NZ Dips into the Double Dip

[wayneL]

The double dip recession is an idea that's been floated regarding the GFC.

NZ has just had a negative quarter. Don't know if that means much on the grand scale of things, but suspect that at least the #'s seem to be honest here.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10678281

An influential survey of business opinion shows the economy contracted in the September quarter after stalling in June.

After contracting 4 per cent in the June Quarterly Survey of Business Opinion, firms' experienced activity fell a further 15 per cent in the September survey.

Seasonally adjusted business confidence fell from a net 26 per cent of respondents positive in June to 9 per cent net pessimistic in September, the first such negative in a year.

 

[Sean K]

The double dip recession is an idea that's been floated regarding the GFC.

I've been reading about pre-emptive money printing elsewhere that should prevent that from the major economies for a little while longer.

Just means the next world dip might be diptacular.

 

[-Bevo-]

Wayne would the Carbon Tax over there play a roll in the double dip, wondering what impact that is having?

 

[Julia]

Wayne would the Carbon Tax over there play a roll in the double dip, wondering what impact that is having?

I'd also be interested, Wayne, in a summary of how the carbon tax (or is it an ETS?) is affecting ordinary householders? Increased electricity prices?
Other impacts?

 

[wayneL]

It's only just come into effect on Oct 1 I think.

Pertol went up 7c with the combined effect of the ETS and GST increase.

I think it will most certainly hit low income households, but I don't think it is the reason for the negative quarter.

My feeling is that NZers (as a gross generality) suffer less status anxiety than say Aussies or Brits and can't be persuaded to spend up on nonsense before they think they are financially ready. There is a sense that GFC is not really over yet, so are being cautious.

Just my opinion FWIW.

 

[poverty]

It's only just come into effect on Oct 1 I think.

Pertol went up 7c with the combined effect of the ETS and GST increase.

I think it will most certainly hit low income households, but I don't think it is the reason for the negative quarter.

It's fairly possible the uncertainty of the impending ETS and price rises would have put a bit of a damper on consumer spending leading up to its introduction.

 

[-Bevo-]

There was abit on the Allan Jones show the other day about the NZ Carbon Tax listen here:

http://www.2gb.com/index2.php?option=com_podcasting&task=playaudio&id=2&f=5&Itemid=41

Also interesting article I found

Expert warns of carbon tax doom

http://www.stuff.co.nz/business/farming/2433413/Expert-warns-of-carbon-tax-doom

 

[Julia]

Also interesting article I found

Expert warns of carbon tax doom

http://www.stuff.co.nz/business/farming/2433413/Expert-warns-of-carbon-tax-doom

Unsurprising article, thanks, Bevo.
And exactly the same principle will affect Australia if we move ahead of global agreement on carbon tax/ETS

The following is an extract from an extensive article on Marius Klopper's recent call for a price to be placed on carbon.

Important questions to ask are:
1. Does BHP really believe man made climate change is real?

2. Does BHP have an informal deal with the government to support a carbon tax in exchange for a watered down resource super profits tax?

3. Does BHP believe the political will is so strong that it might as well accept fate and position itself as best it can for a world in which carbon is taxed?

4. Could BHP actually have vested interest in the introduction of a carbon tax, even if only in the short term?

Another interesting line of thought is that renewable energy sources, despite best intentions, will no time soon replace the burgeoning consumption of conventional primary energy.

As such taxing carbon will achieve little more than a redistribution of wealth. Politically, governments won't survive a tax on carbon, lifting the price of energy to voters, without some form of offset/hand out.

Conventional energy use won't decline, atmospheric carbon dioxide levels won't recede, but another expensive bureaucratic layer to police and redistribute carbon taxes will evolve.

What about Klopper's call for Australia, a pimple on the backside of global carbon emitters, to go it alone and unilaterally lead the world in taxing carbon. Isn't this madness, sending a country already lacking global industrial competitiveness, further up the cost curve?

With acknowledgement to Huntleys "Your Money Weekly" for the above quotes. It's interesting that the writer of the article doesn't even acknowledge the existence of the NZ ETS.

 

[Smurf1976]

If Australia adopts a carbon tax, then for BHP that means they sell more gas locally, and export the coal that would otherwise have been used. Total production of fossil fuels by BHP thus goes up, not down, with a carbon tax. That is a gain for BHP.

In terms of fuel inputs to BHP's mining and smelting operations, they would almost certainly be offset in some way as a trade exposed industry. So no loss there.

BHP doesn't really lose a lot but that is not the case for many other companies, notably the entire manufacturing sector other than specific "trade exposed" industries which qualify for assistance.