1 00:00:00,960 --> 00:00:03,440 Speaker 1: You're listening to a Chersias. 2 00:00:03,080 --> 00:00:07,080 Speaker 2: Podcast and welcome to Shared Lunch, brought to you by Chasy's. 3 00:00:07,160 --> 00:00:09,840 Speaker 2: I'm Garth Bray and I'm probably taking a break right 4 00:00:09,880 --> 00:00:12,320 Speaker 2: now along with the rest of the Chasas team, but 5 00:00:12,600 --> 00:00:15,640 Speaker 2: they have been very busy gathering all sorts of great 6 00:00:15,720 --> 00:00:17,279 Speaker 2: insights from people in the know. 7 00:00:17,840 --> 00:00:18,000 Speaker 1: Now. 8 00:00:18,040 --> 00:00:20,799 Speaker 2: One of the crispittle conversations I had this year was 9 00:00:20,840 --> 00:00:25,160 Speaker 2: with Kiwibanks chief economist Jared Kerr, who had some fascinating 10 00:00:25,200 --> 00:00:28,640 Speaker 2: insights about debt and how much we could be using it. 11 00:00:29,720 --> 00:00:33,000 Speaker 3: If we went out to the market and issued an 12 00:00:33,000 --> 00:00:37,479 Speaker 3: infrastructure bond and said hey, we want fifty billion dollars 13 00:00:37,600 --> 00:00:41,120 Speaker 3: and we're going to issue that and it's going to 14 00:00:41,159 --> 00:00:46,000 Speaker 3: go towards infrastructure, then most people will turn around and 15 00:00:46,000 --> 00:00:47,560 Speaker 3: go okay, fine. 16 00:00:47,520 --> 00:00:51,000 Speaker 4: New Zealand Good Risk will put over money THEREAPORTOG going. 17 00:00:50,880 --> 00:00:54,320 Speaker 3: Into building assets. People, there's going to be a return 18 00:00:54,360 --> 00:00:56,560 Speaker 3: on it, hopefully, you know, it might be a toll road, 19 00:00:56,600 --> 00:01:02,160 Speaker 3: it might be whatever. Get the private people involved, do 20 00:01:02,200 --> 00:01:04,679 Speaker 3: what you need to do to build the infrastructure. I 21 00:01:04,720 --> 00:01:08,160 Speaker 3: don't think the rating agencies or investors would even blink. 22 00:01:08,440 --> 00:01:10,880 Speaker 3: It's like, yeah, okay, you're finally playing catch up for 23 00:01:10,880 --> 00:01:16,800 Speaker 3: thirty years of not doing enough, cutting taxes, spending more 24 00:01:16,920 --> 00:01:23,720 Speaker 3: on beneficiaries or whatever. That's what gets the rating. Agent's 25 00:01:23,800 --> 00:01:28,720 Speaker 3: more concerned building a bridge, building a road or whatever. 26 00:01:29,240 --> 00:01:34,240 Speaker 3: That's not as that's building in the productivity of your economy. 27 00:01:34,720 --> 00:01:39,800 Speaker 3: And we sit here looking at these really disappointing productivity 28 00:01:40,800 --> 00:01:43,600 Speaker 3: numbers for New Zealand and elsewhere, but for New Zealand 29 00:01:43,600 --> 00:01:46,200 Speaker 3: in particular, and we just go, you know what, A 30 00:01:46,280 --> 00:01:48,520 Speaker 3: lot of that's just the lack of infrastructure. We haven't 31 00:01:48,560 --> 00:01:51,840 Speaker 3: invested in ourselves. And governments need to realize that if 32 00:01:52,520 --> 00:01:54,840 Speaker 3: you think about the long game, and unfortunately they're only 33 00:01:54,840 --> 00:01:57,240 Speaker 3: thinking about three year games. If you think about the 34 00:01:57,280 --> 00:02:00,760 Speaker 3: long game, spending more on infrastructure today will give you 35 00:02:00,800 --> 00:02:04,400 Speaker 3: a harder, faster, stronger economy. Oh and that's a larger 36 00:02:04,440 --> 00:02:08,360 Speaker 3: tax base tomorrow. We don't seem to be able to 37 00:02:08,400 --> 00:02:12,079 Speaker 3: think in ten, twenty fifty year chunks. We're only thinking 38 00:02:12,080 --> 00:02:15,080 Speaker 3: in three yearly chunks. You know, I've got this government 39 00:02:15,120 --> 00:02:17,799 Speaker 3: now that they haven't been in there that long, they're 40 00:02:17,880 --> 00:02:21,600 Speaker 3: kind of halfway through and they're already looking to next year, going, jeez, 41 00:02:21,800 --> 00:02:24,920 Speaker 3: we've got to deliver in order to get voted back in. 42 00:02:25,000 --> 00:02:27,760 Speaker 3: It's not enough time, not enough time for either side 43 00:02:27,800 --> 00:02:28,320 Speaker 3: of government. 44 00:02:28,600 --> 00:02:30,280 Speaker 4: We might get to decide on a four year term 45 00:02:30,320 --> 00:02:31,240 Speaker 4: at the next selection. 46 00:02:31,080 --> 00:02:33,320 Speaker 3: Here are, but it's like you want to give them 47 00:02:33,360 --> 00:02:36,600 Speaker 3: a four year term with the expectation of getting two 48 00:02:36,919 --> 00:02:39,040 Speaker 3: almost like the US, you kind of expect them to 49 00:02:39,080 --> 00:02:41,680 Speaker 3: get two terms and you've got them in there for 50 00:02:41,720 --> 00:02:44,399 Speaker 3: a chunk of time and you can kind of get 51 00:02:44,400 --> 00:02:48,119 Speaker 3: stuff done over that over that time frame, but three 52 00:02:48,280 --> 00:02:54,120 Speaker 3: yearly and then the complications of coalitions, it's just, you know, 53 00:02:54,560 --> 00:02:58,400 Speaker 3: it really inhibits their ability to get stuff done. 54 00:02:59,240 --> 00:03:04,720 Speaker 1: Well. Ideas, yeah, possibly, but I mean you get ideas, 55 00:03:04,720 --> 00:03:06,760 Speaker 1: you get minority parties like ACT with the Greens that 56 00:03:06,760 --> 00:03:09,800 Speaker 1: are living in sort of slightly saltier suggestions like we 57 00:03:09,840 --> 00:03:12,720 Speaker 1: should run hard on that deficit or we should you 58 00:03:13,000 --> 00:03:16,520 Speaker 1: really pull the chrucks out and go for an extremely 59 00:03:16,560 --> 00:03:19,960 Speaker 1: similatary position and that what function does that have? 60 00:03:21,000 --> 00:03:23,520 Speaker 3: Well, I think you get you get these two centralist 61 00:03:24,280 --> 00:03:26,960 Speaker 3: parties and then you get some on either side recommending 62 00:03:26,960 --> 00:03:30,880 Speaker 3: the more extreme, and a lot of votels will look 63 00:03:30,880 --> 00:03:32,760 Speaker 3: at the two central parties and go, you know what, 64 00:03:32,760 --> 00:03:35,280 Speaker 3: they're not really either size, not really give me something, 65 00:03:35,320 --> 00:03:37,040 Speaker 3: so I'll go to the ones that are a bit 66 00:03:37,080 --> 00:03:41,160 Speaker 3: more extreme and we and we see that. I just 67 00:03:41,280 --> 00:03:44,400 Speaker 3: wish we would have a better debate about the type 68 00:03:44,440 --> 00:03:47,320 Speaker 3: of debt that we could issue and what that money 69 00:03:47,320 --> 00:03:49,800 Speaker 3: would be used for. If we went out to the 70 00:03:49,840 --> 00:03:55,040 Speaker 3: investment community and said, give us fifty billion dollars, we 71 00:03:55,160 --> 00:03:58,760 Speaker 3: want to do these projects over the next ten years, 72 00:03:59,000 --> 00:04:02,880 Speaker 3: will you fund us? Absolutely they would absolutely. They are 73 00:04:02,920 --> 00:04:06,640 Speaker 3: looking for ten twenty thirty year debt. Acc is a 74 00:04:06,640 --> 00:04:11,040 Speaker 3: great example. Insurance companies. They want long term bonds to 75 00:04:11,120 --> 00:04:14,120 Speaker 3: invest into, so they would be, you know, etching to 76 00:04:14,160 --> 00:04:15,800 Speaker 3: buy twenty thirty year bonds. 77 00:04:16,680 --> 00:04:21,159 Speaker 4: We were the world champions of comparing ourselves and seeing 78 00:04:21,320 --> 00:04:24,479 Speaker 4: how everybody else is doing it better? Who's doing it 79 00:04:24,480 --> 00:04:25,000 Speaker 4: better than us? 80 00:04:25,080 --> 00:04:25,440 Speaker 2: Right now? 81 00:04:27,600 --> 00:04:30,360 Speaker 3: I think Australia is definitely up performing US at the moment, 82 00:04:30,680 --> 00:04:35,960 Speaker 3: and that's because they are and you know, their central 83 00:04:36,000 --> 00:04:39,200 Speaker 3: bank didn't go as hard on the rate hikes, so 84 00:04:39,240 --> 00:04:43,120 Speaker 3: therefore the Ossie economy didn't slow down as much. They 85 00:04:43,200 --> 00:04:47,720 Speaker 3: didn't record a technical recession. They've got a recession in 86 00:04:47,760 --> 00:04:50,680 Speaker 3: per capita terms, but it's quite shallow compared to ours. 87 00:04:50,720 --> 00:04:52,880 Speaker 3: So we just look at the Aussie economy and go, 88 00:04:53,040 --> 00:04:58,320 Speaker 3: oh man, it's just growing nicer than ours. The labor markets, tighter, 89 00:04:58,880 --> 00:05:02,200 Speaker 3: wage growth is more more, they're just more buoyant than 90 00:05:02,240 --> 00:05:04,919 Speaker 3: we are at the moment. And that's why we've seen 91 00:05:05,040 --> 00:05:08,480 Speaker 3: a net forty three thousand kiwis leave in the last year. 92 00:05:09,120 --> 00:05:13,120 Speaker 3: So we've seen seventy odd thousand kiwis leave and then 93 00:05:13,160 --> 00:05:17,000 Speaker 3: some coming back. But that net forty three is huge. 94 00:05:17,320 --> 00:05:19,800 Speaker 4: How much of it is off savings and just a stronger, 95 00:05:20,000 --> 00:05:24,479 Speaker 4: you know, a better national superannuation structure so that people 96 00:05:24,480 --> 00:05:25,920 Speaker 4: are putting more money aside. 97 00:05:26,520 --> 00:05:29,120 Speaker 3: Oh, I mean that's been a strength of Australia for 98 00:05:29,120 --> 00:05:32,200 Speaker 3: a while. Now they've got I think the fifth largest 99 00:05:32,720 --> 00:05:35,960 Speaker 3: sovereign wealth fund on the planets for an economy, which 100 00:05:36,040 --> 00:05:39,200 Speaker 3: is less than two percent of the global economy. To 101 00:05:39,200 --> 00:05:41,320 Speaker 3: have that sort of savings there, and do you know what, 102 00:05:41,480 --> 00:05:46,040 Speaker 3: they don't think they've got enough. They are still increasing 103 00:05:46,400 --> 00:05:48,880 Speaker 3: their compulsory I think it's gone up to twelve percent now. 104 00:05:49,040 --> 00:05:51,440 Speaker 3: It was nine percent when I was working there. I'll 105 00:05:51,480 --> 00:05:54,760 Speaker 3: tell you what, working thirteen and a half years in Australia, 106 00:05:55,240 --> 00:05:58,080 Speaker 3: I've actually got this nice little nest egg sitting there 107 00:05:58,240 --> 00:06:00,880 Speaker 3: that I wouldn't have had otherwise, way I could afford 108 00:06:00,920 --> 00:06:04,159 Speaker 3: to put nine percent away over that entire period. But 109 00:06:04,200 --> 00:06:06,760 Speaker 3: it's sitting there and it's great, and we're doing it 110 00:06:06,800 --> 00:06:10,159 Speaker 3: here now. Should be compulsory, should be a much higher rate. 111 00:06:11,560 --> 00:06:15,400 Speaker 3: But you know, some things Australians just do do better 112 00:06:16,320 --> 00:06:20,280 Speaker 3: than us. One thing they are pretty good at, and 113 00:06:20,320 --> 00:06:23,400 Speaker 3: particularly at the state level, is the big infrastructure stuff. 114 00:06:24,000 --> 00:06:26,120 Speaker 3: You know, they just seem to get stuff done. And 115 00:06:26,160 --> 00:06:29,280 Speaker 3: I use Sydney as a classic example, where you've got 116 00:06:29,320 --> 00:06:34,480 Speaker 3: this bridge and it's got heaps of lanes, it's got 117 00:06:35,320 --> 00:06:38,320 Speaker 3: a train track gone both ways, so trains can go across, 118 00:06:38,560 --> 00:06:41,600 Speaker 3: you can walk down one side, you can cycle across 119 00:06:41,640 --> 00:06:44,719 Speaker 3: the other side of it. And that was built you know, 120 00:06:44,800 --> 00:06:51,400 Speaker 3: fifty years ago. That's not enough. Their city grew and 121 00:06:51,440 --> 00:06:55,440 Speaker 3: they've got a tunnel going underneath. Now you've got theories, 122 00:06:55,520 --> 00:06:58,039 Speaker 3: You've got plenty of ways to get across the Sydney Harbor. 123 00:06:58,720 --> 00:07:04,159 Speaker 3: Right here, You've got a bridge that was built in 124 00:07:04,200 --> 00:07:06,799 Speaker 3: the sixties, I think, on the cheap. On the cheap, 125 00:07:07,600 --> 00:07:10,960 Speaker 3: it reached capacity five years later, so we tacked on 126 00:07:11,640 --> 00:07:14,960 Speaker 3: some clip ons and we've done nothing since. It just 127 00:07:15,040 --> 00:07:19,200 Speaker 3: highlights the difference between us. They can deliver these big 128 00:07:19,240 --> 00:07:23,240 Speaker 3: projects in Australia and they can think a lot further ahead. 129 00:07:23,240 --> 00:07:26,480 Speaker 3: For some reason, and I just wish we would snap 130 00:07:26,520 --> 00:07:29,280 Speaker 3: out of it. Investing involves the risk you might lose 131 00:07:29,280 --> 00:07:31,600 Speaker 3: the money you start with. We recommend talking to a 132 00:07:31,680 --> 00:07:36,280 Speaker 3: licensed financial advisor. We also recommend reading product disclosure documents 133 00:07:36,280 --> 00:07:37,560 Speaker 3: before deciding to invest.