Pressure Point: When Accountants Reign Supreme

This entry was posted in Governance, Listener on 23rd May 1998 by Brian Easton.

Listener 23 May, 1988.

Keywords: Governance;

As Lady Bracknell could have said “to lose one could be regarded as a tragedy, to lose two looks like carelessness.” She may well have been speechless learning that Auckland has had three major outages this decade with perhaps two more to come. The recent loss of power to Auckland’s CBD follows a national power shortage of 1992, and a Auckland-wide water shortage. Experts tell me that the Auckland sewerage system is close to capacity, non-experts draw the same conclusion about the Auckland roading. Just how many cases of infrastructural overload does there have to be before a pattern is acknowledged?

That Sinking Feeling: on Track to Contraction?

This entry was posted in Listener, Macroeconomics & Money on 9th May 1998 by Brian Easton.

Listener 9 May, 1998.

Keywords: Macroeconomics & Money;

Readers of this column will be less surprised than most at the increasingly gloomy state of the New Zealand economy. In a September 1997 column I discussed the expected deterioration in the current of account of the balance of payments. Then the external deficit was running near 5 percent of GDP. The latest figure is 7.7 percent of GDP, which traditionally would be of crisis proportions. Rather than the usual rapid collapse of the exchange rate (or the government defending the existing level by selling foreign exchange), the rate is steadily sinking. Under our floating exchange rate regime, foreign exchange transactors can take forward cover (that is purchase contracts which guarantee they can withdraw New Zealand currency at a fixed rate in the future). This smooths any precipitate descent, so the rate sinks over a long period rather than plummets over a short period.