1 00:00:07,080 --> 00:00:07,480 Speaker 1: Kyoda. 2 00:00:07,520 --> 00:00:10,720 Speaker 2: I'm Chelsea Daniels and this is the Front Page, a 3 00:00:10,840 --> 00:00:18,480 Speaker 2: daily podcast presented by the New Zealand Herald. The Reserve 4 00:00:18,520 --> 00:00:22,160 Speaker 2: Bank has delivered their last judgment on the official cash 5 00:00:22,239 --> 00:00:27,720 Speaker 2: rate and surprise, surprise, there's been no change. The Reserve 6 00:00:27,800 --> 00:00:31,000 Speaker 2: Bank still says it won't be cutting rates anytime soon, 7 00:00:31,320 --> 00:00:34,400 Speaker 2: but economists believe that such a cut will need to 8 00:00:34,400 --> 00:00:38,479 Speaker 2: come later this year. It comes as the economic outlook 9 00:00:38,520 --> 00:00:41,400 Speaker 2: for New Zealand continues to look bleak and more people 10 00:00:41,400 --> 00:00:45,080 Speaker 2: are heading overseas or to the job seeker Q. Today 11 00:00:45,080 --> 00:00:47,280 Speaker 2: on the Front Page, we're joined by ends at Herald 12 00:00:47,360 --> 00:00:51,040 Speaker 2: Business Editor at Large Liam Dan to discuss what the 13 00:00:51,080 --> 00:01:00,120 Speaker 2: OCR rate says about the state of our economy. Can 14 00:01:00,160 --> 00:01:03,080 Speaker 2: you just remind us what the purpose of the official 15 00:01:03,200 --> 00:01:07,400 Speaker 2: cash rate or OCR announcements are? What does it dictate 16 00:01:07,440 --> 00:01:08,280 Speaker 2: in our economy? 17 00:01:08,640 --> 00:01:12,760 Speaker 3: What effectively dictates the cost of borrowing in the economy 18 00:01:13,080 --> 00:01:16,120 Speaker 3: and the value of saving? I guess because it's the 19 00:01:16,160 --> 00:01:18,480 Speaker 3: interest rate, the official interest rate going up and down, 20 00:01:18,520 --> 00:01:20,920 Speaker 3: the one that does the most to determine what the 21 00:01:20,959 --> 00:01:23,120 Speaker 3: banks are going to charge us for our mortgage or 22 00:01:23,120 --> 00:01:26,440 Speaker 3: give us on our deposits. If we've got savings. What 23 00:01:26,480 --> 00:01:32,640 Speaker 3: that does is effectively allow the economy to speed up 24 00:01:32,720 --> 00:01:35,240 Speaker 3: and get more active if interest rates are low, because 25 00:01:35,280 --> 00:01:38,920 Speaker 3: it's cheaper to borrow and do things and less lucrative 26 00:01:38,959 --> 00:01:40,400 Speaker 3: to keep money in the bank. And of course, if 27 00:01:40,440 --> 00:01:42,520 Speaker 3: you push interest rates up, as they have done in 28 00:01:42,560 --> 00:01:46,119 Speaker 3: the last year or so, then it's harder to borrow 29 00:01:46,160 --> 00:01:48,920 Speaker 3: and it's harder for business to do stuff. You see, 30 00:01:48,920 --> 00:01:52,320 Speaker 3: the housing markets slow down, so the economy slows, people 31 00:01:52,400 --> 00:01:54,680 Speaker 3: save more, and all of that adds up to taking 32 00:01:54,680 --> 00:01:57,480 Speaker 3: inflation out of the economy, whereas low interest rates tend 33 00:01:57,560 --> 00:01:59,920 Speaker 3: to make things more inflationary. 34 00:02:00,280 --> 00:02:04,680 Speaker 2: Unsurprisingly, the ocr remains unchanged at five point five percent 35 00:02:04,760 --> 00:02:08,240 Speaker 2: for the eighth consecutive time. I guess this isn't a 36 00:02:08,320 --> 00:02:11,040 Speaker 2: big surprise, is it. But what is their strategy for 37 00:02:11,160 --> 00:02:12,760 Speaker 2: keeping things so rigid? Well? 38 00:02:12,760 --> 00:02:15,639 Speaker 3: I think the strategy is that they've pushed the rate 39 00:02:15,760 --> 00:02:19,240 Speaker 3: up to really suck the life out of the economy 40 00:02:19,280 --> 00:02:21,280 Speaker 3: or the activity out of the economy, and really try 41 00:02:21,280 --> 00:02:23,520 Speaker 3: and hit that high inflation. But they know that it 42 00:02:23,600 --> 00:02:26,519 Speaker 3: takes quite some time for that to work because we're 43 00:02:26,520 --> 00:02:29,040 Speaker 3: all on our fixed mortgages, you know, So people have 44 00:02:29,120 --> 00:02:31,080 Speaker 3: two year mortgage at fixed mortgages and so on. So 45 00:02:31,080 --> 00:02:33,040 Speaker 3: it takes a long time for that sort of pain 46 00:02:33,880 --> 00:02:36,520 Speaker 3: from the higher interest rates to flow through to people's pockets. 47 00:02:36,560 --> 00:02:39,359 Speaker 3: And that's obviously happening now. It's been over a year 48 00:02:39,400 --> 00:02:43,080 Speaker 3: we've been at this peak of five five. But you know, 49 00:02:43,680 --> 00:02:46,240 Speaker 3: they got their fast and then they decided they want 50 00:02:46,320 --> 00:02:48,960 Speaker 3: to wait and watch the economy and see how quickly 51 00:02:49,000 --> 00:02:51,200 Speaker 3: inflation was coming out. But you know, there's a risk 52 00:02:51,240 --> 00:02:53,520 Speaker 3: it's a balancing act if they go too high. If 53 00:02:53,520 --> 00:02:56,120 Speaker 3: they kept going, they'd certainly squash inflation, but they might 54 00:02:56,160 --> 00:02:58,280 Speaker 3: push the economy into such a deep recession that we 55 00:02:58,280 --> 00:03:01,320 Speaker 3: were stuck there for longer than we'd like. And of 56 00:03:01,320 --> 00:03:03,120 Speaker 3: course if they don't they cut to early, or they 57 00:03:03,120 --> 00:03:06,320 Speaker 3: don't go high enough, then you know, the inflation just 58 00:03:06,400 --> 00:03:07,519 Speaker 3: keeps simmering away. 59 00:03:08,320 --> 00:03:10,919 Speaker 2: Is there any sign of movement on their side around 60 00:03:10,960 --> 00:03:12,320 Speaker 2: future interest rate cuts? 61 00:03:12,440 --> 00:03:15,040 Speaker 3: Yeah, well that was probably the big news from the 62 00:03:15,080 --> 00:03:19,079 Speaker 3: announcement yesterday. So the tone, you know, we knew that 63 00:03:18,760 --> 00:03:21,760 Speaker 3: the rate wasn't going to be moved, but you get 64 00:03:21,760 --> 00:03:25,320 Speaker 3: the statement from the Reserve Bank and everyone's pouring over 65 00:03:25,400 --> 00:03:28,960 Speaker 3: every word of that statement for clues, and there's a 66 00:03:28,960 --> 00:03:31,560 Speaker 3: few lines there that suggests that they're softening their stants, 67 00:03:31,560 --> 00:03:34,840 Speaker 3: that they are seeing some signs that the pain is 68 00:03:35,080 --> 00:03:37,200 Speaker 3: moving through the economy quite quickly. There was a really 69 00:03:37,240 --> 00:03:40,320 Speaker 3: grim business confidence survey, for example, and so that's, you know, 70 00:03:40,680 --> 00:03:42,920 Speaker 3: just a few things in the tone of the language 71 00:03:43,000 --> 00:03:45,360 Speaker 3: used by the Reserve Bank and this latest announcement have 72 00:03:45,560 --> 00:03:48,600 Speaker 3: convinced the economists and the markets that we're going to 73 00:03:48,640 --> 00:03:52,400 Speaker 3: get rate cuts sooner than the Reserve Bank has previously forecasts. 74 00:03:52,400 --> 00:03:55,800 Speaker 3: They've got forecasts out there a sort of September next year, 75 00:03:56,080 --> 00:03:58,880 Speaker 3: which seems pretty tough. No one's really believed it. But 76 00:03:58,920 --> 00:04:01,360 Speaker 3: this is the first time we've seen the Reserve Bank 77 00:04:01,920 --> 00:04:04,680 Speaker 3: offer some sort of signs that maybe they are softening 78 00:04:04,720 --> 00:04:09,200 Speaker 3: their stance and perhaps we're heading to more like cuts 79 00:04:09,240 --> 00:04:12,080 Speaker 3: in November or February, which is where most of the 80 00:04:12,080 --> 00:04:14,240 Speaker 3: bank economists are picking things at the moment. 81 00:04:16,600 --> 00:04:19,120 Speaker 4: Well, certainly we've seen data in the last couple of 82 00:04:19,160 --> 00:04:23,080 Speaker 4: weeks suggesting that there's not as much additional inflation pressure 83 00:04:23,360 --> 00:04:26,560 Speaker 4: in the economy. That's a good news story, and certainly 84 00:04:26,600 --> 00:04:30,599 Speaker 4: some economic forecasters have been pulling back their expectations, with 85 00:04:30,839 --> 00:04:33,440 Speaker 4: at least a couple now picking that November would be 86 00:04:33,480 --> 00:04:36,640 Speaker 4: the first interest rate cut. To be fair, we're still 87 00:04:36,720 --> 00:04:38,560 Speaker 4: a little bit in the dark as to how much 88 00:04:38,920 --> 00:04:40,920 Speaker 4: and how the Reserve Bank can flip flop from one 89 00:04:41,040 --> 00:04:44,200 Speaker 4: end to the other so quickly, and we're not therefore 90 00:04:44,200 --> 00:04:47,039 Speaker 4: confident in knowing if we're going to keep getting that 91 00:04:47,200 --> 00:04:49,920 Speaker 4: consistent view or if things might change again in six 92 00:04:49,960 --> 00:04:50,520 Speaker 4: weeks time. 93 00:04:54,279 --> 00:04:57,000 Speaker 2: Why is there this big divide at the moment between 94 00:04:57,040 --> 00:04:59,200 Speaker 2: the bank and economists, Like you said, the bank is 95 00:04:59,320 --> 00:05:02,560 Speaker 2: still saying September next year, but economists are predicting what 96 00:05:02,680 --> 00:05:06,080 Speaker 2: November ish. Why is there such a big gap. 97 00:05:06,560 --> 00:05:09,760 Speaker 3: Yeah, it's interesting because it sort of seems very confusing 98 00:05:10,000 --> 00:05:13,680 Speaker 3: to the outside public looking and I'm sure I think 99 00:05:13,800 --> 00:05:15,520 Speaker 3: you know, well, some people would say that it shouldn't 100 00:05:15,520 --> 00:05:18,520 Speaker 3: be there, and that maybe the markets and the economists 101 00:05:18,520 --> 00:05:21,120 Speaker 3: are too optimistic, and maybe the Reserve Bank's too pessimistic, 102 00:05:21,120 --> 00:05:24,039 Speaker 3: and they've got to come together. There's an element of 103 00:05:24,080 --> 00:05:26,960 Speaker 3: the Reserve bank caution being built into the where the 104 00:05:26,960 --> 00:05:30,240 Speaker 3: Reserve Bank forecast things, you know, the bank economists and 105 00:05:30,560 --> 00:05:33,960 Speaker 3: the market investors who sort of set the daily price 106 00:05:34,000 --> 00:05:37,640 Speaker 3: of future interest rates, they're e actively taking bets and 107 00:05:37,680 --> 00:05:40,360 Speaker 3: the economists are taking a punt and is they haven't 108 00:05:40,360 --> 00:05:41,880 Speaker 3: got skin in the game, so they can change their 109 00:05:41,880 --> 00:05:45,880 Speaker 3: forecast very quickly at any time. Whereas the Reserve Bank 110 00:05:46,160 --> 00:05:47,719 Speaker 3: has to get it right. They have to send the 111 00:05:47,760 --> 00:05:50,479 Speaker 3: right signals. And the signal they've wanted to send is 112 00:05:50,520 --> 00:05:55,000 Speaker 3: that they're all about squashing inflation. They're giving inflation no quarter. 113 00:05:55,160 --> 00:05:58,320 Speaker 3: They are far more concerned about inflation than they are 114 00:05:58,400 --> 00:06:01,440 Speaker 3: about the downturn to the economy. That was the signal. 115 00:06:01,640 --> 00:06:04,159 Speaker 3: And of course we don't get a full another full 116 00:06:04,160 --> 00:06:06,680 Speaker 3: set of forecasts from the Reserve Bank until their full 117 00:06:06,920 --> 00:06:10,560 Speaker 3: monetary policy statement in August, but the tone in this 118 00:06:10,600 --> 00:06:13,279 Speaker 3: one was enough that I think it's being read as 119 00:06:13,400 --> 00:06:17,520 Speaker 3: a slight pivot towards that softer stance and moving towards 120 00:06:18,080 --> 00:06:20,840 Speaker 3: where the rest of the market sees things might land. 121 00:06:21,200 --> 00:06:24,520 Speaker 2: If I had a mortgage and I was following these 122 00:06:24,600 --> 00:06:27,720 Speaker 2: ocr rates in these and it remains unchanged, and I'm 123 00:06:27,760 --> 00:06:29,640 Speaker 2: looking at what the economists are saying and what the 124 00:06:29,680 --> 00:06:33,240 Speaker 2: Reserve Bank is saying, How will it affect my back pocket? 125 00:06:33,520 --> 00:06:34,680 Speaker 2: What should I be looking for? 126 00:06:35,040 --> 00:06:38,440 Speaker 3: Well, I guess you know, when you refix, you're taking 127 00:06:38,480 --> 00:06:40,719 Speaker 3: a bit of a punt on what you think might 128 00:06:40,800 --> 00:06:42,719 Speaker 3: happen to interest rates in the future. I mean, I 129 00:06:42,720 --> 00:06:46,320 Speaker 3: would caution that people should certainly fix their rate for 130 00:06:46,360 --> 00:06:50,080 Speaker 3: their own personal circumstances and how much they can afford, 131 00:06:50,120 --> 00:06:52,000 Speaker 3: and how much they can afford. If the rate was 132 00:06:52,040 --> 00:06:54,120 Speaker 3: to not come down, you wouldn't want to bet on 133 00:06:54,160 --> 00:06:56,720 Speaker 3: it coming down because something could happen, you know, oil 134 00:06:56,760 --> 00:07:00,200 Speaker 3: prices could spike or something like that that requires the 135 00:07:00,240 --> 00:07:04,000 Speaker 3: Reserve Bank to change its mind again. But you know, overall, 136 00:07:04,080 --> 00:07:07,200 Speaker 3: I think it looks like you can sort of start 137 00:07:07,279 --> 00:07:11,120 Speaker 3: to assume that we're on track as of today. Anyway, 138 00:07:11,200 --> 00:07:13,520 Speaker 3: it looks like we're on track for rates to start 139 00:07:13,600 --> 00:07:18,000 Speaker 3: easing probably early next year. You know, I'm just weary 140 00:07:18,000 --> 00:07:21,280 Speaker 3: of anyone sort of betting on future movements because you 141 00:07:21,400 --> 00:07:24,080 Speaker 3: need to be aware that things can change overnight. You know, 142 00:07:24,120 --> 00:07:27,760 Speaker 3: the geopolitical situation, all sorts of things can unwind it. 143 00:07:27,880 --> 00:07:31,080 Speaker 3: The standard model would be to sort of probably fix 144 00:07:31,120 --> 00:07:32,880 Speaker 3: a bit shorter now if it was coming up, and 145 00:07:32,920 --> 00:07:34,920 Speaker 3: not get locked into sort of The banks do tend 146 00:07:34,920 --> 00:07:37,200 Speaker 3: to offer good looking, you know, the best deals on 147 00:07:37,240 --> 00:07:39,760 Speaker 3: those longer rates, but they kind of you know, if 148 00:07:39,800 --> 00:07:41,400 Speaker 3: you get stuck on a long rate, you're not going 149 00:07:41,440 --> 00:07:44,120 Speaker 3: to benefit as they do come down, So that would 150 00:07:44,160 --> 00:07:46,120 Speaker 3: be the sort of thinking with all those sort of 151 00:07:46,360 --> 00:07:49,640 Speaker 3: caveats that have to put there for legal reasons. 152 00:07:49,720 --> 00:07:53,200 Speaker 2: In terms of betting on that rate drop, our colleague 153 00:07:53,200 --> 00:07:56,040 Speaker 2: Geno tib Strainey reported that there's been an upteck in 154 00:07:56,160 --> 00:07:59,480 Speaker 2: mortgage holders betting on a rate drop, with an increase 155 00:07:59,480 --> 00:08:01,640 Speaker 2: in six month terms at the start of the year. 156 00:08:01,840 --> 00:08:05,640 Speaker 5: Proportionately, a lot more of the new mortgage lending was 157 00:08:05,960 --> 00:08:08,760 Speaker 5: going to people fixing for relatively short periods. So that's 158 00:08:08,800 --> 00:08:12,240 Speaker 5: seventeen percent for owner occupiers. For investors that was even 159 00:08:12,320 --> 00:08:16,160 Speaker 5: higher at twenty two percent, quite a big jump from 160 00:08:16,280 --> 00:08:17,200 Speaker 5: where it had been. 161 00:08:17,480 --> 00:08:21,000 Speaker 2: Are we basically gambling on house prices at the moment? 162 00:08:21,840 --> 00:08:23,680 Speaker 3: Well, it's a sort of funny sort of game we 163 00:08:23,720 --> 00:08:25,680 Speaker 3: play in New Zealand with fixed rates that we think 164 00:08:25,680 --> 00:08:28,560 Speaker 3: we can somehow game the market, you know. Yeah, I 165 00:08:28,600 --> 00:08:31,480 Speaker 3: mean it's logical that you would be looking at shorter 166 00:08:31,840 --> 00:08:35,640 Speaker 3: terms right now because that's the sort of consensus. The 167 00:08:35,720 --> 00:08:38,320 Speaker 3: narrative is that we start to see rates come down 168 00:08:38,760 --> 00:08:40,840 Speaker 3: through twenty twenty five, and so you don't want to 169 00:08:40,840 --> 00:08:43,000 Speaker 3: be locked into two years at a higher rate, But 170 00:08:43,040 --> 00:08:45,600 Speaker 3: we don't know how far they'll come down. And as 171 00:08:45,640 --> 00:08:47,960 Speaker 3: soon as you start looking out over about a year, 172 00:08:48,000 --> 00:08:50,320 Speaker 3: it's very hard to predict what's going to happen to 173 00:08:50,960 --> 00:08:54,120 Speaker 3: global inflation and all those things. So yeah, I always 174 00:08:54,120 --> 00:08:56,400 Speaker 3: think it's odd. In some countries. We've talked about this before. 175 00:08:56,440 --> 00:08:59,520 Speaker 3: In Australia, people tend to float more and just rise 176 00:08:59,559 --> 00:09:02,360 Speaker 3: and fall with whatever's going on in the market, And 177 00:09:02,400 --> 00:09:06,400 Speaker 3: in Europe and America they take much longer term fixed 178 00:09:06,480 --> 00:09:08,920 Speaker 3: rates and just sit there because in the end, it 179 00:09:08,960 --> 00:09:11,200 Speaker 3: has to be something that you can manage. You don't 180 00:09:11,200 --> 00:09:13,560 Speaker 3: want to get caught out, as some people have with 181 00:09:13,720 --> 00:09:16,960 Speaker 3: the super low interest rates for example a couple of 182 00:09:17,000 --> 00:09:19,400 Speaker 3: years ago, and you know, people get caught out because 183 00:09:19,400 --> 00:09:21,760 Speaker 3: they misread it. They thought they would stay low for longer, 184 00:09:21,880 --> 00:09:23,640 Speaker 3: or they thought that the spike was not going to 185 00:09:23,640 --> 00:09:27,040 Speaker 3: be as bad, and they're caught with mortgage repayments they 186 00:09:27,080 --> 00:09:29,400 Speaker 3: can't afford. So the first thing to do is really 187 00:09:29,480 --> 00:09:31,720 Speaker 3: just make sure that you've tested what you can afford 188 00:09:31,720 --> 00:09:34,800 Speaker 3: to pay on your mortgage. On either side of all 189 00:09:34,840 --> 00:09:37,079 Speaker 3: the market expectations, a little bit on the negative, a 190 00:09:37,080 --> 00:09:39,679 Speaker 3: little bit on the positive of where those forecasts are 191 00:09:39,720 --> 00:09:42,080 Speaker 3: made because they sort of more often than not, they'll 192 00:09:42,160 --> 00:09:44,319 Speaker 3: land one side or the other of where people are 193 00:09:44,320 --> 00:09:47,840 Speaker 3: exactly predicting. You know, there's no guarantees about the future. 194 00:10:00,360 --> 00:10:03,199 Speaker 2: How is the economy firing at the moment, and is 195 00:10:03,240 --> 00:10:06,679 Speaker 2: this Duvish ocr decision having a big impact on how 196 00:10:06,679 --> 00:10:09,880 Speaker 2: it's tracking? And my secondary question, what does duvish and 197 00:10:09,920 --> 00:10:10,760 Speaker 2: a hawkish mean? 198 00:10:11,000 --> 00:10:15,199 Speaker 3: Those are good questions. Yeah, Hawkish means you really really 199 00:10:15,240 --> 00:10:18,000 Speaker 3: hate inflation and you are going to do everything you can. 200 00:10:18,080 --> 00:10:21,080 Speaker 3: You think you're more worried about inflation generally, so you're 201 00:10:21,080 --> 00:10:24,640 Speaker 3: going to keep monetary policy tighter, which is jargon as well. 202 00:10:24,679 --> 00:10:27,360 Speaker 3: I know, you're basically going to keep interest rates higher 203 00:10:27,640 --> 00:10:31,040 Speaker 3: because your big concern is inflation. And if you're duvish, 204 00:10:31,160 --> 00:10:34,520 Speaker 3: you feel more relaxed about inflation, and you're going to 205 00:10:35,080 --> 00:10:37,240 Speaker 3: go with lower interest rates and try and stimulate the 206 00:10:37,320 --> 00:10:40,280 Speaker 3: economy and get the money circulating around the economy a 207 00:10:40,280 --> 00:10:42,040 Speaker 3: bit more. I mean, they're sort of old fashioned terms 208 00:10:42,280 --> 00:10:44,640 Speaker 3: that we borrow from the US military, I think in 209 00:10:44,720 --> 00:10:47,080 Speaker 3: terms of how people are feeling about going to war 210 00:10:47,200 --> 00:10:49,760 Speaker 3: or not. So I guess it's the war on inflation. 211 00:10:49,960 --> 00:10:54,120 Speaker 3: I mean, I wouldn't want to overread this week's decision. 212 00:10:54,640 --> 00:10:57,400 Speaker 3: It's in the tone, it's in the language. It does 213 00:10:57,440 --> 00:10:59,560 Speaker 3: flow through to the markets very quickly. So we probably 214 00:10:59,559 --> 00:11:02,960 Speaker 3: see some pricing move forward and expectations in the market 215 00:11:03,000 --> 00:11:05,320 Speaker 3: that rates will come down, and that actually can because 216 00:11:05,320 --> 00:11:07,680 Speaker 3: of some of that pricing that goes on does affect 217 00:11:07,720 --> 00:11:09,800 Speaker 3: your mortgage rate. That actually can put a bit of 218 00:11:09,800 --> 00:11:11,960 Speaker 3: downward pressure on mortgage rates. And so if the markets 219 00:11:12,040 --> 00:11:14,280 Speaker 3: really believe they're coming down, then they sort of start 220 00:11:14,320 --> 00:11:16,560 Speaker 3: to But that's something that doesn't help the Reserve Bank 221 00:11:16,679 --> 00:11:18,720 Speaker 3: because and that's one of the reasons that they like 222 00:11:18,800 --> 00:11:22,040 Speaker 3: to you know, I thought they might have stayed talking 223 00:11:22,080 --> 00:11:23,960 Speaker 3: tougher for a bit longer, is that, you know, you 224 00:11:24,000 --> 00:11:27,000 Speaker 3: start to lose effectiveness if the markets get ahead of 225 00:11:27,000 --> 00:11:29,680 Speaker 3: you and start pushing the rates down. But I guess 226 00:11:30,120 --> 00:11:32,320 Speaker 3: what it's saying in the commentary there is that the 227 00:11:32,360 --> 00:11:35,240 Speaker 3: Reserve Bank is seeing real signs of pain in the economy. 228 00:11:35,280 --> 00:11:39,080 Speaker 3: They are listening some of those signs of credit to stress, 229 00:11:39,240 --> 00:11:43,040 Speaker 3: business liquidations, all that sort of stuff. It is adding up. 230 00:11:43,120 --> 00:11:45,280 Speaker 3: I would say that we're just a bit shy of 231 00:11:45,320 --> 00:11:47,760 Speaker 3: some really good solid data. There's you know, the full 232 00:11:47,760 --> 00:11:50,560 Speaker 3: inflation figure comes out next week, so we haven't got 233 00:11:50,679 --> 00:11:53,320 Speaker 3: really solid data to base the stuff on yet. But 234 00:11:53,600 --> 00:11:55,920 Speaker 3: you know, you've only got to talk to anyone in 235 00:11:56,000 --> 00:11:59,319 Speaker 3: business or get out and about in Central Auckland or 236 00:11:59,360 --> 00:12:01,520 Speaker 3: something at the moment to know that it's really tough. 237 00:12:01,720 --> 00:12:07,440 Speaker 3: It's definitely a very recessionary feeling economy, even though technically 238 00:12:07,440 --> 00:12:10,200 Speaker 3: the top line might not be. But it feels like 239 00:12:10,360 --> 00:12:14,080 Speaker 3: a pretty grim economy right now. And the longer rates 240 00:12:14,160 --> 00:12:16,240 Speaker 3: say where they are, the worse that's going to get. 241 00:12:16,280 --> 00:12:19,400 Speaker 3: So the Reserve Bank clearly paying some attention to that 242 00:12:19,559 --> 00:12:23,160 Speaker 3: and hopeful that that's working on inflation. But we haven't 243 00:12:23,200 --> 00:12:25,560 Speaker 3: seen yet the proof that that's working on inflation, so 244 00:12:25,600 --> 00:12:27,959 Speaker 3: that's the caveat. We're still waiting to see those inflation 245 00:12:28,040 --> 00:12:29,559 Speaker 3: numbers really hit the target. 246 00:12:30,040 --> 00:12:34,520 Speaker 2: Other figures out this week four five hundred more people 247 00:12:34,640 --> 00:12:37,679 Speaker 2: have signed up to the job Seeker benefit since the 248 00:12:37,720 --> 00:12:38,559 Speaker 2: start of May. 249 00:12:39,080 --> 00:12:39,960 Speaker 1: Is that worrying? 250 00:12:41,160 --> 00:12:41,360 Speaker 2: Yes? 251 00:12:41,400 --> 00:12:44,600 Speaker 3: And Noah, it's probably in line with expectations. So it's 252 00:12:44,760 --> 00:12:47,480 Speaker 3: a tough one. It's not just people losing their jobs. 253 00:12:47,480 --> 00:12:50,160 Speaker 3: Some people losing their jobs, it's people coming out of university, 254 00:12:50,200 --> 00:12:52,120 Speaker 3: in school and not being able to get a job 255 00:12:52,240 --> 00:12:55,280 Speaker 3: signing up to Job Seeker. We expect the unemployment rate 256 00:12:55,320 --> 00:12:58,000 Speaker 3: to rise by a few more tens of thousands, which 257 00:12:58,200 --> 00:13:02,320 Speaker 3: sounds brutal, but that's really weird. The current consensus thinking is, 258 00:13:02,400 --> 00:13:04,400 Speaker 3: and that would take it up to about five point 259 00:13:04,440 --> 00:13:08,000 Speaker 3: three percent unemployment rate, five point five maybe, and that 260 00:13:08,120 --> 00:13:11,440 Speaker 3: is our historic average. Historical average in this country is 261 00:13:11,960 --> 00:13:15,199 Speaker 3: around five point five percent unemployment. So we're coming off 262 00:13:15,200 --> 00:13:17,679 Speaker 3: a low base. We're coming off a time of really 263 00:13:17,760 --> 00:13:20,680 Speaker 3: high employment when it was really easy to get a job. 264 00:13:20,760 --> 00:13:22,880 Speaker 3: Doesn't make it, you know, any better for anyone losing 265 00:13:22,920 --> 00:13:25,520 Speaker 3: their job. And if you've got a big mortgage right now, 266 00:13:25,559 --> 00:13:27,040 Speaker 3: to lose your job, there isn't going to be a 267 00:13:27,080 --> 00:13:29,400 Speaker 3: lot of other work out there. There's a squeeze on 268 00:13:30,000 --> 00:13:32,960 Speaker 3: hiring for a lot of companies, and so it feels 269 00:13:33,040 --> 00:13:35,520 Speaker 3: very tough because we're in that transition into a higher 270 00:13:35,559 --> 00:13:39,120 Speaker 3: unemployment economy. But overall, when you step back, it's it's 271 00:13:39,240 --> 00:13:43,120 Speaker 3: not as grim as many times throughout New Zealand's history 272 00:13:43,160 --> 00:13:46,600 Speaker 3: when unemployments has spiked to you know, seven or eight 273 00:13:46,640 --> 00:13:49,520 Speaker 3: percent after the GFC, or you know, ten or eleven 274 00:13:49,520 --> 00:13:52,280 Speaker 3: percent in the early nineties. So in terms of you know, 275 00:13:52,400 --> 00:13:55,400 Speaker 3: people worry about, is this the worst economy ever? Is 276 00:13:55,440 --> 00:13:58,360 Speaker 3: society crumbling and all that sort of stuff. Well, you know, 277 00:13:58,880 --> 00:14:00,880 Speaker 3: you have to step back a bit and remember that 278 00:14:00,880 --> 00:14:03,360 Speaker 3: we've we've lived through worse, or I've certainly lived through worse. 279 00:14:06,480 --> 00:14:09,800 Speaker 1: Our economy could be pushing more Kiwis to see greener 280 00:14:09,880 --> 00:14:13,520 Speaker 1: pastures abroad. Statsen's ed figures show a net migration loss 281 00:14:13,520 --> 00:14:16,360 Speaker 1: of sixty thousand Kiwis in the year to May, the 282 00:14:16,400 --> 00:14:20,440 Speaker 1: biggest loss on record. Numbers of citizens leaving are at 283 00:14:20,440 --> 00:14:24,040 Speaker 1: a record high of eighty five thousand, six hundred people. 284 00:14:26,640 --> 00:14:31,160 Speaker 2: We've also seen more worrying migration data about how many 285 00:14:31,200 --> 00:14:34,640 Speaker 2: people are flocking overseas. What can you tell us about that? 286 00:14:34,840 --> 00:14:36,520 Speaker 3: Yeah, I mean, if I was going to worry about 287 00:14:36,520 --> 00:14:40,200 Speaker 3: one statistic, I'd probably be more concerned about that. It's 288 00:14:40,200 --> 00:14:41,600 Speaker 3: hard to know that. You know, you have got the 289 00:14:41,600 --> 00:14:46,120 Speaker 3: borders opening up after COVID and probably still a large 290 00:14:46,160 --> 00:14:48,560 Speaker 3: number of young Kiwis heading off on Oe's that they 291 00:14:48,560 --> 00:14:51,200 Speaker 3: weren't able to do, going off to London and around 292 00:14:51,240 --> 00:14:54,120 Speaker 3: the world to work. But there's also a growing number 293 00:14:54,120 --> 00:14:56,680 Speaker 3: of people going to Australia for higher wages, seeing more 294 00:14:56,720 --> 00:15:01,360 Speaker 3: opportunity there, and the idea that young New Zealanders don't 295 00:15:01,400 --> 00:15:05,560 Speaker 3: see opportunity is worrying. And there's two aspects of that. 296 00:15:05,600 --> 00:15:07,720 Speaker 3: One is we're in this downturn right now and that 297 00:15:07,840 --> 00:15:09,680 Speaker 3: might might start to look a bit better a year 298 00:15:09,720 --> 00:15:12,200 Speaker 3: from now, so that's hope. That's just cyclical. But the 299 00:15:12,240 --> 00:15:14,840 Speaker 3: other one is sort of what Prome Minister when he 300 00:15:14,880 --> 00:15:18,040 Speaker 3: was campaigning a pre election called New Zealand losing its 301 00:15:18,040 --> 00:15:20,360 Speaker 3: mojo and he was going to help us get it back. 302 00:15:20,400 --> 00:15:22,640 Speaker 3: So hopefully he's working on that. That just that sense 303 00:15:22,680 --> 00:15:25,920 Speaker 3: of what we'll you know, lead the growth and the 304 00:15:25,960 --> 00:15:28,440 Speaker 3: good feeling about New Zealand's economy in the next ten 305 00:15:28,480 --> 00:15:30,920 Speaker 3: years or so. Where's all that vibe going to come from. 306 00:15:31,000 --> 00:15:33,240 Speaker 3: Which industries are going to be there for young people 307 00:15:33,280 --> 00:15:36,040 Speaker 3: to get into and find them make an amazing life 308 00:15:36,120 --> 00:15:39,080 Speaker 3: for themselves in New Zealand. And that's a bit tougher 309 00:15:39,120 --> 00:15:42,040 Speaker 3: and you know, but it does pile on and you know, 310 00:15:42,080 --> 00:15:44,960 Speaker 3: the gloomy winter bottom of an economic cycle, a lot 311 00:15:44,960 --> 00:15:47,520 Speaker 3: of people sort of heading off after in the post 312 00:15:47,560 --> 00:15:49,440 Speaker 3: COVID wave, so you know, you've got to look through 313 00:15:49,440 --> 00:15:51,600 Speaker 3: the mix of that. Also, I would mention that we're 314 00:15:51,600 --> 00:15:54,880 Speaker 3: not losing population. We're still those same stats showed that 315 00:15:54,880 --> 00:15:58,240 Speaker 3: we're still getting a lot of migrants in eighty thousand 316 00:15:58,480 --> 00:16:00,400 Speaker 3: net gain in the last year, so so you know, 317 00:16:00,440 --> 00:16:03,480 Speaker 3: maybe the shape of New Zealand's demographics is changing, but 318 00:16:03,600 --> 00:16:06,360 Speaker 3: the population is still growing and that's at least a 319 00:16:06,400 --> 00:16:08,600 Speaker 3: sign that some people have got faith in this country 320 00:16:08,600 --> 00:16:09,200 Speaker 3: long term. 321 00:16:09,320 --> 00:16:11,920 Speaker 2: And Liam, what's your outlook for the coming months. I 322 00:16:11,960 --> 00:16:14,960 Speaker 2: know we ask you this every time, all the time, 323 00:16:15,280 --> 00:16:17,120 Speaker 2: but people want to see some light at the end 324 00:16:17,160 --> 00:16:18,040 Speaker 2: of the tunnel, don't they. 325 00:16:18,480 --> 00:16:21,400 Speaker 3: It's funny that it's all hooked around interest rate. The 326 00:16:21,440 --> 00:16:24,480 Speaker 3: cyclical bit will turn. I can't tell you exactly which 327 00:16:24,480 --> 00:16:26,760 Speaker 3: month it's going to turn in. Is it November, February? 328 00:16:27,040 --> 00:16:30,280 Speaker 3: By May? But the cycle of this economy will turn, 329 00:16:30,480 --> 00:16:33,880 Speaker 3: and you know, interest rates will come down a bit 330 00:16:34,120 --> 00:16:36,280 Speaker 3: enough for people to feel a bit more relaxed, for 331 00:16:36,320 --> 00:16:38,920 Speaker 3: the property market to come back a bit, which you know, 332 00:16:39,080 --> 00:16:42,240 Speaker 3: nobody wants another housing bubble, but you know, the middle 333 00:16:42,240 --> 00:16:45,360 Speaker 3: classes feel a bit wealthier, they start spending again, and 334 00:16:45,400 --> 00:16:48,960 Speaker 3: all of that stuff turns round. So I think that 335 00:16:49,080 --> 00:16:50,520 Speaker 3: is the light at the end of tunnel. Just trust 336 00:16:50,520 --> 00:16:53,720 Speaker 3: that the process is working. It's been slower and a 337 00:16:53,720 --> 00:16:55,960 Speaker 3: tougher grind than we would have liked. Some of the 338 00:16:56,080 --> 00:16:59,680 Speaker 3: damage done through the pandemic was probably worse than hoped, 339 00:17:00,120 --> 00:17:03,200 Speaker 3: so it's taken more time to get things rebalancing, but 340 00:17:03,240 --> 00:17:06,600 Speaker 3: that inflation really is coming out now. Bigger challenges for 341 00:17:06,680 --> 00:17:11,320 Speaker 3: New Zealand are still there, infrastructure and new industries and 342 00:17:11,400 --> 00:17:13,720 Speaker 3: jobs growth and all that stuff getting the mojo back. 343 00:17:13,880 --> 00:17:17,080 Speaker 3: I'm hopeful that as the cycle turns, the government will 344 00:17:17,080 --> 00:17:19,040 Speaker 3: sort of use that momentum to try and get a 345 00:17:19,080 --> 00:17:22,359 Speaker 3: few things going and spark a bit more of an 346 00:17:22,440 --> 00:17:23,719 Speaker 3: upbeat feeling in the country. 347 00:17:23,840 --> 00:17:29,600 Speaker 2: Thanks for joining us, Liam, That said, for this episode 348 00:17:29,640 --> 00:17:32,480 Speaker 2: of The Front Page. You can read more about today's 349 00:17:32,520 --> 00:17:36,119 Speaker 2: stories and extensive news coverage at enzat Herald dot co 350 00:17:36,359 --> 00:17:39,960 Speaker 2: dot z. The Front Page is produced by Ethan Seals 351 00:17:40,040 --> 00:17:44,840 Speaker 2: with sound engineer Patty Fox. I'm Chelsea Daniels. Subscribe to 352 00:17:44,880 --> 00:17:48,200 Speaker 2: The Front Page on iHeartRadio or wherever you get your podcasts, 353 00:17:48,480 --> 00:17:51,880 Speaker 2: and tune in tomorrow for another look behind the headlines.