick and National MP Nicola Willis; and,* PM Jacinda Ardern’s painful prevarications and eventual capitulation on whether she would propose a wealth tax in her political lifetime.Enjoy, although please accept my apologies for my poor sound quality this week. I was stuck in my car. And many thanks to the paid subscribers to The Kākā who support this sort of work I do reporting on and analysing issues around the political economy, in particular housing unaffordability, climate change inaction and child poverty.This is a regular recorded podcast open for all subscribers in which I talk with Peter Bale and sometimes guests. The live webinar currently on from 5pm to 6pm on Fridays is open to paid subscribers. A reminder too that we have a special $30 a year deal for under 30s and that students and teachers should sign up for the free tier to get converted to the full subscription for free. And we have a new special $65 a year deal for over 65s who are reliant on NZ Superannuation. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe