1
00:00:00,040 --> 00:00:03,480
Speaker 1: U sounding of warning bells over our public finances and

2
00:00:03,560 --> 00:00:07,120
Speaker 1: its long term fiscal forecast today this is their sixth edition.

3
00:00:07,640 --> 00:00:11,520
Speaker 1: If the government made no changes to current settings, net

4
00:00:11,600 --> 00:00:14,760
Speaker 1: core Crown debt would hit two hundred percent of GDP

5
00:00:14,960 --> 00:00:18,119
Speaker 1: by twenty sixty five. That's largely down to the aging population,

6
00:00:18,520 --> 00:00:22,480
Speaker 1: health costs, record levels of government spending. Brad Olsen, Informetric's

7
00:00:22,520 --> 00:00:26,200
Speaker 1: principal economists with us Hey, Brad good evening. So it's

8
00:00:26,200 --> 00:00:31,040
Speaker 1: interesting that some things they have in the most recent

9
00:00:31,120 --> 00:00:34,880
Speaker 1: reports sort of over estimated or underestimated. One of those

10
00:00:35,240 --> 00:00:38,839
Speaker 1: was the impact of migration on those super costs.

11
00:00:40,200 --> 00:00:43,280
Speaker 2: Yes, that's right, although realistically, when you look through the numbers,

12
00:00:43,320 --> 00:00:45,800
Speaker 2: you've still got some pretty ugly challenges coming up for

13
00:00:45,880 --> 00:00:48,680
Speaker 2: the country when it comes to the cost of everything.

14
00:00:48,720 --> 00:00:50,559
Speaker 2: And I guess, look, the worry a little bit is

15
00:00:50,560 --> 00:00:53,000
Speaker 2: that we've had these warnings before. We had something very

16
00:00:53,000 --> 00:00:56,400
Speaker 2: similar from the Treasury four years ago in twenty twenty one,

17
00:00:57,080 --> 00:00:59,880
Speaker 2: and realistically, I think what the Treasury is continuing to

18
00:01:00,080 --> 00:01:02,600
Speaker 2: highlight is that there's a lot of big challenges in

19
00:01:02,600 --> 00:01:05,000
Speaker 2: front of us. We don't have to solve them all tomorrow,

20
00:01:05,040 --> 00:01:07,520
Speaker 2: but we really do have to start sometime soon to

21
00:01:07,520 --> 00:01:10,600
Speaker 2: get us out of what looks like a very unsustainable

22
00:01:10,640 --> 00:01:13,920
Speaker 2: pathway going forward. But and here's the biggest kicker for me.

23
00:01:14,440 --> 00:01:17,920
Speaker 2: You can't do any one thing and it will magically

24
00:01:17,959 --> 00:01:20,240
Speaker 2: solve our sort of fiscal challenges. There's a lot that's

25
00:01:20,280 --> 00:01:23,039
Speaker 2: going to have to happen that will be unpalatable to

26
00:01:23,160 --> 00:01:26,360
Speaker 2: politicians across the political spectrum, but by goodness, we've got

27
00:01:26,400 --> 00:01:27,119
Speaker 2: to start soon.

28
00:01:27,760 --> 00:01:30,320
Speaker 1: Is in every country and would they not be getting

29
00:01:30,319 --> 00:01:31,080
Speaker 1: the same report?

30
00:01:32,400 --> 00:01:35,040
Speaker 2: Oh, they probably are getting the same report. But again

31
00:01:35,600 --> 00:01:38,080
Speaker 2: I think probably for New Zealand when we're looking at

32
00:01:38,080 --> 00:01:40,959
Speaker 2: some of these factors, we know that and Treasury has

33
00:01:41,000 --> 00:01:43,959
Speaker 2: highlighted this in their analysis, that we continue to have

34
00:01:44,040 --> 00:01:46,880
Speaker 2: to pay something like ten percent of GDP every decade

35
00:01:46,880 --> 00:01:49,760
Speaker 2: for the various economic crises that come up. Yes, other

36
00:01:49,800 --> 00:01:52,400
Speaker 2: countries have also got to pay for that, but Treasury

37
00:01:52,480 --> 00:01:56,280
Speaker 2: is now highlighting that considering where debt actually is more

38
00:01:56,280 --> 00:02:00,200
Speaker 2: around forty three percent of GDP that originally expects did

39
00:02:00,240 --> 00:02:02,320
Speaker 2: if you go back in time, that we'd currently be

40
00:02:02,360 --> 00:02:05,240
Speaker 2: sitting around twenty three percent. So we've eroded our savings

41
00:02:05,240 --> 00:02:08,440
Speaker 2: and buffers for stuff. Yes, other countries are also wearing it,

42
00:02:08,480 --> 00:02:11,120
Speaker 2: but again, we've sort of got a look after ourselves

43
00:02:11,160 --> 00:02:13,120
Speaker 2: start with, and at the moment we're not on a

44
00:02:13,160 --> 00:02:14,079
Speaker 2: sustainable path.

45
00:02:14,440 --> 00:02:17,720
Speaker 1: What did you make of Anna Bremen, the appointment of

46
00:02:17,800 --> 00:02:20,959
Speaker 1: the two ic to the Central Bank in Sweden being

47
00:02:21,000 --> 00:02:24,120
Speaker 1: appointed to head our reserve bank from December.

48
00:02:25,120 --> 00:02:27,920
Speaker 2: Look, I thought it was a very smart, pragmatic appointment.

49
00:02:28,760 --> 00:02:33,000
Speaker 2: She has, of course a PhD in economics from Stockholm University.

50
00:02:33,480 --> 00:02:37,400
Speaker 2: You know, she's got the ability the nolse to take

51
00:02:37,480 --> 00:02:40,880
Speaker 2: on board the challenge that is a central bank. And

52
00:02:40,960 --> 00:02:43,320
Speaker 2: I think importantly when she was asked around what she

53
00:02:43,400 --> 00:02:45,160
Speaker 2: wants to do, what she's going to do in the role,

54
00:02:45,480 --> 00:02:48,760
Speaker 2: her immediate first answer was I need to keep a

55
00:02:48,800 --> 00:02:51,960
Speaker 2: laser focus on in fation and keeping that low and stable.

56
00:02:52,160 --> 00:02:54,120
Speaker 2: And that was exactly what we needed to hear. But

57
00:02:54,200 --> 00:02:57,520
Speaker 2: it was reassuring that that really is that the immediate

58
00:02:57,560 --> 00:03:01,160
Speaker 2: focus for the Reserve Bank governor come out in. Of course,

59
00:03:01,480 --> 00:03:05,920
Speaker 2: she does come in after the last monetary policy announcement

60
00:03:06,000 --> 00:03:08,760
Speaker 2: for the year, so she'll only be starting to assist

61
00:03:09,040 --> 00:03:11,800
Speaker 2: or be part of those interest rate setting discussions from

62
00:03:12,240 --> 00:03:16,200
Speaker 2: February twenty twenty six. It does sort of suggest that, look,

63
00:03:16,200 --> 00:03:18,799
Speaker 2: we've got a few interest rate cuts that are likely

64
00:03:18,840 --> 00:03:21,000
Speaker 2: to come through before she takes up her appointment, but

65
00:03:21,440 --> 00:03:24,320
Speaker 2: does give I guess, give her the summer time to

66
00:03:24,320 --> 00:03:26,120
Speaker 2: get her head around sort of where the New Zealand

67
00:03:26,120 --> 00:03:29,079
Speaker 2: economy sitting and hopefully hit the ground running as we

68
00:03:29,160 --> 00:03:31,920
Speaker 2: head into the new year with some pretty big challenges

69
00:03:31,960 --> 00:03:33,080
Speaker 2: and a lot of uncertainty.

70
00:03:33,120 --> 00:03:36,400
Speaker 1: Still, Yeah, it's conceivable that her first vote might be

71
00:03:36,600 --> 00:03:39,800
Speaker 1: to hold if all the cutting is done this year,

72
00:03:39,920 --> 00:03:42,720
Speaker 1: and of come February next year, when.

73
00:03:42,880 --> 00:03:46,119
Speaker 2: That's that's exactly right. And I think I mean one

74
00:03:46,160 --> 00:03:48,320
Speaker 2: thing though, and that's why it might be important to

75
00:03:48,360 --> 00:03:50,320
Speaker 2: have her on board for that first discussion of a

76
00:03:50,360 --> 00:03:53,560
Speaker 2: hold is because she's been pretty clear, not only today

77
00:03:53,600 --> 00:03:56,160
Speaker 2: but actually in a lot of her analysis that she's

78
00:03:56,240 --> 00:03:59,680
Speaker 2: done in her current role around the importance of transparency

79
00:03:59,720 --> 00:04:02,000
Speaker 2: from central banks and that look, there's a lot of

80
00:04:02,080 --> 00:04:04,680
Speaker 2: uncertainty and challenge out there, but central banks have got

81
00:04:04,680 --> 00:04:07,200
Speaker 2: to communicate well with the public, they've got to communicate

82
00:04:07,200 --> 00:04:10,240
Speaker 2: well with financial markets about all of those tricky things.

83
00:04:10,280 --> 00:04:13,200
Speaker 2: And I think again that focus, alongside what she's saying

84
00:04:13,200 --> 00:04:16,040
Speaker 2: around inflation, they're very much striking the right tone so

85
00:04:16,160 --> 00:04:16,920
Speaker 2: early in the piece.

86
00:04:17,080 --> 00:04:21,560
Speaker 1: Yeah, absolutely, our Brad appreciate that Brad Olsen, Infometric Principal Economists.

87
00:04:21,080 --> 00:04:24,080
Speaker 2: With us for more from Heather Duplessy Allen Drive.

88
00:04:24,240 --> 00:04:25,640
Speaker 1: Listen live to news talks.

89
00:04:25,640 --> 00:04:28,839
Speaker 2: It'd be from four pm weekdays, or follow the podcast

90
00:04:28,960 --> 00:04:29,960
Speaker 2: on iHeartRadio