1 00:00:00,320 --> 00:00:04,320 Speaker 1: Ryan Bridge, Treasury and Wellington has warned the government might 2 00:00:04,360 --> 00:00:06,520 Speaker 1: have to reduce public services if it wants to stick 3 00:00:06,519 --> 00:00:09,960 Speaker 1: to its spending plans. It's also forecasting that we won't 4 00:00:09,960 --> 00:00:14,120 Speaker 1: get back to surplus until twenty thirty one. The Finance 5 00:00:14,200 --> 00:00:17,520 Speaker 1: Minister Nikola Willis decided not to publish Treasury's longer range 6 00:00:17,520 --> 00:00:21,520 Speaker 1: forecasts in December, saying the projections were highly uncertain infa 7 00:00:21,520 --> 00:00:24,120 Speaker 1: metric's principle. Economist Brad Olson is with me, Hey, Brad, 8 00:00:25,120 --> 00:00:27,240 Speaker 1: good evening, are they highly uncertain? 9 00:00:28,760 --> 00:00:31,880 Speaker 2: Oh, the projections are always highly uncertain, But I don't 10 00:00:31,880 --> 00:00:34,760 Speaker 2: think that's a reason not to publish them. With the 11 00:00:34,760 --> 00:00:37,279 Speaker 2: fiscal strategy model, I mean that is important for us 12 00:00:37,320 --> 00:00:39,720 Speaker 2: thinking about where things go next. The Government of the 13 00:00:39,800 --> 00:00:42,520 Speaker 2: day never sets out policy for the next fifteen years, 14 00:00:42,600 --> 00:00:45,120 Speaker 2: or if they do, they can't realistically believe that they 15 00:00:45,120 --> 00:00:48,480 Speaker 2: will actually achieve that for the next fifteen years. Everything 16 00:00:48,600 --> 00:00:50,479 Speaker 2: is sort of up for grabs over that sort of 17 00:00:50,479 --> 00:00:53,159 Speaker 2: period of time. So it's a little bit frustrating that 18 00:00:53,200 --> 00:00:55,080 Speaker 2: the Government of the day didn't want to publish those 19 00:00:55,120 --> 00:00:58,920 Speaker 2: figures because we do use those as forecasters, as modelers 20 00:00:58,920 --> 00:01:01,840 Speaker 2: to try and understand bit where things are going. But 21 00:01:01,920 --> 00:01:05,039 Speaker 2: suffice to say the Treasury has highlighted in there that 22 00:01:05,080 --> 00:01:09,680 Speaker 2: it's very difficult on the current settings to have effectively 23 00:01:09,720 --> 00:01:12,600 Speaker 2: the same size of government, but also with the sort 24 00:01:12,640 --> 00:01:15,039 Speaker 2: of levels of spending that the government wants to make. 25 00:01:15,319 --> 00:01:18,040 Speaker 2: And that is the difficult challenge the government has is 26 00:01:18,080 --> 00:01:20,959 Speaker 2: that on current settings we're spending a lot more than 27 00:01:21,000 --> 00:01:23,720 Speaker 2: the government is earning. That means we're in deficit. That 28 00:01:23,800 --> 00:01:26,720 Speaker 2: deficit will last for longer. And you can either grow 29 00:01:26,760 --> 00:01:29,559 Speaker 2: your revenue or you can cut your expenses, and there's 30 00:01:29,560 --> 00:01:31,400 Speaker 2: no really other two ways around it. 31 00:01:31,840 --> 00:01:35,680 Speaker 1: And the problem with cutting you with cutting your revenue 32 00:01:35,880 --> 00:01:38,680 Speaker 1: ie tax cuts. And we had Nickola Willis on the 33 00:01:38,680 --> 00:01:41,240 Speaker 1: show last night talking about the potential potential for corporate 34 00:01:41,280 --> 00:01:45,480 Speaker 1: tax cuts or for faster depreciation on manufacturing technology, which 35 00:01:45,520 --> 00:01:47,480 Speaker 1: I think is something that I really think is something 36 00:01:47,520 --> 00:01:50,080 Speaker 1: they'll look at. That stuff costs money in the short term, 37 00:01:50,160 --> 00:01:52,200 Speaker 1: but it takes a while to pay off in terms 38 00:01:52,200 --> 00:01:55,440 Speaker 1: of growing the pine, isn't it. It does? 39 00:01:55,480 --> 00:01:57,880 Speaker 2: And it also, I mean it's locked in. It's not 40 00:01:57,960 --> 00:02:00,320 Speaker 2: like it's just a one year change. You know. If 41 00:02:00,360 --> 00:02:03,120 Speaker 2: you change corporate tax settings or depreciation or similar, that's 42 00:02:03,520 --> 00:02:06,440 Speaker 2: a long term each and every year thing. It's also 43 00:02:06,560 --> 00:02:09,040 Speaker 2: clear though that the government does need to consider some 44 00:02:09,120 --> 00:02:10,840 Speaker 2: of those I mean, you look as well at the 45 00:02:10,960 --> 00:02:13,760 Speaker 2: likes of investing Z and trying to get more investment 46 00:02:13,800 --> 00:02:17,480 Speaker 2: into the country from overseas. Definitely an area that I'd support. 47 00:02:17,520 --> 00:02:20,359 Speaker 2: You know, economically that's critical, but it's harder to sell 48 00:02:20,440 --> 00:02:22,760 Speaker 2: to overseas when we have a corporate tax rate at 49 00:02:22,800 --> 00:02:25,520 Speaker 2: a higher level than many other jurisdictions globally. You know, 50 00:02:25,600 --> 00:02:28,239 Speaker 2: people will focus a little bit more on what sort 51 00:02:28,240 --> 00:02:30,000 Speaker 2: of text they have to pay on the profits that 52 00:02:30,040 --> 00:02:32,919 Speaker 2: they make. But like you've highlighted that, if you change 53 00:02:32,960 --> 00:02:34,920 Speaker 2: too much on the revenue side, you make what is 54 00:02:34,960 --> 00:02:39,079 Speaker 2: already a very difficult sort of set of circumstances even 55 00:02:39,160 --> 00:02:41,600 Speaker 2: more challenging. And so for the government, you know, they're 56 00:02:41,639 --> 00:02:44,560 Speaker 2: having to think about not only the sort of size 57 00:02:44,600 --> 00:02:47,399 Speaker 2: of investments that they are making in the short term 58 00:02:47,440 --> 00:02:50,360 Speaker 2: and the size of you know, budget surpluses are budget 59 00:02:50,400 --> 00:02:54,160 Speaker 2: allowances rather, but also longer term. Treasury highlighted that the 60 00:02:54,240 --> 00:02:57,120 Speaker 2: current large levels of infrastructure investment that we need to 61 00:02:57,120 --> 00:02:59,360 Speaker 2: make as a country, which I'm pretty sure everyone is 62 00:02:59,360 --> 00:03:02,680 Speaker 2: broadly on with. They say, given how high those are, 63 00:03:02,800 --> 00:03:06,320 Speaker 2: the operating costs of having so much additional new infrastructure 64 00:03:06,639 --> 00:03:08,320 Speaker 2: is going to cost us big in the long term 65 00:03:08,360 --> 00:03:10,760 Speaker 2: as well, So we really are now facing some pretty 66 00:03:10,760 --> 00:03:12,960 Speaker 2: thorny economic and fiscal issues. 67 00:03:13,600 --> 00:03:16,960 Speaker 1: How you're about to go to Jane Jones's party, I 68 00:03:17,120 --> 00:03:18,520 Speaker 1: hear have fun. 69 00:03:19,120 --> 00:03:20,280 Speaker 2: Indeed, thank you very much. 70 00:03:21,160 --> 00:03:23,280 Speaker 1: That is brad Olsen. It's coming to us from the 71 00:03:23,800 --> 00:03:28,600 Speaker 1: winterless North. 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