1 00:00:00,000 --> 00:00:01,600 Speaker 1: So now the problem with people like Paul Comway. You 2 00:00:01,639 --> 00:00:04,040 Speaker 1: know Paul Conway. He's the chief economist at the Reserve Bank. 3 00:00:04,400 --> 00:00:06,680 Speaker 1: Problem with people like him is they know some stuff 4 00:00:06,680 --> 00:00:08,560 Speaker 1: and they sound good in his speech, but their record 5 00:00:08,600 --> 00:00:11,079 Speaker 1: exposes them badly. So he gives this speech yesterday to 6 00:00:11,119 --> 00:00:14,960 Speaker 1: the National Financial Advisor's Conference. He talks about how expensive 7 00:00:14,960 --> 00:00:17,360 Speaker 1: this country is, and he talked about our lack of productivity. Now, 8 00:00:17,360 --> 00:00:19,240 Speaker 1: if the speech had been a school project, he probably 9 00:00:19,239 --> 00:00:20,919 Speaker 1: would have got a good mark. He couldn't argue with 10 00:00:20,960 --> 00:00:23,320 Speaker 1: a lot of what he said. We aren't very efficient. 11 00:00:23,760 --> 00:00:27,080 Speaker 1: Things like construction cost more here than anywhere in the OECD. 12 00:00:27,520 --> 00:00:30,560 Speaker 1: We were once okay ish at productivity, we aren't any 13 00:00:30,560 --> 00:00:33,080 Speaker 1: more in our real ability to buy stuff. As going backwards, 14 00:00:33,440 --> 00:00:36,240 Speaker 1: he noted, before twenty twenty, our purchasing power was growing 15 00:00:36,320 --> 00:00:39,320 Speaker 1: faster than the OECD's on average. Now, ask yourself a question, 16 00:00:39,400 --> 00:00:41,680 Speaker 1: what happened in twenty twenty. In post twenty twenty, Well, 17 00:00:41,680 --> 00:00:44,800 Speaker 1: that's right, that's COVID. So COVID was no one's fault, 18 00:00:45,120 --> 00:00:47,840 Speaker 1: well possibly the Chinese, But the response was the key. 19 00:00:48,000 --> 00:00:51,160 Speaker 1: And in that response, as is well documented, we blew 20 00:00:51,200 --> 00:00:53,680 Speaker 1: it blew at Sky high and ended up with inflation 21 00:00:53,720 --> 00:00:55,959 Speaker 1: north of seven percent, some of which was overseen by 22 00:00:55,960 --> 00:00:59,520 Speaker 1: mister Conway and mister raw at the Reserve Bank. Inflation, 23 00:01:00,160 --> 00:01:03,760 Speaker 1: argues Paul, is critical given the cash rate helps anchor prices? 24 00:01:03,920 --> 00:01:06,480 Speaker 1: Does it? He cites the prices that make us the 25 00:01:06,480 --> 00:01:09,800 Speaker 1: most expensive place in the world, rates power insurance. Did 26 00:01:09,800 --> 00:01:12,840 Speaker 1: the cash rate do anything for those? No? Other prices 27 00:01:12,840 --> 00:01:16,120 Speaker 1: he cited, like butter and lamb also expensive, are expensive 28 00:01:16,120 --> 00:01:19,800 Speaker 1: for obvious and well documented reasons, and ironically expensive for 29 00:01:19,840 --> 00:01:22,680 Speaker 1: good reasons for New Zealand inc. Part of the issue, 30 00:01:22,680 --> 00:01:25,560 Speaker 1: of course, is market sizes. Why Walmart's successful. It has 31 00:01:25,560 --> 00:01:28,240 Speaker 1: a population base of over three hundred million. We don't. 32 00:01:28,600 --> 00:01:31,400 Speaker 1: Supply of goods always cheaper per unit when you buy 33 00:01:31,400 --> 00:01:35,320 Speaker 1: them by the million, We don't. The productivity question, of course, 34 00:01:35,360 --> 00:01:37,480 Speaker 1: has been bounced around for years and never really solved. 35 00:01:37,520 --> 00:01:40,399 Speaker 1: I mean, many people don't even agree what productivity is. 36 00:01:40,400 --> 00:01:42,959 Speaker 1: Is it a robot replacing a human? Is it building 37 00:01:42,959 --> 00:01:45,560 Speaker 1: a road faster? Is it inventing a thing that changes 38 00:01:45,600 --> 00:01:47,880 Speaker 1: the world. Part of the reason the Reserve Bank blue 39 00:01:47,920 --> 00:01:50,960 Speaker 1: COVID so badly is they write speeches like Conways. They 40 00:01:50,960 --> 00:01:53,920 Speaker 1: live in Wellington and small rooms theorizing the moment. You 41 00:01:53,920 --> 00:01:55,840 Speaker 1: give them a bit of real world look at what 42 00:01:55,880 --> 00:01:58,520 Speaker 1: they do with it. For more from the Mic Asking 43 00:01:58,520 --> 00:02:02,520 Speaker 1: Breakfast listen Lived News Talks at B from six am weekdays, 44 00:02:02,760 --> 00:02:04,800 Speaker 1: or follow the podcast on iHeartRadio.