1 00:00:00,040 --> 00:00:01,800 Speaker 1: Now, I think we can all agree that survived till 2 00:00:01,840 --> 00:00:03,120 Speaker 1: twenty five turned out to be a bit of a 3 00:00:03,160 --> 00:00:06,480 Speaker 1: dud slogan as the economy struggled all along along all 4 00:00:06,519 --> 00:00:08,920 Speaker 1: of this year. So we'll stay in the mix until 5 00:00:08,920 --> 00:00:10,640 Speaker 1: twenty six turn into a dud as well. Or do 6 00:00:10,720 --> 00:00:13,319 Speaker 1: we actually believe these green shoots stories. Paul Bloxham as 7 00:00:13,400 --> 00:00:16,160 Speaker 1: hspc's chief economist, regular on the show. He's been traveling 8 00:00:16,239 --> 00:00:18,079 Speaker 1: the country all week high Paul, Welcome. 9 00:00:17,800 --> 00:00:18,360 Speaker 2: To the studio. 10 00:00:19,000 --> 00:00:19,680 Speaker 3: Great to be here. 11 00:00:19,840 --> 00:00:21,720 Speaker 2: It's lovely to have you, now, are you? I mean 12 00:00:21,760 --> 00:00:23,880 Speaker 2: you are pretty confident about next year. We've been talking 13 00:00:23,920 --> 00:00:25,800 Speaker 2: about this all year, right, that's right. 14 00:00:25,840 --> 00:00:27,960 Speaker 4: Well, we thought in New Zealand's economy would pick up 15 00:00:27,960 --> 00:00:30,040 Speaker 4: a little bit more strongly this year. It's taken just 16 00:00:30,080 --> 00:00:32,600 Speaker 4: a bit longer to arrive than we had in mind, 17 00:00:32,600 --> 00:00:34,680 Speaker 4: and of course the RBNZ and because of that has 18 00:00:34,760 --> 00:00:37,960 Speaker 4: ended up delivering more easy cutting by another seventy five 19 00:00:38,000 --> 00:00:40,000 Speaker 4: basis points. But that just adds a bit more fuel 20 00:00:40,080 --> 00:00:42,599 Speaker 4: to this story as far as we see, and we 21 00:00:42,640 --> 00:00:45,040 Speaker 4: do think that growth will pick up fairly solidly into 22 00:00:45,040 --> 00:00:47,000 Speaker 4: the last part of this year and running into twenty 23 00:00:47,040 --> 00:00:47,560 Speaker 4: twenty six. 24 00:00:47,680 --> 00:00:48,040 Speaker 3: As well. 25 00:00:48,159 --> 00:00:51,000 Speaker 4: Think we think the green shoots are there and things 26 00:00:51,000 --> 00:00:52,080 Speaker 4: are looking a bit brighter in New. 27 00:00:52,080 --> 00:00:53,400 Speaker 5: Zealand, matching Australia. 28 00:00:54,040 --> 00:00:56,640 Speaker 4: Look, we think that New Zealand because it has had 29 00:00:56,680 --> 00:00:59,000 Speaker 4: such an extended period I mean three years of no 30 00:00:59,160 --> 00:01:01,480 Speaker 4: growth in New Zealand. In effect, there's a lot of 31 00:01:01,520 --> 00:01:04,160 Speaker 4: scope for things to pick up, and so we're forecasting 32 00:01:04,200 --> 00:01:07,039 Speaker 4: that growth will be stronger in New Zealand next year 33 00:01:07,120 --> 00:01:10,240 Speaker 4: than than Australia. I mean, Australia's got different issues. Australia 34 00:01:10,240 --> 00:01:12,839 Speaker 4: has no lack of demand. We've got plenty of demand. 35 00:01:13,080 --> 00:01:16,199 Speaker 4: We just haven't got enough supply. The economy can't grow 36 00:01:16,440 --> 00:01:19,240 Speaker 4: a much faster. In fact, it's probably already growing a little. 37 00:01:19,080 --> 00:01:20,360 Speaker 3: Faster than it is sustainable. 38 00:01:20,400 --> 00:01:23,080 Speaker 5: So no, we think New Zealand's going to have a stronger. 39 00:01:22,880 --> 00:01:24,919 Speaker 2: How much faster are we growing than aussy? 40 00:01:25,400 --> 00:01:28,319 Speaker 4: In our forecast next year GDP growth in New Zealand 41 00:01:28,360 --> 00:01:30,640 Speaker 4: is about two and a half percent and in Australia 42 00:01:31,040 --> 00:01:32,960 Speaker 4: is two point one just over too. So you know, 43 00:01:33,040 --> 00:01:35,399 Speaker 4: we're not talking about miles away, but we are talking 44 00:01:35,440 --> 00:01:38,640 Speaker 4: about after three years of essentially no growth in New Zealand, 45 00:01:38,920 --> 00:01:41,920 Speaker 4: you start to have a better time should. 46 00:01:41,680 --> 00:01:43,200 Speaker 2: At least stop the brain drain type thing. 47 00:01:43,600 --> 00:01:46,160 Speaker 5: Well, you know, so this is the this is one 48 00:01:46,200 --> 00:01:47,160 Speaker 5: element of that story. 49 00:01:47,200 --> 00:01:49,560 Speaker 4: Once the economy starts to get going and firms start 50 00:01:49,600 --> 00:01:51,200 Speaker 4: to do a bit more hiring and the labor market 51 00:01:51,240 --> 00:01:53,120 Speaker 4: starts to tighten up, that'll keep a few more people 52 00:01:53,120 --> 00:01:55,040 Speaker 4: here and it will bring back a few more people 53 00:01:55,120 --> 00:01:58,640 Speaker 4: from Australia. And if Australia's story is one where actually 54 00:01:58,680 --> 00:02:01,360 Speaker 4: it just can't keep growing or needs to even slow 55 00:02:01,400 --> 00:02:04,600 Speaker 4: down a bit because well you're already running up against 56 00:02:04,600 --> 00:02:06,920 Speaker 4: your capacity constraints, then New Zealand's going to start to 57 00:02:06,920 --> 00:02:07,840 Speaker 4: look a bit more attractive. 58 00:02:07,840 --> 00:02:09,800 Speaker 3: And that's the story we've got in mind. 59 00:02:10,080 --> 00:02:11,880 Speaker 2: Do we ever get back to being a rock star 60 00:02:11,960 --> 00:02:12,640 Speaker 2: economy again? 61 00:02:12,880 --> 00:02:15,000 Speaker 4: I think, as I said to you maybe before when 62 00:02:15,040 --> 00:02:17,320 Speaker 4: you've asked me this question, yeah, I think you need 63 00:02:17,360 --> 00:02:20,440 Speaker 4: to aspire to try and be a rock star. I mean, 64 00:02:20,480 --> 00:02:22,480 Speaker 4: when we talked about that rockstar idea, which has got 65 00:02:22,600 --> 00:02:24,480 Speaker 4: momentum of its own, and this is back in twenty fourteen, 66 00:02:25,040 --> 00:02:28,400 Speaker 4: you were the fastest growing economy in the developed world 67 00:02:28,520 --> 00:02:31,040 Speaker 4: in that particular year, and so we marked it out early. 68 00:02:31,160 --> 00:02:33,240 Speaker 4: We got that call right, and of course it's had 69 00:02:33,280 --> 00:02:35,640 Speaker 4: a life of its own. So the question now is 70 00:02:35,680 --> 00:02:39,080 Speaker 4: can you have the strongest economy across that set of 71 00:02:39,080 --> 00:02:39,800 Speaker 4: countries again? 72 00:02:39,840 --> 00:02:42,600 Speaker 5: And I think, well, we'll see, you should. 73 00:02:42,320 --> 00:02:42,919 Speaker 3: Aspire to it. 74 00:02:43,320 --> 00:02:44,200 Speaker 2: You with a hope you may. 75 00:02:44,440 --> 00:02:46,400 Speaker 4: I think you're in an upswing, as I say, I think, 76 00:02:46,400 --> 00:02:47,480 Speaker 4: I think there's some green shoots. 77 00:02:47,560 --> 00:02:48,520 Speaker 3: Things are looking brighter. 78 00:02:48,720 --> 00:02:51,520 Speaker 4: And you know, we'll as we get into next year, 79 00:02:51,560 --> 00:02:52,920 Speaker 4: if we get a little bit more menum, we'll have 80 00:02:52,960 --> 00:02:54,600 Speaker 4: a think about how much wronger you can be. 81 00:02:54,840 --> 00:02:57,280 Speaker 1: I was at a thing a couple of months ago, right, 82 00:02:57,320 --> 00:02:59,320 Speaker 1: and we had a look at our relative There was 83 00:02:59,320 --> 00:03:01,320 Speaker 1: a chart up on the projector and it was our 84 00:03:01,360 --> 00:03:03,800 Speaker 1: relative prosperity in New Zealand and contrast to you know, 85 00:03:03,840 --> 00:03:07,520 Speaker 1: other developed countries. And really in the last probably you 86 00:03:07,520 --> 00:03:10,080 Speaker 1: could say six seven decades, we have slipped further and 87 00:03:10,120 --> 00:03:12,480 Speaker 1: further back in terms of our GDP per capita or 88 00:03:12,520 --> 00:03:15,080 Speaker 1: our relative wealth per person. So it seems to me, 89 00:03:15,120 --> 00:03:18,079 Speaker 1: actually the path that we're on is not actually get it. 90 00:03:18,080 --> 00:03:19,839 Speaker 1: It's not growing us in the way that we want 91 00:03:19,880 --> 00:03:21,720 Speaker 1: to grow per capita. So what do we need to 92 00:03:21,720 --> 00:03:23,840 Speaker 1: do here, Paul? Do we need to do something fundamental 93 00:03:23,880 --> 00:03:27,320 Speaker 1: in this economy, something like Ireland or Singapore, which are 94 00:03:27,360 --> 00:03:27,920 Speaker 1: being talked about. 95 00:03:28,040 --> 00:03:30,000 Speaker 4: You need to do as much reform as you can 96 00:03:30,040 --> 00:03:33,160 Speaker 4: that attracts as much investment into the places you need them. 97 00:03:33,160 --> 00:03:34,800 Speaker 4: I mean, when you need to work on the supply 98 00:03:34,880 --> 00:03:36,160 Speaker 4: side of your economy as well. 99 00:03:36,040 --> 00:03:37,800 Speaker 2: Would you go as hard as slashing the corporate tax 100 00:03:37,880 --> 00:03:38,200 Speaker 2: right here? 101 00:03:38,360 --> 00:03:40,680 Speaker 4: I think that it's something should be on the agenda 102 00:03:40,680 --> 00:03:42,880 Speaker 4: that tax reforms should definitely be part of part of 103 00:03:42,920 --> 00:03:43,320 Speaker 4: the mix. 104 00:03:43,880 --> 00:03:45,320 Speaker 2: I mean, would you go as low as fifteen? 105 00:03:45,400 --> 00:03:47,600 Speaker 4: What you're effectively doing is looking to open up the 106 00:03:47,680 --> 00:03:50,000 Speaker 4: economy as much as possible, not just to local investors 107 00:03:50,000 --> 00:03:51,400 Speaker 4: but also global investors as well. 108 00:03:51,400 --> 00:03:52,640 Speaker 2: Would you go as low as fifteen? 109 00:03:52,720 --> 00:03:54,600 Speaker 3: I think that, you know, it just depends. 110 00:03:54,680 --> 00:03:57,000 Speaker 4: I mean these the numbers we haven't got sort of 111 00:03:57,040 --> 00:03:59,280 Speaker 4: specifics on, but I think you need to look really 112 00:03:59,320 --> 00:04:02,680 Speaker 4: hard things like tax reform that could potentially make it 113 00:04:02,720 --> 00:04:05,920 Speaker 4: more attractive to invest here. I think infrastructure has still 114 00:04:05,920 --> 00:04:08,000 Speaker 4: got to be a focus. I mean, the big one 115 00:04:08,040 --> 00:04:10,320 Speaker 4: of the really interesting growth stories that's going on in 116 00:04:10,320 --> 00:04:13,200 Speaker 4: Australia that's really just getting started and actually hasn't got 117 00:04:13,280 --> 00:04:15,680 Speaker 4: enough attention yet is the data center build out and 118 00:04:15,720 --> 00:04:19,360 Speaker 4: the AI story and the software export, software license export story. 119 00:04:19,480 --> 00:04:22,040 Speaker 4: So Australia's got this little tech story that's actually still 120 00:04:22,120 --> 00:04:24,560 Speaker 4: quite small but growing quite quickly, and there's really no 121 00:04:24,600 --> 00:04:27,000 Speaker 4: reason why New Zealand couldn't be on that sort of 122 00:04:27,040 --> 00:04:30,920 Speaker 4: story as well. So there are growth engines you can see, 123 00:04:31,120 --> 00:04:34,000 Speaker 4: but you need to be attractive to that local and 124 00:04:34,040 --> 00:04:35,800 Speaker 4: global industrial So the reason I brought up. 125 00:04:35,760 --> 00:04:37,720 Speaker 1: This chart is that what had showed me was that 126 00:04:37,760 --> 00:04:40,640 Speaker 1: we were It felt to me like the tinkering that 127 00:04:40,640 --> 00:04:41,360 Speaker 1: we're at at the moment. 128 00:04:41,400 --> 00:04:41,839 Speaker 2: A little bit of. 129 00:04:41,839 --> 00:04:43,640 Speaker 1: Reform here, a little bit of reform cutting some red 130 00:04:43,640 --> 00:04:46,400 Speaker 1: tape that's really like what we need. The way that 131 00:04:46,440 --> 00:04:50,720 Speaker 1: we're slipping backwards actually needs some fundaments, really bold, really 132 00:04:50,760 --> 00:04:53,960 Speaker 1: bold ideas. Am I just getting way over my skis 133 00:04:54,000 --> 00:04:54,839 Speaker 1: here or do you agree? 134 00:04:54,920 --> 00:04:55,000 Speaker 3: No? 135 00:04:55,200 --> 00:04:56,960 Speaker 4: You need to do you need to focus on supply 136 00:04:57,000 --> 00:04:59,400 Speaker 4: side reform. I think there's been some that's been moving 137 00:04:59,440 --> 00:05:01,279 Speaker 4: in the right direct. You describe it as tinkering, but 138 00:05:01,320 --> 00:05:04,000 Speaker 4: I think it is moving in the right direction. But 139 00:05:04,080 --> 00:05:06,000 Speaker 4: you need to have as bolder ideas as you can 140 00:05:06,000 --> 00:05:09,520 Speaker 4: possibly manage to deliver because you've got to attract more investment, 141 00:05:09,520 --> 00:05:11,400 Speaker 4: you've got to expand the capital stock, you've got to 142 00:05:11,440 --> 00:05:14,400 Speaker 4: focus on lifting productivity in New Zealand as well. I've 143 00:05:14,440 --> 00:05:16,320 Speaker 4: spent a lot of time talking about how much Australian 144 00:05:16,320 --> 00:05:17,880 Speaker 4: needs to do that, and they're not doing enough and 145 00:05:17,920 --> 00:05:20,640 Speaker 4: hence they're hitting their capacity constraints. New Zealand's got that 146 00:05:20,720 --> 00:05:23,000 Speaker 4: as an agenda too. But actually the primary agenda for 147 00:05:23,000 --> 00:05:25,679 Speaker 4: New Zealand of late has been pump priming demand, actually 148 00:05:25,680 --> 00:05:28,640 Speaker 4: getting the economy and getting confidence to improve and getting 149 00:05:29,200 --> 00:05:32,000 Speaker 4: things to turn around. I think that's starting to get underway, 150 00:05:32,320 --> 00:05:34,159 Speaker 4: and then of course a long way along that, a 151 00:05:34,200 --> 00:05:37,000 Speaker 4: long way. At the same time, the simultaneous focus ought 152 00:05:37,040 --> 00:05:38,880 Speaker 4: to be on these supply side issues, and as you 153 00:05:38,920 --> 00:05:41,600 Speaker 4: head towards an election next year, this ought to be 154 00:05:41,680 --> 00:05:43,600 Speaker 4: something that's very much in focus as well, should be. 155 00:05:43,520 --> 00:05:43,960 Speaker 2: Talking about it. 156 00:05:44,040 --> 00:05:45,680 Speaker 1: Yet now this is the last time I'm going to 157 00:05:45,680 --> 00:05:47,520 Speaker 1: talk to you before Christmas, So Merry Christmas and what 158 00:05:47,560 --> 00:05:48,040 Speaker 1: are you doing. 159 00:05:48,960 --> 00:05:52,760 Speaker 4: I'm going to spend Christmas in Western Australia where I'm from. 160 00:05:52,800 --> 00:05:54,640 Speaker 4: Actually I grew up in Perth, and we're going to 161 00:05:54,680 --> 00:05:57,960 Speaker 4: go home and spend time with my family. It's going 162 00:05:58,040 --> 00:06:00,520 Speaker 4: to be a couple of weeks of hopefully putting down 163 00:06:00,560 --> 00:06:02,320 Speaker 4: all the tools and not getting involved. 164 00:06:02,320 --> 00:06:04,160 Speaker 5: It's very hard for me. I really love what I do, 165 00:06:04,240 --> 00:06:04,560 Speaker 5: but I. 166 00:06:04,520 --> 00:06:06,159 Speaker 1: Need to get your take on something you said you 167 00:06:06,200 --> 00:06:07,680 Speaker 1: take in a couple of weeks off. We discussed this 168 00:06:07,760 --> 00:06:09,960 Speaker 1: on the show yesterday whether our summer holidays are getting 169 00:06:09,960 --> 00:06:11,760 Speaker 1: too long? Are they getting too long in New Zealand? 170 00:06:11,839 --> 00:06:13,000 Speaker 1: Is it a problem for productivity? 171 00:06:13,880 --> 00:06:15,800 Speaker 4: I think it's great that we have a pause and 172 00:06:15,839 --> 00:06:18,040 Speaker 4: we get to do a reset. This is important for everyone, 173 00:06:18,080 --> 00:06:19,800 Speaker 4: and it's good that we do it collectively. I think 174 00:06:19,800 --> 00:06:23,080 Speaker 4: that's an important feature. And like other regions do this too. 175 00:06:23,240 --> 00:06:25,560 Speaker 4: Europe it's always, you know, July and August, they have 176 00:06:25,600 --> 00:06:27,960 Speaker 4: a long stretch where everyone gets to sort of unwind 177 00:06:28,000 --> 00:06:30,279 Speaker 4: and come back fresh. So I think that this is 178 00:06:30,360 --> 00:06:32,000 Speaker 4: just a part of what we do down here in 179 00:06:32,080 --> 00:06:35,040 Speaker 4: the Antipodeans is have our summer break over. 180 00:06:34,880 --> 00:06:35,520 Speaker 3: A Listmas time. 181 00:06:35,560 --> 00:06:36,120 Speaker 2: That's what I think. 182 00:06:36,279 --> 00:06:39,600 Speaker 1: Merry Christmas, thank you, thank you so much, Paul, appreciate it. Okay, 183 00:06:39,839 --> 00:06:43,280 Speaker 1: Paul blocks some agspecies Chief Economists. For more from Hither 184 00:06:43,360 --> 00:06:46,440 Speaker 1: Duplessy Alan Drive, listen live to news talks it'd be 185 00:06:46,520 --> 00:06:50,360 Speaker 1: from four pm weekdays, or follow the podcast on iHeartRadio.