1 00:00:06,559 --> 00:00:09,640 Speaker 1: Kyota. I'm Chelsea Daniels and this is the Front Page, 2 00:00:10,039 --> 00:00:16,799 Speaker 1: a daily podcast presented by the New Zealand Herald. The 3 00:00:16,840 --> 00:00:19,880 Speaker 1: financial year is coming to an end and that means 4 00:00:19,920 --> 00:00:23,000 Speaker 1: from next Tuesday a lot of kiwis will be getting 5 00:00:23,040 --> 00:00:26,400 Speaker 1: more money in their wallets. April first is when the 6 00:00:26,440 --> 00:00:30,320 Speaker 1: annual General Adjustment takes place, when benefits and minimum wage 7 00:00:30,360 --> 00:00:34,360 Speaker 1: increases to account for wage growth or inflation. While benefits 8 00:00:34,360 --> 00:00:37,479 Speaker 1: are getting a two point two two percent rise and 9 00:00:37,640 --> 00:00:40,640 Speaker 1: Super and the Veteran's Pension gets a three point five 10 00:00:40,640 --> 00:00:43,879 Speaker 1: to one percent increase, minimum wage is only going up 11 00:00:43,920 --> 00:00:47,440 Speaker 1: by one point five percent As people continue to feel 12 00:00:47,479 --> 00:00:51,320 Speaker 1: the sting of the cost of living crisis. What impact 13 00:00:51,400 --> 00:00:55,000 Speaker 1: will these changes have and how well is our economy 14 00:00:55,040 --> 00:00:57,960 Speaker 1: performing at the moment? To talk us through it all 15 00:00:58,200 --> 00:01:01,080 Speaker 1: today on the Front Page where joined by Enzad Herald 16 00:01:01,200 --> 00:01:10,880 Speaker 1: Business Editor at Large Liam Dan. Liam, let's start with 17 00:01:11,000 --> 00:01:14,200 Speaker 1: the minimum wage. It's going up one point five percent 18 00:01:14,240 --> 00:01:17,480 Speaker 1: to twenty three dollars fifty. That's not in line with 19 00:01:17,600 --> 00:01:21,360 Speaker 1: inflation and instead in line with the NZ first National 20 00:01:21,400 --> 00:01:25,399 Speaker 1: Coalition agreement to moderate those increases. What sort of impact 21 00:01:25,480 --> 00:01:29,040 Speaker 1: is this lower increase than usual going to have? It 22 00:01:29,080 --> 00:01:32,080 Speaker 1: was two percent last year and it impacts between eighty 23 00:01:32,120 --> 00:01:34,480 Speaker 1: and one hundred and forty five thousand workers. 24 00:01:34,560 --> 00:01:37,319 Speaker 2: Hey yeah, I mean it's a very deliberate thing to 25 00:01:37,360 --> 00:01:40,000 Speaker 2: take it up by lower than the rate of inflation, 26 00:01:40,160 --> 00:01:42,360 Speaker 2: because I guess the argument is, you know, I've had 27 00:01:42,400 --> 00:01:45,679 Speaker 2: some big minimum wage increases during the labor government period. 28 00:01:45,840 --> 00:01:48,640 Speaker 2: The argument is, whether it's you believe it or not, 29 00:01:48,760 --> 00:01:51,640 Speaker 2: that in doing that, they've increased business costs and added 30 00:01:51,640 --> 00:01:54,280 Speaker 2: to inflation, and you get into kind of a a 31 00:01:54,320 --> 00:01:57,560 Speaker 2: spiral of inflation where so you know, you're going to 32 00:01:57,600 --> 00:02:01,240 Speaker 2: the cafe to get coffee, if the workers there, if 33 00:02:01,240 --> 00:02:03,800 Speaker 2: the wages have gone up significantly, then you're paying more 34 00:02:03,840 --> 00:02:07,080 Speaker 2: for the coffee. Just that increases inflation, so your wages 35 00:02:07,120 --> 00:02:08,880 Speaker 2: have to go up to cover the inflation. And so 36 00:02:08,919 --> 00:02:12,560 Speaker 2: they're trying to push back against that inflationary spiral. I mean, 37 00:02:12,600 --> 00:02:15,000 Speaker 2: there'll be listeners who will point out that that seems 38 00:02:15,000 --> 00:02:17,240 Speaker 2: a bit unfair. You know, we're looking at the people 39 00:02:17,280 --> 00:02:19,840 Speaker 2: who are earning the lowest amounts in the economy. But 40 00:02:19,880 --> 00:02:24,000 Speaker 2: it's in a different environment to when minimum wages were 41 00:02:24,000 --> 00:02:27,600 Speaker 2: going up previously. We've got basically unemployment is rising. There's 42 00:02:27,600 --> 00:02:31,639 Speaker 2: a shortage of jobs, and so you'd imagine what we're 43 00:02:31,639 --> 00:02:35,400 Speaker 2: starting to see wage growth more diminished across the board, 44 00:02:35,480 --> 00:02:37,480 Speaker 2: So people aren't getting the wage rises they would have 45 00:02:37,480 --> 00:02:39,359 Speaker 2: got because they just don't have the ability to switch 46 00:02:39,440 --> 00:02:42,040 Speaker 2: job the same way. So I guess that is in 47 00:02:42,080 --> 00:02:44,480 Speaker 2: line with a trend for lower wage growth, and the 48 00:02:44,520 --> 00:02:46,799 Speaker 2: hope would be that people are still able to by 49 00:02:46,800 --> 00:02:50,240 Speaker 2: beating the inflationary cycle, getting the economy going, people are 50 00:02:50,240 --> 00:02:53,200 Speaker 2: able to get better jobs and they're more higher paying 51 00:02:53,280 --> 00:02:55,760 Speaker 2: jobs out there, So that'd be the government's logic for that. 52 00:02:56,080 --> 00:02:59,480 Speaker 1: The other main increase is for the support for beneficiaries. 53 00:03:00,160 --> 00:03:03,440 Speaker 1: Raddle off some numbers for you here. Job seeker support 54 00:03:03,560 --> 00:03:07,160 Speaker 1: is going up roughly two point two two percent. For 55 00:03:07,360 --> 00:03:10,680 Speaker 1: sole parents, that's an increase of nine dollars to five 56 00:03:10,800 --> 00:03:14,080 Speaker 1: hundred and five dollars eighty For couples with children, that 57 00:03:14,200 --> 00:03:17,920 Speaker 1: increases seven dollars and six cents to three hundred and 58 00:03:18,000 --> 00:03:20,880 Speaker 1: twenty four dollars sixty one. For me bel over twenty 59 00:03:20,919 --> 00:03:24,880 Speaker 1: five without kids, those increases bring them to three hundred 60 00:03:24,880 --> 00:03:28,359 Speaker 1: and sixty one thirty one if single, and three hundred 61 00:03:28,360 --> 00:03:31,320 Speaker 1: and seven forty two if in a couple. For veterans 62 00:03:31,400 --> 00:03:35,160 Speaker 1: and those on super they're getting a three percent increase, 63 00:03:35,320 --> 00:03:38,760 Speaker 1: bringing it up to one thousand and seventy six dollars 64 00:03:38,760 --> 00:03:42,480 Speaker 1: and eighty four cents a fortnite and eight hundred and 65 00:03:42,600 --> 00:03:46,200 Speaker 1: twenty eight thirty four for those in couples. The government 66 00:03:46,200 --> 00:03:49,560 Speaker 1: has touted these increases as reflecting the cost of living, 67 00:03:49,640 --> 00:03:51,360 Speaker 1: but these happen every year, don't they. 68 00:03:51,640 --> 00:03:54,840 Speaker 2: Yeah. I mean, look, they're basically in line with inflation 69 00:03:54,960 --> 00:03:58,000 Speaker 2: and a little bit pets, a little bit more generous for superinuitants. 70 00:03:58,040 --> 00:04:00,920 Speaker 2: But yeah, again, you've got a government that's struggling with 71 00:04:01,120 --> 00:04:03,880 Speaker 2: balancing the books, doesn't have a lot of money, is 72 00:04:04,160 --> 00:04:06,720 Speaker 2: actually dealing with more people on benefits because of the 73 00:04:06,760 --> 00:04:10,360 Speaker 2: situation with unemployment, so they're looking at a much higher cost. 74 00:04:10,480 --> 00:04:13,880 Speaker 2: I think they obviously felt politically that the minimum they 75 00:04:13,880 --> 00:04:16,280 Speaker 2: could do would be to match inflation and not have 76 00:04:16,440 --> 00:04:19,080 Speaker 2: those beneficiaries going backwards, because they really are some of 77 00:04:19,080 --> 00:04:22,039 Speaker 2: the poorest people out there. But yeah, look, it's in 78 00:04:22,080 --> 00:04:24,960 Speaker 2: a very tough environment for the government. They just don't 79 00:04:25,040 --> 00:04:27,000 Speaker 2: have a lot of money to spend, unless, of course, 80 00:04:27,000 --> 00:04:29,040 Speaker 2: they were to sort of change their debt limits and 81 00:04:29,080 --> 00:04:30,720 Speaker 2: all that sort of thing. But politically there's a lot 82 00:04:30,720 --> 00:04:33,680 Speaker 2: of pushback against that, a lot of concern about the 83 00:04:34,160 --> 00:04:37,680 Speaker 2: level of national debt. So they've got these constraints they 84 00:04:37,880 --> 00:04:40,320 Speaker 2: I guess, you know, it's a center right government. It's 85 00:04:40,600 --> 00:04:45,000 Speaker 2: really trying to restrict the sort of relative value of 86 00:04:45,320 --> 00:04:48,599 Speaker 2: benefits relative to work. I mean, they're trying to create jobs. 87 00:04:48,640 --> 00:04:52,200 Speaker 2: They're trying to create incentives for people to find jobs. 88 00:04:52,520 --> 00:04:54,920 Speaker 2: The flaw in the argument is the rising unemployment. They 89 00:04:54,920 --> 00:04:57,720 Speaker 2: need to be creating jobs so that there are alternatives 90 00:04:57,760 --> 00:05:00,880 Speaker 2: there for people on benefits, and se to be several 91 00:05:00,880 --> 00:05:01,760 Speaker 2: months away from that. 92 00:05:01,839 --> 00:05:02,159 Speaker 1: People. 93 00:05:02,440 --> 00:05:06,080 Speaker 2: You know, the economists don't see unemployment peaking until the 94 00:05:06,480 --> 00:05:09,040 Speaker 2: second half of this year, or perhaps perhaps earlier, perhaps 95 00:05:09,080 --> 00:05:11,560 Speaker 2: in the middle of this year, and then hopefully we'll 96 00:05:11,560 --> 00:05:15,080 Speaker 2: see some employment creation and a more flexible job market, 97 00:05:15,160 --> 00:05:17,360 Speaker 2: and that will mean that people have more opportunity. 98 00:05:19,000 --> 00:05:22,000 Speaker 3: Our strong expectation is that those who are able to 99 00:05:22,080 --> 00:05:25,080 Speaker 3: work should work, and that more people who are working 100 00:05:25,120 --> 00:05:27,280 Speaker 3: and the fewer who are on welfare, the better for 101 00:05:27,360 --> 00:05:29,960 Speaker 3: them and their future, the better for their families, the 102 00:05:29,960 --> 00:05:32,080 Speaker 3: better for the economy, and the better for New Zealand. 103 00:05:32,200 --> 00:05:35,200 Speaker 3: We will do everything everything that we can to support 104 00:05:35,240 --> 00:05:38,200 Speaker 3: people off welfare and into work and ultimately a better 105 00:05:38,240 --> 00:05:40,920 Speaker 3: life for themselves and for their families. Under our government, 106 00:05:41,040 --> 00:05:44,400 Speaker 3: we are making clear our expectation that those who can 107 00:05:44,520 --> 00:05:47,880 Speaker 3: work should be taking all reasonable steps to find a job, 108 00:05:47,960 --> 00:05:51,200 Speaker 3: and those who do not will face consequences. 109 00:05:53,640 --> 00:05:55,880 Speaker 1: And politically as well. I guess they're not going to 110 00:05:55,880 --> 00:05:59,440 Speaker 1: be losing any of their voter base by keeping beneficiary 111 00:05:59,560 --> 00:06:00,839 Speaker 1: increase is at a minimum. 112 00:06:00,880 --> 00:06:05,080 Speaker 2: Hey, you'd imagine not a huge amount. I can't Politically, 113 00:06:05,080 --> 00:06:07,599 Speaker 2: I'm not sure what the split is for beneficiaries voting 114 00:06:07,640 --> 00:06:11,040 Speaker 2: for center right parties. But yeah, I mean there is 115 00:06:11,120 --> 00:06:14,039 Speaker 2: some politics to it. I mean it certainly they want 116 00:06:14,080 --> 00:06:19,040 Speaker 2: to be seen to be disincentivizing the benefits and encouraging 117 00:06:19,080 --> 00:06:21,240 Speaker 2: people to look for work, to get into work. That's 118 00:06:21,279 --> 00:06:23,240 Speaker 2: been a real mantra for the government. As I say, 119 00:06:23,360 --> 00:06:25,960 Speaker 2: just that slight flow in the problem that the unemployment 120 00:06:26,040 --> 00:06:28,200 Speaker 2: rate is rising, there are more people going on to 121 00:06:28,279 --> 00:06:31,280 Speaker 2: job seeker benefits because there isn't the employment being created 122 00:06:31,400 --> 00:06:34,560 Speaker 2: right now now. The government will argue I'm sure that 123 00:06:34,680 --> 00:06:37,120 Speaker 2: growth is coming, that we've seen the economy come out 124 00:06:37,160 --> 00:06:40,479 Speaker 2: of recession. The thing is, say this a lot. The 125 00:06:40,560 --> 00:06:42,719 Speaker 2: labor market tends to lag. It's one of the last 126 00:06:42,720 --> 00:06:46,000 Speaker 2: things to turn in an economic cycle. So, you know, 127 00:06:46,240 --> 00:06:49,400 Speaker 2: touch Wood hopeful that in the next few months will 128 00:06:49,440 --> 00:06:50,480 Speaker 2: see some progress there. 129 00:06:50,680 --> 00:06:55,120 Speaker 1: Power prices are also going up a lot. Actually from Tuesday, 130 00:06:55,200 --> 00:06:58,960 Speaker 1: the average household's bill will go up by ten dollars 131 00:06:59,040 --> 00:07:01,440 Speaker 1: a month this year, and then for the next four 132 00:07:01,520 --> 00:07:03,880 Speaker 1: years it'll go up by five dollars a month. What's 133 00:07:03,920 --> 00:07:07,040 Speaker 1: happening behind the scenes to necessitate this change. 134 00:07:06,920 --> 00:07:08,760 Speaker 2: Yeah, that's going to feel quite rough to a lot 135 00:07:08,800 --> 00:07:13,000 Speaker 2: of households. Well, there's a few different things. One is Transpower, 136 00:07:13,080 --> 00:07:16,160 Speaker 2: the lines company that looks after the national infrastructure grid, 137 00:07:16,560 --> 00:07:18,480 Speaker 2: has said that look at they've got to go up 138 00:07:18,520 --> 00:07:21,120 Speaker 2: by ten dollars a month, and so those charges will 139 00:07:21,120 --> 00:07:24,400 Speaker 2: be passed through to consumers via the power companies. So 140 00:07:24,440 --> 00:07:26,560 Speaker 2: that's part of it. But also some of the power 141 00:07:26,560 --> 00:07:30,360 Speaker 2: companies I've seen, for example, Mercury has said, you know, 142 00:07:30,440 --> 00:07:33,600 Speaker 2: because of other factors like needing to invest in more 143 00:07:33,600 --> 00:07:36,560 Speaker 2: power generation and invest in more you know, I guess 144 00:07:36,560 --> 00:07:38,720 Speaker 2: that means wind farms, solar, all that sort of stuff, 145 00:07:38,760 --> 00:07:41,640 Speaker 2: they need to put prices up. And also it's been 146 00:07:41,680 --> 00:07:44,320 Speaker 2: a relatively dry summer, so lakes are low, so the 147 00:07:44,360 --> 00:07:46,800 Speaker 2: wholesale prices are up a bit as well, so people 148 00:07:46,840 --> 00:07:48,600 Speaker 2: are going to I mean that's more more of a 149 00:07:48,640 --> 00:07:51,600 Speaker 2: gradual thing, but combined, people are going to feel that. 150 00:07:51,800 --> 00:07:55,240 Speaker 2: You know, people are still very sensitive about inflation. We 151 00:07:55,280 --> 00:07:57,960 Speaker 2: talked before about benefits going up by the inflation rate. Well, 152 00:07:58,000 --> 00:08:00,960 Speaker 2: you know, the inflation rate isn't just a uniform thing 153 00:08:01,000 --> 00:08:03,960 Speaker 2: that people experience. They experience it differently. And some people, 154 00:08:04,040 --> 00:08:06,200 Speaker 2: if they're paying a lot for power, and if they're 155 00:08:06,200 --> 00:08:10,080 Speaker 2: also facing increases for council rates and insurance bills, maybe 156 00:08:10,080 --> 00:08:12,720 Speaker 2: feeling like inflation is still a real problem and they're 157 00:08:12,720 --> 00:08:15,320 Speaker 2: really still feeling the cost of living crisis. The official 158 00:08:15,360 --> 00:08:17,720 Speaker 2: stats will tell you that it's back under control at 159 00:08:17,760 --> 00:08:20,120 Speaker 2: two point two percent an average two point two percent, 160 00:08:20,120 --> 00:08:22,840 Speaker 2: which is about where central banks want inflation to be. 161 00:08:22,960 --> 00:08:24,560 Speaker 2: But I think they really need to keep it down 162 00:08:24,600 --> 00:08:27,160 Speaker 2: there for a long time before people start to feel 163 00:08:27,200 --> 00:08:29,320 Speaker 2: like they've got through this sort of cost of living crunch. 164 00:08:29,480 --> 00:08:33,000 Speaker 2: I think generally people are feeling like there is still 165 00:08:33,480 --> 00:08:35,000 Speaker 2: a cost of living crisis out there. 166 00:08:45,600 --> 00:08:49,479 Speaker 1: The interest on student loan payments is also going. 167 00:08:49,200 --> 00:08:51,280 Speaker 2: Our pay Yeah. I don't think it's the interest so much, 168 00:08:51,320 --> 00:08:54,080 Speaker 2: it's the amount that you have to pay so while 169 00:08:54,080 --> 00:08:57,160 Speaker 2: you're in New Zealand, student loans are interest free. But 170 00:08:57,920 --> 00:08:59,960 Speaker 2: what they've got it done is there is an incremental 171 00:09:00,640 --> 00:09:05,520 Speaker 2: increase to the amount that you'll have to pay out 172 00:09:05,520 --> 00:09:07,880 Speaker 2: of your wages. So effectively they're saying to people that 173 00:09:07,880 --> 00:09:09,439 Speaker 2: you'll have to pay them back a little bit faster. 174 00:09:09,679 --> 00:09:10,960 Speaker 2: I don't think it's a lot. I think it was 175 00:09:11,000 --> 00:09:12,880 Speaker 2: like something like a dollar twenty a week or something. 176 00:09:12,880 --> 00:09:15,560 Speaker 2: But that's possibly you could say a good thing because 177 00:09:15,640 --> 00:09:18,440 Speaker 2: you know, okay, it's another squeeze on your wallet on 178 00:09:18,480 --> 00:09:20,480 Speaker 2: the weekly basis, but not by a huge amount. But 179 00:09:20,480 --> 00:09:22,840 Speaker 2: it does mean that you're actually paying off the principle 180 00:09:22,920 --> 00:09:25,679 Speaker 2: faster and getting that loan under control. So I guess 181 00:09:25,720 --> 00:09:27,920 Speaker 2: the government is keen to get the balances down, so 182 00:09:27,960 --> 00:09:31,200 Speaker 2: they haven't adjusted the thresholds that would sort of keep 183 00:09:31,320 --> 00:09:34,199 Speaker 2: the extra payments from going up. They've left it there 184 00:09:34,240 --> 00:09:35,920 Speaker 2: so that you are having to pay a little bit more. 185 00:09:35,960 --> 00:09:37,640 Speaker 2: But yeah, if it helps people get their loans paid 186 00:09:37,640 --> 00:09:39,959 Speaker 2: off quicker, then that's not such a bad thing. 187 00:09:40,200 --> 00:09:43,200 Speaker 1: And this one won't impact the average keyw but the 188 00:09:43,360 --> 00:09:47,400 Speaker 1: active investor plus visa is seeing some changes as well. 189 00:09:47,400 --> 00:09:48,679 Speaker 1: I believe what is that. 190 00:09:48,920 --> 00:09:52,079 Speaker 2: This is part of a policy by the government to 191 00:09:52,120 --> 00:09:57,440 Speaker 2: effectively attract more wealthy people into New Zealand with the 192 00:09:57,480 --> 00:09:59,640 Speaker 2: hope that they'll be investing in the productive end of 193 00:09:59,640 --> 00:10:03,680 Speaker 2: theonomy and creating the jobs which we talked about needing earlier. 194 00:10:03,800 --> 00:10:09,320 Speaker 2: So they've introduced two new investment categories, Growth and Balanced. 195 00:10:09,360 --> 00:10:12,560 Speaker 2: And so if you've got a minimum investment of five 196 00:10:12,600 --> 00:10:15,920 Speaker 2: million dollars and prepared to put that into what they 197 00:10:15,960 --> 00:10:19,640 Speaker 2: consider sort of highly productive parts of the economy, so 198 00:10:19,720 --> 00:10:22,720 Speaker 2: like tech startups and all that sort of thing, investing 199 00:10:22,720 --> 00:10:24,960 Speaker 2: in New Zealand business basically, then there is a visa 200 00:10:25,280 --> 00:10:29,280 Speaker 2: a immigration visa category available to you to come and 201 00:10:29,480 --> 00:10:31,320 Speaker 2: live in New Zealand. There's also a sort of a 202 00:10:31,360 --> 00:10:34,800 Speaker 2: balanced category for investors over a five year term. The 203 00:10:35,200 --> 00:10:37,760 Speaker 2: growth ones over a three year term, the balanced one 204 00:10:38,120 --> 00:10:41,120 Speaker 2: allows you to have a bit more sort of boring investment, 205 00:10:41,200 --> 00:10:43,640 Speaker 2: so that includes property and bonds and things, but you've 206 00:10:43,640 --> 00:10:45,520 Speaker 2: got to bring in ten million dollars. And I guess 207 00:10:45,800 --> 00:10:48,040 Speaker 2: this is part of a view that you know, we 208 00:10:48,080 --> 00:10:51,440 Speaker 2: need some more dynamic capital in this economy. You know, 209 00:10:51,480 --> 00:10:53,600 Speaker 2: we've got the banks that will lend for housing and 210 00:10:53,679 --> 00:10:56,440 Speaker 2: for some business stuff, but we don't have a large 211 00:10:56,520 --> 00:11:00,199 Speaker 2: amount of capital that it's going into startups and new business, 212 00:11:00,360 --> 00:11:03,080 Speaker 2: and often that into the economy is finding it harder 213 00:11:03,120 --> 00:11:04,800 Speaker 2: to get money to get up and running, to get 214 00:11:04,800 --> 00:11:07,319 Speaker 2: things going. And so yeah, I guess the government's hoping 215 00:11:07,400 --> 00:11:10,119 Speaker 2: that that will bring in these kind of wealthy individuals 216 00:11:10,160 --> 00:11:13,200 Speaker 2: and they will be able to push along our productivity 217 00:11:14,200 --> 00:11:15,680 Speaker 2: in the economy. 218 00:11:17,520 --> 00:11:20,000 Speaker 4: It is solid and the numbers do not lie. Not 219 00:11:20,080 --> 00:11:22,440 Speaker 4: only was it a positive number, but it was a 220 00:11:22,640 --> 00:11:26,760 Speaker 4: far bigger number than anyone was predicted. So let's take 221 00:11:26,800 --> 00:11:29,240 Speaker 4: the good news when it comes. Mike. There's always someone 222 00:11:29,280 --> 00:11:32,040 Speaker 4: who can think of a nancy negative way of looking 223 00:11:32,080 --> 00:11:34,480 Speaker 4: at it. But actually, this is an economy that has 224 00:11:34,520 --> 00:11:37,319 Speaker 4: been bouncing along the bottom for a very long time, 225 00:11:37,440 --> 00:11:40,040 Speaker 4: and now we are turning the corner. Let's celebrate that 226 00:11:40,200 --> 00:11:43,119 Speaker 4: it's set to continue. Let's have a positive mindset. 227 00:11:44,160 --> 00:11:47,640 Speaker 1: Liam. All these cash boosts and changes are welcome for 228 00:11:47,720 --> 00:11:50,720 Speaker 1: the economy, I'm sure, But how is it actually performing 229 00:11:50,760 --> 00:11:53,560 Speaker 1: at the moment. We were in recession a few cycles ago, 230 00:11:53,880 --> 00:11:57,720 Speaker 1: and I understand from the last data we just weeaked 231 00:11:57,760 --> 00:11:58,160 Speaker 1: out of it. 232 00:11:58,360 --> 00:12:00,720 Speaker 2: Oh it wasn't a bad it was the bad results. 233 00:12:00,720 --> 00:12:05,160 Speaker 2: There was zero point seven, So We definitely bounced out 234 00:12:05,200 --> 00:12:09,160 Speaker 2: of recession. We didn't bounce back to where we were previously, 235 00:12:09,240 --> 00:12:12,760 Speaker 2: because the two previous quarters saw the economy shrink by 236 00:12:12,800 --> 00:12:15,560 Speaker 2: about two point one percent. So we back up zero 237 00:12:15,640 --> 00:12:18,719 Speaker 2: point seven percent. We are hopefully on a path of 238 00:12:19,120 --> 00:12:22,800 Speaker 2: more sustained growth, so perhaps a few more quarters and 239 00:12:22,840 --> 00:12:24,880 Speaker 2: the economy will be as big as it was before 240 00:12:24,880 --> 00:12:26,960 Speaker 2: we went into recession. So it actually takes a while 241 00:12:27,040 --> 00:12:29,360 Speaker 2: to come back to that level. Yeah, so it's it's 242 00:12:29,600 --> 00:12:31,800 Speaker 2: still feels like a tough economy because you know, that 243 00:12:31,920 --> 00:12:33,760 Speaker 2: was a big recession. They were talking about it being 244 00:12:33,800 --> 00:12:37,520 Speaker 2: the biggest slump not counting the COVID crunch since since 245 00:12:37,640 --> 00:12:40,400 Speaker 2: nineteen ninety one, which was a really rough time. But 246 00:12:40,520 --> 00:12:43,280 Speaker 2: it is progress, so is it is a first step 247 00:12:43,320 --> 00:12:46,320 Speaker 2: on the path of recovery. So we have inflation under control, 248 00:12:46,520 --> 00:12:49,959 Speaker 2: hopefully again touchwood that doesn't flare up again. We've got 249 00:12:49,960 --> 00:12:53,160 Speaker 2: the economy out of recession. Really that the last piece 250 00:12:53,200 --> 00:12:55,960 Speaker 2: of the puzzle is probably jobs and to some extent, 251 00:12:56,040 --> 00:12:58,880 Speaker 2: confidence in the economy. So I think consumers in particular 252 00:12:58,880 --> 00:13:02,400 Speaker 2: are still feeling nervous about the state of the economy. 253 00:13:02,559 --> 00:13:05,360 Speaker 2: We've seen that in some consumer confidence surveys recently that 254 00:13:05,440 --> 00:13:07,800 Speaker 2: they just don't quite match where some of the other 255 00:13:08,200 --> 00:13:10,680 Speaker 2: more positive economic data is sitting. And I think that's 256 00:13:10,720 --> 00:13:15,040 Speaker 2: probably twofold one. That overhang of inflation. People still feeling 257 00:13:15,120 --> 00:13:18,200 Speaker 2: like even though the stats tell us inflation is under control, 258 00:13:18,440 --> 00:13:21,240 Speaker 2: it still feels like there is a cost of living issue. 259 00:13:21,240 --> 00:13:24,320 Speaker 2: And then it's that uncertainty around jobs. People aren't confident 260 00:13:24,320 --> 00:13:27,680 Speaker 2: about switching jobs. They may be worried about their own job, 261 00:13:28,160 --> 00:13:30,640 Speaker 2: and in fact some people are losing their jobs and 262 00:13:31,120 --> 00:13:34,559 Speaker 2: the numbers on job seeker is going up. So until 263 00:13:34,760 --> 00:13:38,280 Speaker 2: that piece comes into place, and I really, you know, 264 00:13:39,000 --> 00:13:41,240 Speaker 2: be hopeful that we see at peak and that some 265 00:13:41,280 --> 00:13:44,360 Speaker 2: of this positivity from growth coming back to the economy 266 00:13:44,400 --> 00:13:47,280 Speaker 2: flows through. So you know, it's a sort of cautiously 267 00:13:47,280 --> 00:13:49,160 Speaker 2: optimistic tone. Yeah, And of. 268 00:13:49,040 --> 00:13:52,600 Speaker 1: Course the ocr was cut further last month. What are 269 00:13:52,640 --> 00:13:56,120 Speaker 1: economists predicting in terms of more cuts at the moment, 270 00:13:56,240 --> 00:13:59,040 Speaker 1: especially now that Adrian Or is out as a Reserve 271 00:13:59,080 --> 00:13:59,680 Speaker 1: Bank governor. 272 00:14:00,080 --> 00:14:02,400 Speaker 2: Yeah, I mean it was interesting to see the governor go. 273 00:14:02,720 --> 00:14:04,920 Speaker 2: It was a big story, but I don't think it'll 274 00:14:05,000 --> 00:14:07,679 Speaker 2: change the outlook for the Reserve Bank in the near future. 275 00:14:07,720 --> 00:14:11,079 Speaker 2: They've sort of penciled in a twenty five basis point 276 00:14:11,120 --> 00:14:13,640 Speaker 2: cut next month and then another one in May, and 277 00:14:13,679 --> 00:14:15,680 Speaker 2: that might be where they pause, so you know, so 278 00:14:15,720 --> 00:14:18,719 Speaker 2: that's another fifty basis points to come out. But economists 279 00:14:18,760 --> 00:14:23,280 Speaker 2: are saying, well, it's not necessarily going to drop mortgage 280 00:14:23,360 --> 00:14:26,320 Speaker 2: rates that much further because they're already priced in. 281 00:14:26,760 --> 00:14:26,840 Speaker 3: There. 282 00:14:26,920 --> 00:14:31,600 Speaker 2: Some movement on international borrowing costs also also affecting things, 283 00:14:31,640 --> 00:14:33,720 Speaker 2: so in some ways, you know, it might be getting 284 00:14:33,720 --> 00:14:35,840 Speaker 2: to the point where some of the best mortgage rates 285 00:14:35,960 --> 00:14:37,760 Speaker 2: we're going to see for a while out there now 286 00:14:38,240 --> 00:14:41,520 Speaker 2: or very soon. And an interesting phenomenon economists have noticed 287 00:14:41,880 --> 00:14:44,920 Speaker 2: is that there is a really high percentage in historic 288 00:14:45,080 --> 00:14:48,600 Speaker 2: terms for New Zealand of people on either floating mortgage 289 00:14:48,680 --> 00:14:51,200 Speaker 2: rates or on really short term fixed rates because people 290 00:14:51,240 --> 00:14:53,920 Speaker 2: have been holding off fixing longer because they're hoping that 291 00:14:53,960 --> 00:14:56,160 Speaker 2: the rates will come down further. And that's probably made 292 00:14:56,160 --> 00:14:58,000 Speaker 2: sense for the last few months. That means that there's 293 00:14:58,000 --> 00:15:00,760 Speaker 2: actually a lot of people who aren't yet getting the 294 00:15:00,760 --> 00:15:03,240 Speaker 2: full benefit of the rates cuts. They're they're sort of 295 00:15:03,280 --> 00:15:05,880 Speaker 2: holding off locking in and to take the benefit. They 296 00:15:05,920 --> 00:15:07,760 Speaker 2: want to wait until they sort of get the best deal. 297 00:15:07,920 --> 00:15:10,320 Speaker 2: And I think it will become apparent to more people 298 00:15:10,320 --> 00:15:12,480 Speaker 2: that it's time to lock in fairly soon. I mean, 299 00:15:12,480 --> 00:15:14,200 Speaker 2: I don't want to pick it exactly, but you know, 300 00:15:14,480 --> 00:15:17,120 Speaker 2: we'll see a lot of people locking into those lower rates, 301 00:15:17,160 --> 00:15:20,640 Speaker 2: and so that's where money's going back into people's pockets, 302 00:15:20,760 --> 00:15:24,000 Speaker 2: and that's really going to help assist with the recovery. 303 00:15:24,080 --> 00:15:26,840 Speaker 2: So we haven't yet seen it boost house prices much, 304 00:15:26,840 --> 00:15:28,920 Speaker 2: for example, and then and that may be to do 305 00:15:29,000 --> 00:15:32,120 Speaker 2: with people holding off on booking in those lower rates. 306 00:15:32,160 --> 00:15:33,640 Speaker 2: But you know, some of the things we've talked about 307 00:15:33,680 --> 00:15:35,880 Speaker 2: for April one this year, certainly not as much money 308 00:15:35,880 --> 00:15:38,360 Speaker 2: coming back to people, some things like the power prices, 309 00:15:38,600 --> 00:15:41,120 Speaker 2: money coming out of people's pockets. But if we see 310 00:15:41,120 --> 00:15:44,600 Speaker 2: a large number of mortgage holders fixing on lower rates 311 00:15:44,720 --> 00:15:47,120 Speaker 2: over the next few months, then that's going to be 312 00:15:47,160 --> 00:15:49,920 Speaker 2: a lot more money coming into the households and that 313 00:15:50,000 --> 00:15:53,520 Speaker 2: should hopefully boost consumer confidence and add to the momentum 314 00:15:53,560 --> 00:15:56,720 Speaker 2: in the economy, which is just still pretty fragile at 315 00:15:56,720 --> 00:15:57,080 Speaker 2: the moment. 316 00:15:57,160 --> 00:16:04,120 Speaker 1: Thanks for joining us, Liam, Cheers. That's it for this 317 00:16:04,280 --> 00:16:07,400 Speaker 1: episode of the Front Page. You can read more about 318 00:16:07,440 --> 00:16:11,960 Speaker 1: today's stories and extensive news coverage at enzdherld dot co 319 00:16:12,280 --> 00:16:16,160 Speaker 1: dot MZ. The Front Page is produced by Ethan Sills 320 00:16:16,240 --> 00:16:20,200 Speaker 1: and Richard Martin, who is also a sound engineer. I'm 321 00:16:20,360 --> 00:16:24,640 Speaker 1: Chelsea Daniels. Subscribe to the Front Page on iHeartRadio or 322 00:16:24,720 --> 00:16:27,480 Speaker 1: where if you get your podcasts, and tune in on 323 00:16:27,680 --> 00:16:30,760 Speaker 1: Monday for another look behind the headlines.