August 20, 2024 • 11 mins
THE BEST BITS IN A SILLIER PACKAGE (from Wednesday's Mike Hosking Breakfast) Banks Aren't the Only Ones/Nor Is Power/Nor Is Insurance/Just Build a Bridge
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Speaker 1 (00:09):
You're listening to a podcast from News Talks EDB. Follow
this and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:26):
There and welcome to the Rewrap for Wednesday, all the
best bits from the micclassing breakfast on News Talks.
Speaker 3 (00:30):
EDB in a Cilia package.
Speaker 2 (00:32):
I am Glen Hart and today it's the Big Ripoff
Podcast for you. We're going to do a deep dive
into all the various ways we're being ripped off at
the moment.
Speaker 3 (00:46):
I'm sure that'll be enjoyable. I won't give them all.
Speaker 2 (00:48):
Away, will sort of reveal them as the podcast goes on,
but it will finish up with an interesting railway crossing story.
But yes, as you may have suspected, the first way
we're being wrapped off as by the banks.
Speaker 3 (01:01):
And there's a Comuist commissioned report that says so.
Speaker 4 (01:04):
Big Report day for big issues. Report number two the
Electricity Authority and Power will come to that later on.
Report number one, the ComCom and the business of banking.
The market doesn't work. More banks would help. How to
get more banks, how to get less regulation, how to
get better deals for the customer. Firstly, don't hold your breath.
The ComCom has looked into power, petrol, banking, supermarkets, not
(01:25):
a lot changes. Nikola Willis didn't help yesterday morning when
she said, in response to a perfectly legitimate question about
lending practices, that a bank ceo had said they weight
farms differently from houses in terms of risk. Willis said, well,
they can tell that to the Select Committee, which, as
far as I could work out, means nothing, and given
I'm sure they will. Then, when asked about the banking
lobby being powerful, she said they may be powerful, but
(01:49):
democracy is more powerful. Once again, it means nothing. What
she said and was avoiding was the question will you legislate,
And she was avoiding that because she's not legislating the
same way the previous government made a lot of noise
about supermarkets and petrol, but we're never going to legislate either. Instead,
what we got was a sign on the footpath showing
the ninety eight price and a grocery commissioner who so
(02:09):
far is limited to press releases. Here's your trouble. We
have a lot of banks, we just don't use them.
We can switch banks, we choose not to. Yes, the
rules the Reserve Bank has in place to make banks
hold money could be changed. Some of the regulation could
be changed, but will it materially fix the market.
Speaker 2 (02:24):
No.
Speaker 4 (02:25):
This, as I always say, is not to defend banks.
Banks are highly profitable, their margins are higher here than Australia.
That's a talking point. But the mistake that is made
almost every time, whether it's bank supermarkets or petrol stations
or telcos, is the hype never plays out in reality.
The jawboning gets the headlines, the action fades into obscurity.
Let's talk in a year and you can show me
(02:46):
how fundamentally different the banking scene is or not.
Speaker 2 (02:51):
Yeah, let's not rite it off yet, just because it's
never worked with anything else. But the first fight is
solving a problem as an admitting that you've got on. Is
that how it goes rewrap anyway, So there was a
general sort of theme comparing banking with power generation, and
(03:14):
that sort of carried on throughout the morning.
Speaker 4 (03:15):
One of the things the government argued yesterday is what
we want with this open banking. Open banking won't work.
And you know why it won't work because we have
got open electricity movement in the electricity market. You've got
people changing companies left, right and center. It's not hard
to change an electricity company, and people are fabulous. Has
that made the electricity market workable?
Speaker 2 (03:33):
No.
Speaker 4 (03:34):
On the same day they were telling us how if
you could just swap banks, it would make so much difference.
They put out another report on the power business where
you can swap companies and it's made no difference. Joined
some dots.
Speaker 2 (03:48):
Mike did a lot of that, pointing at the table,
banging the table thing today.
Speaker 3 (03:56):
He's very, very worked up. I'm worry he's going to eat.
I mean, he's pretty brittle, he's gonna.
Speaker 2 (04:00):
You know, he's Oh guy, he's way older than I am.
Speaker 3 (04:04):
You might just break their finger off one of these mornings.
Speaker 1 (04:07):
Reround anyway.
Speaker 2 (04:08):
Yeah, he went into greater detail with what he meant
about for the power market.
Speaker 4 (04:12):
So report number two came to us from the Electricity Authority,
the EA, and it told us the power market is
a bit of a mess and those gent tailors cremit.
This is not news. Of course, a lot of people
who try and the retailers in the power market can't
make ends meet because the gent tailor messes with the
market makes it too hard to succeed when you are
making the power And then also selling it at retail.
Why would you cut a deal with a person who
(04:34):
merely wants to sell it alongside you. What you do,
according to the report, is you keep your profits back
in the generation side of the equation. Look like you're
competing with the other retailers on a level playing field. Interestingly,
the power market has a couple of things the banking
market might learn from. Unlike banking, a lot of people
switch power providers. It's easy and the churn is high.
People do it all the time. But does that make
(04:55):
your power better or the market more efficient? Apparently not,
Given we're having reports and we have upset, so open
banking might not be the panacea they hope it is.
There is seemingly no real barrier a retail entry in
this country. We have lots of play, has lots of choice.
Has that helped apparently not. You might find the same
thing in banking, and in that I suspect is the
real lesson here. It's industry whack a mole For everything
(05:18):
theoretically good, you can point to a problem like banking,
the power market is broken. The gent taylors, of course,
have a defense. They are taking their money and they're
investing in renewables, and to a degree they're right. They are.
But and this is where the previous government caused the problem.
By obsessing about renewables, we discovered that they don't work
because they're not reliable. So what's reliable? Gas and coal?
(05:39):
Hate coal? Stop looking for gas. Now we have no
gas and we've never burned more coal. So in that sense,
the market is broken. It doesn't fundamentally, no matter who
owns it or runs it, produce what we actually want
and most importantly, when we actually need it. And like banking,
reports are easy to write and scraps within the industry
are easy to have. The big question is what does
(06:02):
the government do and do they have the legislative gonads
to do it or is this just another report that
ends up?
Speaker 2 (06:09):
You know, he was sticking a lot of things where
the sun don't shine today, and it always says that
at the same time as he folds up and screws
up the paper, which makes me thinks that he's sticking
the paper where the sun doesn't shine.
Speaker 3 (06:21):
And the risk of paper cuts in a place where you.
Speaker 2 (06:24):
Don't want them is ah, it makes me once every
time just thinking about it. Re wrap, yes, so not
just banking and power generation. It's not just those industries
that seem to be ripping us off. In the Great
Ripoff podcast this morning, one of the listeners made sure
(06:45):
that they reminded us about another one.
Speaker 4 (06:47):
My insurance in this country is worse than banking. Only
two major companies is compared with four banks, all Australia
known Trundy. You should say that. So I'm reading this
article once again in Australia. Yesterday Sun Corp, who run
Amy and Gio and that part of the will, but
here they run vo aa, Estra on et cetera. They
were busy telling us how they need to keep on
putting up premiums because despite the fact that the weather
(07:07):
had settled down a bit in the past five years,
they had seven hundred thousand claims costing more than nine
billion dollars. Our reinsurances become more expensive. So we accept
all of that. Fair enough. They're facts and figures. You
can't argue with them. Input costs whatever that means, had
added a billion to the company's bottom line. Higher insurance
costs had been the biggest contributor to inflation. Annual inflation
as done on Australia at three point eight are the
(07:29):
most recent consumer price index figures for insurances at fourteen
I mean they're as bad as local councils peak of
sixteen point four. So, in other words, unlike everything else
in inflationary that's inflationary at sixteen point four peak that
not come down, there are only at fourteen percent in
home insurance. They're saying it's a more complex area because
what we're discovering in Australia is water damage inside the home.
(07:50):
And here's the interesting one severe fire losses. Now, why
are they're having severe fire losses lithium batteries. When a
lithium batteries burns, it burns everything. You can't put it out.
It's hard work. They've also got problems with Flexi water
pipes that were installed more than a decade ago, and
the Flexi water pipes are bursting now apparently very Wellington. Anyway,
(08:11):
in twenty twenty four, Sun Corp, and I'm building up
to this, twenty twenty four sun Corp had eight hundred
and twenty natural disasters that cost more than ten million dollars.
So all of this is fantastic. So they're saying, look,
we can't help it. We'd love to charge your left
but we simply can't because times are difficult. We've got
all these flexy pipes, We've got all these lifting and
batteries blowing up from all your evs and your rescooters.
(08:31):
So what do you want us to do? Having announced
all of that, they then say their full year net
profit was up by twelve percent to one point two
billion dollars. Talk about shoot yourself on the foot at
the end.
Speaker 2 (08:51):
Oh yeah, we've got banking electricity insurance that we didn't
even I don't even really think we spent much time
on supermarkets or petrol today.
Speaker 3 (09:05):
Maybe we'll come back and do those once tomorrow.
Speaker 2 (09:08):
We did manage to had both councils and oh one
other one while we were at it.
Speaker 4 (09:14):
Key we Rail propose closing Judge Road. Where's Judge doesn't matter,
happens to be a master's in But anyway, they proposed
closing the road. Everyone in the community went nuts and went,
that's a dead end road. What's the point of that,
you idiots, Let's keep it open. Key we Rail said, sure,
no problem at all, and here's where the stitch up is.
Typically it would cost three hundred thousand dollars to upgrade
a simple rural crossing in this case something a bit
(09:35):
more sophisticated, a high traffic crossing be about one point
three million dollars. Argue around those numbers if you want,
seems a lot of money to me. Anything that KiwiRail
does involves a lot of money, if not crashing a boat,
but that's probably another subject anyway. So it wasn't, as
it turns out, three hundred thousand dollars or indeed one
point three million. It started looking like it could be
two million dollars, and the council started to get a
(09:55):
little bit worried about this. But then when the final
bill came back quote unquote from Key we rail, we
have now had the work properly costed in that is
the clue. Did they properly cost it or did they
just jack it up to a point where they got
their way knowing full well when they went back with
the final number to the council of the council go
we don't have that sort of money and we certainly
can't expect the rate payers to pay for it. That's
(10:15):
what the that's what the Deputy mayor Bex said, Bex Johnson,
she said, we certainly can't expect the rate payers to
pay for that. The final bill was not three hundred thousand,
or indeed one point three million. That's just a crossing.
Remember it's just a crossing, not a rocket ship to
the moon. It wasn't even two million. Came in at
four point eight million. Four point eight million, quick question,
Who do you think is taking the purse?
Speaker 3 (10:36):
Yeah, that price.
Speaker 2 (10:37):
You do think maybe we could just build a bridge
over the railway line and not worry about the actual
crossing at that point, don't you.
Speaker 3 (10:47):
Okay, well, let's.
Speaker 2 (10:48):
Take a breath, settle down, and we'll come back and
try again tomorrow, and hopefully everything will be fair and
just and we'll be paying, you know, just what everything's
actually worth.
Speaker 3 (10:58):
See you then.
Speaker 1 (11:06):
For more from News Talk Said listen live on air
or online, and keep our shows with you wherever you
go with our podcasts on iHeartRadio.
You're listening to a podcast from News Talks EDB. Follow
this and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:26):
There and welcome to the Rewrap for Wednesday, all the
best bits from the micclassing breakfast on News Talks.
Speaker 3 (00:30):
EDB in a Cilia package.
Speaker 2 (00:32):
I am Glen Hart and today it's the Big Ripoff
Podcast for you. We're going to do a deep dive
into all the various ways we're being ripped off at
the moment.
Speaker 3 (00:46):
I'm sure that'll be enjoyable. I won't give them all.
Speaker 2 (00:48):
Away, will sort of reveal them as the podcast goes on,
but it will finish up with an interesting railway crossing story.
But yes, as you may have suspected, the first way
we're being wrapped off as by the banks.
Speaker 3 (01:01):
And there's a Comuist commissioned report that says so.
Speaker 4 (01:04):
Big Report day for big issues. Report number two the
Electricity Authority and Power will come to that later on.
Report number one, the ComCom and the business of banking.
The market doesn't work. More banks would help. How to
get more banks, how to get less regulation, how to
get better deals for the customer. Firstly, don't hold your breath.
The ComCom has looked into power, petrol, banking, supermarkets, not
(01:25):
a lot changes. Nikola Willis didn't help yesterday morning when
she said, in response to a perfectly legitimate question about
lending practices, that a bank ceo had said they weight
farms differently from houses in terms of risk. Willis said, well,
they can tell that to the Select Committee, which, as
far as I could work out, means nothing, and given
I'm sure they will. Then, when asked about the banking
lobby being powerful, she said they may be powerful, but
(01:49):
democracy is more powerful. Once again, it means nothing. What
she said and was avoiding was the question will you legislate,
And she was avoiding that because she's not legislating the
same way the previous government made a lot of noise
about supermarkets and petrol, but we're never going to legislate either. Instead,
what we got was a sign on the footpath showing
the ninety eight price and a grocery commissioner who so
(02:09):
far is limited to press releases. Here's your trouble. We
have a lot of banks, we just don't use them.
We can switch banks, we choose not to. Yes, the
rules the Reserve Bank has in place to make banks
hold money could be changed. Some of the regulation could
be changed, but will it materially fix the market.
Speaker 2 (02:24):
No.
Speaker 4 (02:25):
This, as I always say, is not to defend banks.
Banks are highly profitable, their margins are higher here than Australia.
That's a talking point. But the mistake that is made
almost every time, whether it's bank supermarkets or petrol stations
or telcos, is the hype never plays out in reality.
The jawboning gets the headlines, the action fades into obscurity.
Let's talk in a year and you can show me
(02:46):
how fundamentally different the banking scene is or not.
Speaker 2 (02:51):
Yeah, let's not rite it off yet, just because it's
never worked with anything else. But the first fight is
solving a problem as an admitting that you've got on. Is
that how it goes rewrap anyway, So there was a
general sort of theme comparing banking with power generation, and
(03:14):
that sort of carried on throughout the morning.
Speaker 4 (03:15):
One of the things the government argued yesterday is what
we want with this open banking. Open banking won't work.
And you know why it won't work because we have
got open electricity movement in the electricity market. You've got
people changing companies left, right and center. It's not hard
to change an electricity company, and people are fabulous. Has
that made the electricity market workable?
Speaker 2 (03:33):
No.
Speaker 4 (03:34):
On the same day they were telling us how if
you could just swap banks, it would make so much difference.
They put out another report on the power business where
you can swap companies and it's made no difference. Joined
some dots.
Speaker 2 (03:48):
Mike did a lot of that, pointing at the table,
banging the table thing today.
Speaker 3 (03:56):
He's very, very worked up. I'm worry he's going to eat.
I mean, he's pretty brittle, he's gonna.
Speaker 2 (04:00):
You know, he's Oh guy, he's way older than I am.
Speaker 3 (04:04):
You might just break their finger off one of these mornings.
Speaker 1 (04:07):
Reround anyway.
Speaker 2 (04:08):
Yeah, he went into greater detail with what he meant
about for the power market.
Speaker 4 (04:12):
So report number two came to us from the Electricity Authority,
the EA, and it told us the power market is
a bit of a mess and those gent tailors cremit.
This is not news. Of course, a lot of people
who try and the retailers in the power market can't
make ends meet because the gent tailor messes with the
market makes it too hard to succeed when you are
making the power And then also selling it at retail.
Why would you cut a deal with a person who
(04:34):
merely wants to sell it alongside you. What you do,
according to the report, is you keep your profits back
in the generation side of the equation. Look like you're
competing with the other retailers on a level playing field. Interestingly,
the power market has a couple of things the banking
market might learn from. Unlike banking, a lot of people
switch power providers. It's easy and the churn is high.
People do it all the time. But does that make
(04:55):
your power better or the market more efficient? Apparently not,
Given we're having reports and we have upset, so open
banking might not be the panacea they hope it is.
There is seemingly no real barrier a retail entry in
this country. We have lots of play, has lots of choice.
Has that helped apparently not. You might find the same
thing in banking, and in that I suspect is the
real lesson here. It's industry whack a mole For everything
(05:18):
theoretically good, you can point to a problem like banking,
the power market is broken. The gent taylors, of course,
have a defense. They are taking their money and they're
investing in renewables, and to a degree they're right. They are.
But and this is where the previous government caused the problem.
By obsessing about renewables, we discovered that they don't work
because they're not reliable. So what's reliable? Gas and coal?
(05:39):
Hate coal? Stop looking for gas. Now we have no
gas and we've never burned more coal. So in that sense,
the market is broken. It doesn't fundamentally, no matter who
owns it or runs it, produce what we actually want
and most importantly, when we actually need it. And like banking,
reports are easy to write and scraps within the industry
are easy to have. The big question is what does
(06:02):
the government do and do they have the legislative gonads
to do it or is this just another report that
ends up?
Speaker 2 (06:09):
You know, he was sticking a lot of things where
the sun don't shine today, and it always says that
at the same time as he folds up and screws
up the paper, which makes me thinks that he's sticking
the paper where the sun doesn't shine.
Speaker 3 (06:21):
And the risk of paper cuts in a place where you.
Speaker 2 (06:24):
Don't want them is ah, it makes me once every
time just thinking about it. Re wrap, yes, so not
just banking and power generation. It's not just those industries
that seem to be ripping us off. In the Great
Ripoff podcast this morning, one of the listeners made sure
(06:45):
that they reminded us about another one.
Speaker 4 (06:47):
My insurance in this country is worse than banking. Only
two major companies is compared with four banks, all Australia
known Trundy. You should say that. So I'm reading this
article once again in Australia. Yesterday Sun Corp, who run
Amy and Gio and that part of the will, but
here they run vo aa, Estra on et cetera. They
were busy telling us how they need to keep on
putting up premiums because despite the fact that the weather
(07:07):
had settled down a bit in the past five years,
they had seven hundred thousand claims costing more than nine
billion dollars. Our reinsurances become more expensive. So we accept
all of that. Fair enough. They're facts and figures. You
can't argue with them. Input costs whatever that means, had
added a billion to the company's bottom line. Higher insurance
costs had been the biggest contributor to inflation. Annual inflation
as done on Australia at three point eight are the
(07:29):
most recent consumer price index figures for insurances at fourteen
I mean they're as bad as local councils peak of
sixteen point four. So, in other words, unlike everything else
in inflationary that's inflationary at sixteen point four peak that
not come down, there are only at fourteen percent in
home insurance. They're saying it's a more complex area because
what we're discovering in Australia is water damage inside the home.
(07:50):
And here's the interesting one severe fire losses. Now, why
are they're having severe fire losses lithium batteries. When a
lithium batteries burns, it burns everything. You can't put it out.
It's hard work. They've also got problems with Flexi water
pipes that were installed more than a decade ago, and
the Flexi water pipes are bursting now apparently very Wellington. Anyway,
(08:11):
in twenty twenty four, Sun Corp, and I'm building up
to this, twenty twenty four sun Corp had eight hundred
and twenty natural disasters that cost more than ten million dollars.
So all of this is fantastic. So they're saying, look,
we can't help it. We'd love to charge your left
but we simply can't because times are difficult. We've got
all these flexy pipes, We've got all these lifting and
batteries blowing up from all your evs and your rescooters.
(08:31):
So what do you want us to do? Having announced
all of that, they then say their full year net
profit was up by twelve percent to one point two
billion dollars. Talk about shoot yourself on the foot at
the end.
Speaker 2 (08:51):
Oh yeah, we've got banking electricity insurance that we didn't
even I don't even really think we spent much time
on supermarkets or petrol today.
Speaker 3 (09:05):
Maybe we'll come back and do those once tomorrow.
Speaker 2 (09:08):
We did manage to had both councils and oh one
other one while we were at it.
Speaker 4 (09:14):
Key we Rail propose closing Judge Road. Where's Judge doesn't matter,
happens to be a master's in But anyway, they proposed
closing the road. Everyone in the community went nuts and went,
that's a dead end road. What's the point of that,
you idiots, Let's keep it open. Key we Rail said, sure,
no problem at all, and here's where the stitch up is.
Typically it would cost three hundred thousand dollars to upgrade
a simple rural crossing in this case something a bit
(09:35):
more sophisticated, a high traffic crossing be about one point
three million dollars. Argue around those numbers if you want,
seems a lot of money to me. Anything that KiwiRail
does involves a lot of money, if not crashing a boat,
but that's probably another subject anyway. So it wasn't, as
it turns out, three hundred thousand dollars or indeed one
point three million. It started looking like it could be
two million dollars, and the council started to get a
(09:55):
little bit worried about this. But then when the final
bill came back quote unquote from Key we rail, we
have now had the work properly costed in that is
the clue. Did they properly cost it or did they
just jack it up to a point where they got
their way knowing full well when they went back with
the final number to the council of the council go
we don't have that sort of money and we certainly
can't expect the rate payers to pay for it. That's
(10:15):
what the that's what the Deputy mayor Bex said, Bex Johnson,
she said, we certainly can't expect the rate payers to
pay for that. The final bill was not three hundred thousand,
or indeed one point three million. That's just a crossing.
Remember it's just a crossing, not a rocket ship to
the moon. It wasn't even two million. Came in at
four point eight million. Four point eight million, quick question,
Who do you think is taking the purse?
Speaker 3 (10:36):
Yeah, that price.
Speaker 2 (10:37):
You do think maybe we could just build a bridge
over the railway line and not worry about the actual
crossing at that point, don't you.
Speaker 3 (10:47):
Okay, well, let's.
Speaker 2 (10:48):
Take a breath, settle down, and we'll come back and
try again tomorrow, and hopefully everything will be fair and
just and we'll be paying, you know, just what everything's
actually worth.
Speaker 3 (10:58):
See you then.
Speaker 1 (11:06):
For more from News Talk Said listen live on air
or online, and keep our shows with you wherever you
go with our podcasts on iHeartRadio.
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