WEBVTT - 'Power prices are the real headline': Why 3% inflation feels worse 0:00:05.519 --> 0:00:05.920 Kiota. 0:00:06.040 --> 0:00:09.200 I'm Chelsea Daniels and this is the Front Page, a 0:00:09.320 --> 0:00:17.200 daily podcast presented by the New Zealand Herald. Inflation has 0:00:17.400 --> 0:00:22.400 risen even further. The latest stats and Z figures show 0:00:22.520 --> 0:00:27.320 inflation reached three percent in the year to September. Economists 0:00:27.400 --> 0:00:30.600 had it tipped to hit the top end of the 0:00:30.640 --> 0:00:34.560 Reserve Bank's target band of between one and three percent, 0:00:35.080 --> 0:00:38.400 but some say the period of circa three percent. 0:00:38.200 --> 0:00:39.480 Could be short lived. 0:00:39.800 --> 0:00:43.320 At the same time, labor has broken its silence on 0:00:43.360 --> 0:00:47.280 what it thinks will help the economy today on the 0:00:47.280 --> 0:00:50.920 front page, ends ed Herald Business Editor at Large Liam 0:00:51.040 --> 0:00:53.640 dan Is with us to break down what all of 0:00:53.640 --> 0:00:59.920 this means for you and your wallet. So, Liam, the 0:01:00.280 --> 0:01:04.559 consumers price index increased three percent in the twelve months 0:01:04.600 --> 0:01:08.840 to September. What has contributed to this increase? 0:01:09.640 --> 0:01:13.320 Yeah, so well, a few really basic things actually that 0:01:13.800 --> 0:01:18.520 will make have made it feel like it's a lot 0:01:18.560 --> 0:01:22.360 worse than three percent. So power prices is the real headline. 0:01:22.440 --> 0:01:25.839 Eleven point three percent I think for the annual rate. 0:01:26.760 --> 0:01:29.800 That was the highest annual increase we've had in New 0:01:29.920 --> 0:01:33.400 Zealand since nineteen eighty nine, so thirty six years. So 0:01:33.720 --> 0:01:36.520 that people really felt that. I mean, bear in mind 0:01:36.520 --> 0:01:38.240 that we've been through this. This is stuff that we've 0:01:38.240 --> 0:01:40.959 already had the headlines of people complaining about the power 0:01:41.000 --> 0:01:43.959 prices and we're just now counting the costs. But we 0:01:44.040 --> 0:01:47.880 had rates up eight point eight percent across the board roughly, 0:01:48.040 --> 0:01:51.280 and they tend to get counted once a year in 0:01:51.320 --> 0:01:54.360 the September quarter, so that's when we see them contribute. 0:01:55.160 --> 0:01:56.400 They're actually were up. 0:01:56.800 --> 0:02:00.080 Twelve something twelve percent the year earlier, but that's still 0:02:00.120 --> 0:02:03.280 a lot. It's still a high increase. And food prices, 0:02:03.320 --> 0:02:05.560 I think we're up four point six percent for the year, 0:02:05.560 --> 0:02:09.079 so that's still ahead of the three percent. People obviously 0:02:09.080 --> 0:02:13.040 have been feeling that with dairy prices, butter beef, some 0:02:13.080 --> 0:02:15.800 of those things that are getting good export dollars for 0:02:15.840 --> 0:02:18.680 New Zealand but are making it painful for shoppers and 0:02:18.680 --> 0:02:20.639 for consumers in the short term. So when you look 0:02:20.639 --> 0:02:24.040 at those three things, they're sort of unavoidable basics for 0:02:24.080 --> 0:02:26.519 a lot of people, especially the power and the food, 0:02:27.040 --> 0:02:33.600 and so yeah, that is a problem, but also it's 0:02:33.840 --> 0:02:35.760 sort of seen by the Reserve Bank is sort of 0:02:36.120 --> 0:02:39.440 a shorter term thing. So I think that three percent 0:02:39.560 --> 0:02:43.640 number has landed where it was largely expected to be 0:02:43.960 --> 0:02:47.200 and shouldn't cause too much problem for the Reserve Bank 0:02:47.320 --> 0:02:51.320 for those looking to hopefully see another interest rate cut. 0:02:51.919 --> 0:02:54.480 Yeah, I mean I saw economists were kind of across 0:02:54.480 --> 0:02:56.480 the board saying it was going to reach that top 0:02:56.600 --> 0:03:00.520 end of the higher bracket that the Reserve wants to 0:03:00.560 --> 0:03:03.040 kind of keep it into. Are you surprised that it's 0:03:03.040 --> 0:03:05.279 not over three percent, to be honest. 0:03:05.919 --> 0:03:07.200 Yeah, it could have been. I mean. 0:03:08.080 --> 0:03:11.120 The other thing is, you know, those power prices. We 0:03:11.200 --> 0:03:14.520 had a high wholesale price, there was weather conditions, but 0:03:14.520 --> 0:03:17.320 we also had a thing that comes through. They do 0:03:17.360 --> 0:03:20.800 a sort of a regulated price increase based on power 0:03:20.919 --> 0:03:23.440 distribution costs and that comes through every five years. So 0:03:23.480 --> 0:03:29.359 that's another one often there. So there's a reasonable you know, 0:03:29.400 --> 0:03:31.560 there's a bit of an increase in tradable inflation, what 0:03:31.560 --> 0:03:35.040 they call tradable inflation, which is those things that we 0:03:35.080 --> 0:03:37.880 don't have much control over in the economy, food and 0:03:37.920 --> 0:03:41.000 power and stuff, but non tradable which is in the 0:03:41.000 --> 0:03:44.160 core of the economy, services, wages, what we're paying each other, 0:03:44.720 --> 0:03:48.000 that is coming down. I mean, that's always a little 0:03:48.000 --> 0:03:51.120 bit higher anyway, but it is coming down quite sharply 0:03:51.120 --> 0:03:53.600 because the economy has been in such bad shape. So 0:03:53.640 --> 0:03:56.680 I think economists could see that the things that push 0:03:56.720 --> 0:04:01.320 prices down, recessionary forces that push prices down are sort 0:04:01.320 --> 0:04:06.560 of happening. So I would say they're fairly confident that 0:04:07.000 --> 0:04:09.160 this will be the peak of this cycle of inflation. 0:04:09.640 --> 0:04:15.360 In terms of how much aren't inflation is imported versus 0:04:15.400 --> 0:04:18.400 domestically generated. What we would you say. 0:04:18.240 --> 0:04:22.800 To that, Well, that that is that split non tradable 0:04:22.839 --> 0:04:27.880 and tradeable. So non tradable inflation tends to run a 0:04:27.880 --> 0:04:31.159 bit higher, but that is coming off tradeable inflation, the 0:04:31.160 --> 0:04:36.159 important inflation. We've had a pretty good year last year 0:04:36.200 --> 0:04:39.440 on that, and that's come back with the food prices 0:04:39.480 --> 0:04:43.080 and things, and so I think, but that some of 0:04:43.080 --> 0:04:45.200 that tradeable inflation. I know we've got to be careful 0:04:45.240 --> 0:04:48.080 because we tried to look through it after COVID and 0:04:48.120 --> 0:04:52.320 it all exploded with inflation keeping on going and going. 0:04:52.360 --> 0:04:55.200 But generally the Reserve Bank does look through that a 0:04:55.240 --> 0:04:58.200 bit more because those are those international prices that are volatile. 0:04:59.200 --> 0:05:03.040 Petrols and obvious one, but food, cobodity prices and some 0:05:03.120 --> 0:05:05.159 of those other imports and things. They go up and 0:05:05.200 --> 0:05:08.000 down a lot, and it would include power prices, and 0:05:09.040 --> 0:05:11.960 that is some means that the Reserve Bank can ignore 0:05:12.000 --> 0:05:14.880 those to some extent and it focuses on something called 0:05:14.920 --> 0:05:17.760 core inflation, which is a measure of inflation where the 0:05:17.800 --> 0:05:21.600 extremes cut off and looking at what it's how it's 0:05:21.640 --> 0:05:24.880 tracking over the long term or medium to long term, 0:05:25.240 --> 0:05:26.520 and they'll be more comfortable with. 0:05:26.520 --> 0:05:30.279 That, right, so the Reserve Bank doesn't seem too spooked 0:05:30.320 --> 0:05:33.600 over there. Should we see another OCR cut next month? 0:05:34.240 --> 0:05:35.280 Yeah, I think we should. 0:05:35.520 --> 0:05:40.240 I think we probably will, whether that's it, and you know, 0:05:40.600 --> 0:05:45.000 if the economy, you know, continues to sort of struggle 0:05:45.040 --> 0:05:47.520 to get going and the recovery hasn't hasn't taken off, 0:05:47.839 --> 0:05:51.480 we might Some economists see some risk of another cut 0:05:51.520 --> 0:05:53.640 maybe in February, or that the Reserve Bank might do 0:05:53.720 --> 0:05:56.200 fifty basis points in November, but. 0:05:57.680 --> 0:05:58.080 I don't know. 0:05:58.120 --> 0:06:01.120 I think there are some signs that it's things are 0:06:01.800 --> 0:06:04.800 starting to turn. A lot of the bad news is 0:06:04.800 --> 0:06:06.440 in the rear vision mirror. It's just the way we 0:06:06.480 --> 0:06:08.960 collect data, so we're seeing it at the tail end. 0:06:09.160 --> 0:06:12.080 You know, unemployment will rise probably in the next lot 0:06:12.120 --> 0:06:14.400 of stats, and it will be ugly as well, so 0:06:14.600 --> 0:06:17.480 you know it's a line call. But the Reserve Bank's 0:06:17.560 --> 0:06:20.680 primary job now single mandate, is to look at inflation. 0:06:20.920 --> 0:06:24.760 So I think probably one more cut and done, and 0:06:24.760 --> 0:06:27.280 they should probably signal to New Zealanders that they feel 0:06:27.279 --> 0:06:30.040 they're done, because that will encourage New Zealanders to lock 0:06:30.120 --> 0:06:33.080 in their interest rates and actually take some of the 0:06:33.120 --> 0:06:37.160 savings and we can all move forward a bit. 0:06:42.839 --> 0:06:45.160 Well, inflation is at three percent, it's within the band 0:06:45.200 --> 0:06:47.760 of the Reserve Bank. Under labor it was at seven 0:06:47.800 --> 0:06:50.800 point three percent, So we have broad inflation down and 0:06:50.880 --> 0:06:54.320 just under eighty months or eighty months two years, and 0:06:54.320 --> 0:06:56.520 that's making a big difference if you care about working 0:06:56.600 --> 0:06:59.840 people and who are doing it really tough. You actually 0:06:59.880 --> 0:07:01.640 met an economy well, and you make sure you get 0:07:01.640 --> 0:07:03.760 spending under controls, so you get inflation under controls, so 0:07:03.800 --> 0:07:06.000 you get interest rates down. That's exactly the path that 0:07:06.040 --> 0:07:08.839 we've been putting in place. So yeah, they wreck the economy. 0:07:08.880 --> 0:07:09.480 Let's be clear. 0:07:09.520 --> 0:07:11.880 They just spent more, tax more, borrowed more, and they'll 0:07:11.880 --> 0:07:14.360 continue to do more of that going forward. But that 0:07:14.480 --> 0:07:16.480 is what caused the pain and suffering that New Zealanders 0:07:16.480 --> 0:07:18.000 are experiencing up and down this country. 0:07:20.680 --> 0:07:24.320 When everyday New Zealand is here that inflation is at 0:07:24.320 --> 0:07:28.120 the top of the target range, what does that actually 0:07:28.240 --> 0:07:29.640 mean for them day to day. 0:07:30.760 --> 0:07:34.880 Well, it's all about those basics, the food and power, rents, 0:07:35.040 --> 0:07:37.559 I mean, rents was actually quite promising. Rents had dropped 0:07:37.560 --> 0:07:39.800 to two point six percent annual increase and if you 0:07:39.840 --> 0:07:43.280 look at it what's happening month or month, it's really 0:07:43.320 --> 0:07:46.000 almost flat to zero. There are parts of the country 0:07:46.040 --> 0:07:50.720 where rents will be coming down, so that's moving with 0:07:50.800 --> 0:07:53.080 the property market and with mortgage rates coming down and 0:07:53.120 --> 0:07:56.800 house prices being subdued. But yeah, I think the trouble 0:07:56.880 --> 0:07:59.440 is for New Zealanders who spend most of their income 0:07:59.520 --> 0:08:02.000 to live, they feel inflation a lot more acutely. 0:08:02.080 --> 0:08:03.640 So if you're if you've. 0:08:03.480 --> 0:08:05.920 Got a lot of money and you've got a lot 0:08:05.960 --> 0:08:08.440 of discretion around you know, most of your spending and 0:08:08.480 --> 0:08:12.400 your core living expenses are only thirty forty fifty percent 0:08:12.440 --> 0:08:14.840 of your total income, then it doesn't matter if it 0:08:14.880 --> 0:08:17.200 goes up three percent or five percent. You've still got 0:08:17.200 --> 0:08:19.440 all this discretion at the top end. But if you're 0:08:19.480 --> 0:08:22.720 spending all your money on living, and particularly if those 0:08:22.720 --> 0:08:25.240 basics have gone up by more than three percent, you know, 0:08:26.560 --> 0:08:29.440 you feel it completely. You feel all the inflation, and 0:08:29.480 --> 0:08:33.120 so it hurts poorer people harder. And look, I think 0:08:33.160 --> 0:08:37.360 New Zealanders more or less didn't really get over the 0:08:37.360 --> 0:08:41.240 inflation shop post COVID. We moved pretty quickly into a 0:08:41.280 --> 0:08:45.680 period of higher dairy prices and meat prices and things. 0:08:46.000 --> 0:08:48.199 And so you know, when you hear New Zealander is 0:08:48.200 --> 0:08:49.960 talking about it, a lot of people still feel like 0:08:50.000 --> 0:08:53.040 we've just had this one long cost of living crisis. 0:08:53.600 --> 0:08:57.160 Do you think the Reserve Bank's current approach strikes the 0:08:57.280 --> 0:09:01.960 right balance between controlling inflation but then also supporting growth. 0:09:03.240 --> 0:09:04.600 I think so. 0:09:04.640 --> 0:09:06.600 I mean, there's an argument that they've been a bit 0:09:06.640 --> 0:09:09.600 slow to get interest rates down. The difficulty is they 0:09:09.600 --> 0:09:12.000 do have a single mandate. They've got a single target. 0:09:12.000 --> 0:09:14.160 The government changed that they used to have a target 0:09:14.200 --> 0:09:18.120 that have a mandate that said you should weigh up 0:09:18.240 --> 0:09:21.800 unemployment and inflation and consider those things. I mean, all 0:09:21.800 --> 0:09:24.960 central banks will consider the big picture. But then if 0:09:25.040 --> 0:09:28.640 your number one job is inflation, you can't take the 0:09:28.760 --> 0:09:32.160 risk that it goes above three percent and becomes embedded 0:09:32.200 --> 0:09:32.920 and gets hard. 0:09:33.000 --> 0:09:34.120 You know, it's hard to. 0:09:34.040 --> 0:09:36.680 Get down and I think central banks around the world 0:09:36.840 --> 0:09:39.520 are a little bit feeling a little bit shell shopped 0:09:39.520 --> 0:09:42.720 after the inflation that we had post COVID when it 0:09:42.720 --> 0:09:45.280 got up to seven nine percent and all that stuff, 0:09:45.600 --> 0:09:47.280 and it got away on us, and they do not 0:09:47.360 --> 0:09:50.400 want to have to go through that kind of cycle 0:09:50.440 --> 0:09:52.400 again where we're having to sort of do things to 0:09:52.400 --> 0:09:54.840 get on top of inflation. So they just had to 0:09:54.840 --> 0:09:59.160 be a bit cautious, unfortunately, and they couldn't just sort 0:09:59.200 --> 0:10:03.400 of slash and burn. But it's looking I think, despite 0:10:03.400 --> 0:10:07.040 this number, in some ways, it's looking a bit safer 0:10:07.040 --> 0:10:07.360 for them. 0:10:07.960 --> 0:10:12.120 You're always so optimistic, though you always try and stay optimistic. 0:10:12.200 --> 0:10:15.600 I mean, realistically, is twenty twenty six going to be 0:10:15.600 --> 0:10:18.640 better or are we still riding the wave up into 0:10:19.040 --> 0:10:21.720 the end of twenty twenty six twenty and then entering 0:10:21.760 --> 0:10:22.560 twenty twenty seven. 0:10:22.679 --> 0:10:25.640 Well it gets a bit painful, actually, because I try 0:10:25.640 --> 0:10:27.640 to be optimistic, but it's just taking so long. 0:10:29.360 --> 0:10:31.160 Even this ra all's going to preak. 0:10:31.240 --> 0:10:34.240 Yeah, and you know you'll see my columns will swing 0:10:34.320 --> 0:10:39.280 between pessimism and optimism. But I think it is the 0:10:39.320 --> 0:10:42.320 conditions are all in place. Interest rates are low enough 0:10:42.320 --> 0:10:45.080 now to start stimulating the economy. There is all that 0:10:45.160 --> 0:10:48.520 export money coming in from the dairy industry, the meat industry, 0:10:49.240 --> 0:10:53.080 Kiwi fruit, even tourism is starting to pick up a bit. 0:10:53.120 --> 0:10:55.960 It's sort of almost back at pre COVID levels, which 0:10:56.040 --> 0:10:59.040 was a you know, a pretty good earner for the country. 0:10:59.080 --> 0:11:05.080 So those things really ought to shift the economy. There's 0:11:05.120 --> 0:11:09.960 a big deficit in confidence, you know, people are businesses 0:11:09.960 --> 0:11:12.600 are ware of investing, people are shell shocked. 0:11:13.400 --> 0:11:13.839 I think. 0:11:14.240 --> 0:11:19.120 Unfortunately, the lagging statistics are things like the jobs, labor 0:11:19.160 --> 0:11:23.199 market liquidations. You know, you're going to still see negative headlines, 0:11:23.200 --> 0:11:25.640 You're going to see more liquidations of businesses. 0:11:25.720 --> 0:11:26.600 Unfortunately, you're going. 0:11:26.520 --> 0:11:31.080 To see more layoffs and rising unemployment, and that will 0:11:31.080 --> 0:11:34.959 sort of keep a dampner on things probably into twenty 0:11:35.040 --> 0:11:39.800 twenty six, just because we won't get statistics you know, 0:11:39.880 --> 0:11:44.120 through for the well if unemployment peaks early next year, 0:11:44.160 --> 0:11:47.440 we won't see those statistics till the middle of next year. 0:11:48.480 --> 0:11:51.080 And I think that's really what's you know, the cost 0:11:51.120 --> 0:11:53.880 of living is one stress, and then the other one 0:11:53.960 --> 0:11:57.000 is people not being secure in their jobs, and so 0:11:57.040 --> 0:11:58.959 people need to be secure in their jobs to start 0:11:58.960 --> 0:12:02.920 spending because the money coming back through lower mortgage rates, 0:12:03.040 --> 0:12:07.360 is going into savings and paying down mortgage while people 0:12:08.080 --> 0:12:10.640 are worry that their earnings might not be around where 0:12:10.640 --> 0:12:13.880 they want them. So it's a slow thing to get 0:12:13.880 --> 0:12:16.320 the momentum rolling and get the confidence back. 0:12:16.400 --> 0:12:19.320 But yeah, I think it will happen. 0:12:26.400 --> 0:12:29.480 As a parent with two young kids, I worry a 0:12:29.520 --> 0:12:31.880 lot about what kind of future they are going to 0:12:31.920 --> 0:12:35.959 inherit from us. Unemployment's going up, inflation is going back 0:12:36.040 --> 0:12:39.439 up again. More and more New Zealanders are simply giving 0:12:39.520 --> 0:12:43.840 up and leaving the country while our economy shrinks, businesses close, 0:12:44.200 --> 0:12:47.760 and opportunities seem to be disappearing. We need to turn 0:12:47.800 --> 0:12:51.000 that around. We need to create a future that young 0:12:51.080 --> 0:12:54.360 New Zealanders will want to be part of. A reason 0:12:54.480 --> 0:12:57.880 for our young New Zealanders to come home after their OI, 0:12:58.240 --> 0:13:01.360 a reason for them to stay in New Zealand because 0:13:01.360 --> 0:13:04.400 they know they can get good, well paid jobs that 0:13:04.520 --> 0:13:07.400 will create the sort of opportunities that they deserve. 0:13:10.000 --> 0:13:12.440 All right, So the Labor Party has announced to this 0:13:12.760 --> 0:13:17.200 New Zealand Future Fund, which it is calling its plan 0:13:17.360 --> 0:13:21.920 to back New Zealand's potential and create secure, well paid 0:13:22.000 --> 0:13:25.080 jobs across the country. It'll do that by investing in 0:13:25.120 --> 0:13:29.760 New Zealand infrastructure and businesses, lift productivity and reinvest by 0:13:29.840 --> 0:13:33.679 seeding capital from a number of Crown assets, independent governance 0:13:33.960 --> 0:13:37.800 of that and protecting core assets from privatization. 0:13:39.240 --> 0:13:44.800 Not a small task, No, yeah, I mean it's a 0:13:44.880 --> 0:13:48.320 it's a big concept. It's a concept that's not new 0:13:48.360 --> 0:13:51.160 in a way. I mean, it's like, it's interesting. This 0:13:51.200 --> 0:13:53.240 is their first bit of economic policy that they put 0:13:53.240 --> 0:13:56.439 out and it's how I described This is going to 0:13:56.440 --> 0:13:59.400 be administered by the New Zealand Superfund, which has got 0:13:59.600 --> 0:14:04.959 you know, billions of billions of dollars and invests wisely 0:14:05.040 --> 0:14:07.760 and sensibly around the world and in New Zealand, but 0:14:07.800 --> 0:14:09.720 doesn't want to go crazy in New Zealand because it 0:14:09.760 --> 0:14:12.200 has to have a balanced portfolio and keep making money. 0:14:13.040 --> 0:14:16.360 But I think that Labour's pitching this these are my words, 0:14:16.360 --> 0:14:18.840 is a kind of a side hustle for the Superfund, 0:14:19.360 --> 0:14:23.160 so that the Superfund would have a sort of like 0:14:23.200 --> 0:14:25.440 a if you think of a big money manager, a 0:14:25.440 --> 0:14:28.160 big fund having a boutique fund off to the side 0:14:28.680 --> 0:14:35.880 that is very specifically for New Zealand businesses that's smart innovation, 0:14:37.360 --> 0:14:40.600 probably tech, but it doesn't specify that exactly. It could 0:14:40.640 --> 0:14:42.960 be for infrastructure and so much more of a New 0:14:43.000 --> 0:14:45.200 Zealand and kind of focus, and you sort of spin 0:14:45.240 --> 0:14:46.800 that off to the side. You have it managed by 0:14:46.800 --> 0:14:51.440 the superfund. You know, they look at countries like Singapore 0:14:51.520 --> 0:14:55.640 do it and they've been very successful and have you know, 0:14:56.400 --> 0:14:58.760 billions of dollars worth of assets. So it's possible that 0:14:58.800 --> 0:15:02.040 what you could you the goal is that you actually 0:15:02.080 --> 0:15:05.600 make money because you're investing in these companies and taking 0:15:05.600 --> 0:15:08.720 a stake as well as providing capital and support for 0:15:08.760 --> 0:15:11.000 them to get going and boost the New Zealand economy. 0:15:12.240 --> 0:15:16.120 The critics will say, and there'll be a hard criticism 0:15:16.240 --> 0:15:19.600 from say the act Party and because they see that 0:15:19.640 --> 0:15:23.760 as government's picking winners and they look at the failures 0:15:23.760 --> 0:15:26.880 over time of governments doing that and sometimes governments get 0:15:26.920 --> 0:15:29.560 it wrong. Why is the government trying to pick one 0:15:29.600 --> 0:15:32.520 company over another and decide which one. Well, mon't be 0:15:32.560 --> 0:15:36.720 the politicians, it'll be a board of investors as part 0:15:36.760 --> 0:15:40.720 of a state fund. But yeah, that's sort of ideologically 0:15:40.720 --> 0:15:42.960 opposed to that. It would sit quite well with the 0:15:43.000 --> 0:15:45.240 way New Zealand first looks at the world in terms 0:15:45.280 --> 0:15:50.320 of a state controlled investment is sort of a mixed model. 0:15:50.800 --> 0:15:55.400 It's capitalism, but it's you know, with a state involvement 0:15:55.480 --> 0:15:56.240 in capitalism. 0:15:56.320 --> 0:15:57.000 Well, I was going to. 0:15:56.960 --> 0:15:59.800 Say, the vibe really does give New Zealand first, not 0:15:59.800 --> 0:16:04.000 the party, but putting New Zealand first, right, Winston would 0:16:04.040 --> 0:16:04.560 quite like. 0:16:04.840 --> 0:16:06.400 Yeah, I mean, I think that'll work. 0:16:06.440 --> 0:16:10.080 I mean, in fact, even National could probably cope with 0:16:10.280 --> 0:16:12.000 this kind of policy if it didn't have to have 0:16:12.080 --> 0:16:14.880 act as a side partner. Because you hear Christopher Luxen 0:16:14.920 --> 0:16:19.800 talk about countries like Singapore and Ireland. You know, all 0:16:19.800 --> 0:16:24.840 these countries that have accelerated their growth with investment and innovation, 0:16:24.960 --> 0:16:27.360 and Singapore is a classic example of one where they 0:16:27.400 --> 0:16:30.640 really they save money and they put money back into 0:16:30.640 --> 0:16:35.160 their own economy and their own tech companies and startups. 0:16:35.160 --> 0:16:37.240 And you know, dare I say, it's kind of a 0:16:37.800 --> 0:16:41.320 you know, it's not the communist Chinese, but it's a 0:16:41.400 --> 0:16:45.960 very modern China does it very intensely as well. Modern 0:16:46.000 --> 0:16:51.760 modern Chinese economy is very focused on picking winners special 0:16:51.840 --> 0:16:55.120 zones where they build industry up and they put government 0:16:55.200 --> 0:16:59.080 money into it. And it's it's a kind of a 0:16:59.160 --> 0:17:03.800 sort of mixed model capitalism with the state involved. I mean, yeah, 0:17:03.960 --> 0:17:06.720 this isn't a sort of a revolutionize the whole economy. 0:17:06.760 --> 0:17:10.160 It's a very specific fund. I guess you know, it's 0:17:10.320 --> 0:17:12.919 it's something that could work, and you leverage off the 0:17:12.960 --> 0:17:16.600 superfund which has got this infrastructure for investment. So you 0:17:16.720 --> 0:17:21.520 keep it very market focused and keep the disciplines there 0:17:21.560 --> 0:17:24.560 to make sure that you're you're not just throwing money 0:17:24.600 --> 0:17:28.120 at things, you're actually investing things in things that will 0:17:28.160 --> 0:17:31.520 deliver a return. It's it's a high risk, higher risk 0:17:31.640 --> 0:17:33.520 area of investment once you get in the closer you 0:17:33.560 --> 0:17:36.680 get to seed funding. You know, it's like venture capital, 0:17:36.720 --> 0:17:39.120 and you're you're you're investing in companies at a very 0:17:39.160 --> 0:17:43.040 early stage, so there's a higher rate of failure. But 0:17:43.400 --> 0:17:46.440 when one takes off and really does well, like literally 0:17:46.480 --> 0:17:49.600 takes off like a rocket lab or going to say, 0:17:51.240 --> 0:17:53.600 it can go on to be worth billions. So so 0:17:53.800 --> 0:17:56.480 you know that the private investors that do that tend 0:17:56.520 --> 0:17:58.840 to have a large portfolio. You need to sort of 0:17:58.840 --> 0:18:01.680 maybe invest fifty things and if one or two of 0:18:01.720 --> 0:18:04.000 them take off, you'll actually make your money back because 0:18:04.000 --> 0:18:06.880 you've structured things in a very clever way. And that's 0:18:07.440 --> 0:18:09.840 what this would need to do. It would need to 0:18:09.880 --> 0:18:15.000 be very focused on sort of market disciplines and have 0:18:15.080 --> 0:18:16.560 a really good investment. 0:18:17.720 --> 0:18:18.040 Team. 0:18:18.280 --> 0:18:21.560 And it's a good idea. I mean, I think that's 0:18:21.600 --> 0:18:22.120 something that. 0:18:22.280 --> 0:18:25.119 Well, it's something that we've looked to Australia. Australia uses 0:18:25.160 --> 0:18:29.480 the super Fun in much more diverse ways than we do, right, 0:18:29.840 --> 0:18:32.280 And it's something that economists have been in toying with 0:18:32.720 --> 0:18:33.679 for years. 0:18:33.760 --> 0:18:36.640 I mean, Labors mentioned the Ossie version and how they 0:18:36.640 --> 0:18:39.199 do it, and they've talked also about pushing the New 0:18:39.320 --> 0:18:42.439 Zealand super Fun to do a bit more infrastructure and 0:18:42.480 --> 0:18:45.040 some of those things. And it does do a decent chunk, 0:18:45.080 --> 0:18:48.960 but its primary job is to earn money for our 0:18:49.000 --> 0:18:52.159 retirement savings, so it has to say a bit more 0:18:52.200 --> 0:18:55.439 balanced and this is probably a way to sort of 0:18:55.920 --> 0:18:56.760 silo out. 0:18:58.080 --> 0:19:01.600 This more sort of New Zealand focused. 0:19:01.280 --> 0:19:05.520 Innovative end steps. Yeah yeah, yeah, yeah, So I mean promising. 0:19:05.560 --> 0:19:07.399 I mean I could, as I say, it's something that 0:19:07.440 --> 0:19:10.280 could be a bipartisan thing. Act would hate it, so 0:19:10.320 --> 0:19:14.679 I can't imagine national getting on board with it. But 0:19:14.840 --> 0:19:17.480 I could imagine somewhere down the line if a Labor 0:19:17.520 --> 0:19:21.119 government introduced this, it wouldn't be removed. 0:19:21.560 --> 0:19:22.160 Put it that way. 0:19:23.040 --> 0:19:26.560 Well, Hopkins has said that Luxe and I quote has 0:19:26.680 --> 0:19:29.680 no plan for our economy and that he is relying 0:19:29.680 --> 0:19:33.359 on house prices, the Reserve Bank and foreign investors to 0:19:33.440 --> 0:19:36.880 turn everything around. What do you make of that statement. 0:19:36.760 --> 0:19:38.200 Well, that's sort of a plan. 0:19:40.720 --> 0:19:44.720 The foreign you know, the foreign investment thing is part 0:19:44.720 --> 0:19:48.640 of the plan that they are trying to so I think, 0:19:48.680 --> 0:19:50.760 you know, to be fair to luxel and that there 0:19:50.840 --> 0:19:53.200 is he would argue that there's very much a plan. 0:19:53.240 --> 0:19:57.520 They want to get the New Zealand economy into good 0:19:57.560 --> 0:20:00.880 shape by dealing with some of the first issues, making 0:20:00.920 --> 0:20:03.760 it a safe, stable place to invest and then get 0:20:03.760 --> 0:20:06.000 out and a tract foreign investment. So they believe that 0:20:06.320 --> 0:20:09.720 foreign investment can really do a lot of the job 0:20:09.760 --> 0:20:13.960 that I guess they was talking about with this, and 0:20:14.080 --> 0:20:15.000 there is a way to do it. 0:20:15.040 --> 0:20:16.240 That's the way Ireland's done it. 0:20:16.280 --> 0:20:17.920 So you probably could just about go, well, there's a 0:20:17.920 --> 0:20:22.040 Singapore model and there's an Irish model. This government hasn't 0:20:22.080 --> 0:20:23.840 got the money to quite do a full Irish model 0:20:23.880 --> 0:20:27.960 because it involves cutting taxes for foreign investors, but it's 0:20:28.000 --> 0:20:31.880 definitely trying to make it New Zealand more attractive for 0:20:31.880 --> 0:20:34.359 foreign investment. They you know, I think it's a bit 0:20:34.440 --> 0:20:36.560 unfair to say they're just relying on house prices because 0:20:36.560 --> 0:20:39.200 you listen to Chris Bishop, he's sticking to his guns 0:20:39.200 --> 0:20:43.360 that the flat to falling house prices are a good thing. 0:20:43.000 --> 0:20:48.280 So look, the reality is house prices come back. It 0:20:48.280 --> 0:20:50.679 probably helps the economy and helps the government. But I 0:20:50.680 --> 0:20:53.560 don't think they're pushing that too hard. I mean, they've 0:20:53.560 --> 0:20:58.120 been prepared to wear a fairly big downturn, so you know, look, 0:20:58.840 --> 0:21:02.159 is there enough of a plan? Well, that's highly debatable, 0:21:02.240 --> 0:21:06.080 but I think some of that was rhetoric from Chris Hipkins. 0:21:06.560 --> 0:21:11.719 Thanks for joining us, Liam Jeers. That's it for this 0:21:11.840 --> 0:21:15.160 episode of The Front Page. You can read more about 0:21:15.200 --> 0:21:19.639 today's stories and extensive news coverage at enzidherld dot co 0:21:19.960 --> 0:21:23.879 dot nz. The Front Page is produced by Jane Ye 0:21:23.880 --> 0:21:28.520 and Richard Martin, who is also our editor. I'm Chelsea Daniels. 0:21:28.960 --> 0:21:32.159 Subscribe to the Front Page on iHeartRadio or wherever you 0:21:32.200 --> 0:21:35.880 get your podcasts, and tune in tomorrow for another look 0:21:35.960 --> 0:21:37.120 behind the headlines.