1 00:00:05,519 --> 00:00:05,960 Speaker 1: Kiyota. 2 00:00:06,040 --> 00:00:09,160 Speaker 2: I'm Chelsea Daniels and this is the Front Page, a 3 00:00:09,240 --> 00:00:17,440 Speaker 2: daily podcast presented by the New Zealand Herald. Inflation could 4 00:00:17,640 --> 00:00:24,079 Speaker 2: hit three point seven percent under Treasury's worst case inflation scenario. 5 00:00:24,520 --> 00:00:27,680 Speaker 2: It's while petrol prices have risen about forty five to 6 00:00:27,720 --> 00:00:30,960 Speaker 2: fifty cents a leader, adding about twenty three dollars to 7 00:00:31,040 --> 00:00:35,000 Speaker 2: the price of filling an average car. Finance Minister Nikola 8 00:00:35,040 --> 00:00:38,960 Speaker 2: Willis has outlined the government's priorities, first of focus on 9 00:00:39,000 --> 00:00:44,600 Speaker 2: supply chains, then potential and anticipated freight disruptions, and lastly 10 00:00:44,760 --> 00:00:50,160 Speaker 2: are economic response. Ministers are meeting daily. Written situation updates 11 00:00:50,320 --> 00:00:54,160 Speaker 2: are twice daily. They're working closely with importers. We're being 12 00:00:54,280 --> 00:00:58,800 Speaker 2: told not to panic. But after criticizing the last government 13 00:00:58,840 --> 00:01:02,240 Speaker 2: to no end about its economic decisions during the pandemic, 14 00:01:02,800 --> 00:01:05,399 Speaker 2: what tools does this government have. 15 00:01:05,440 --> 00:01:07,600 Speaker 3: To ease cost of living pressures? 16 00:01:08,080 --> 00:01:10,720 Speaker 2: Today? On the front page ends at Herald Business Editor 17 00:01:10,760 --> 00:01:13,360 Speaker 2: at Large Liam dan Is with us to talk through 18 00:01:13,680 --> 00:01:20,200 Speaker 2: what we could do next. So, Liam, fuel prices are 19 00:01:20,280 --> 00:01:24,600 Speaker 2: obviously continuously rising. They're still slightly below their twenty twenty 20 00:01:24,600 --> 00:01:27,560 Speaker 2: two peak, but it's reasonable to assume that they will 21 00:01:27,600 --> 00:01:29,920 Speaker 2: get higher than the twenty twenty two price point, right, 22 00:01:29,959 --> 00:01:32,319 Speaker 2: so the government's rightly going to have to do something, 23 00:01:32,760 --> 00:01:36,040 Speaker 2: but Willis has said that they won't be splashing the cash. 24 00:01:36,080 --> 00:01:36,720 Speaker 3: Tell me why. 25 00:01:36,920 --> 00:01:39,160 Speaker 4: Yeah, I think when you look at it, the government's 26 00:01:39,319 --> 00:01:41,560 Speaker 4: trying to say that they're taking some lessons from the 27 00:01:41,600 --> 00:01:44,360 Speaker 4: COVID inquiry that we've just had, you know, for Tuitor's 28 00:01:44,400 --> 00:01:46,920 Speaker 4: timing for them in that sense, but they want to 29 00:01:46,959 --> 00:01:50,280 Speaker 4: make sure that anything is really targeted. They feel like 30 00:01:50,920 --> 00:01:55,400 Speaker 4: the previous government was sort of you know, it was 31 00:01:55,400 --> 00:01:59,880 Speaker 4: a genuine crisis, so they made it easy. They subsidized, 32 00:02:00,000 --> 00:02:04,200 Speaker 4: subsidized consumers, they put money into the economy. But of 33 00:02:04,240 --> 00:02:06,440 Speaker 4: course in hindsight we can see that the economy actually 34 00:02:06,480 --> 00:02:09,600 Speaker 4: coped quite well and that added to inflation. So that 35 00:02:09,919 --> 00:02:14,000 Speaker 4: the problem here is if you have an inflation problem 36 00:02:14,080 --> 00:02:16,840 Speaker 4: and you push more money supply into the economy, that 37 00:02:16,919 --> 00:02:22,280 Speaker 4: actually exacerbates inflation. So something like cutting the excise tax 38 00:02:22,320 --> 00:02:26,960 Speaker 4: on fuel would lower the cost of fuel, but would 39 00:02:26,960 --> 00:02:30,600 Speaker 4: increase demand for petrol at a time when you're trying 40 00:02:30,639 --> 00:02:34,600 Speaker 4: to restrict demand you actually want to use less petrol. 41 00:02:35,360 --> 00:02:37,280 Speaker 4: So yeah, those are some of the issues that would 42 00:02:37,480 --> 00:02:42,079 Speaker 4: count against sort of a broad subsidy for consumers. 43 00:02:41,880 --> 00:02:44,640 Speaker 2: Right, so why can't the government just give everybody two 44 00:02:44,760 --> 00:02:46,120 Speaker 2: hundred bucks and be done with that. 45 00:02:46,639 --> 00:02:49,520 Speaker 4: Yeah, well, that's where it's that money supply equation with inflation. 46 00:02:49,639 --> 00:02:53,560 Speaker 4: So there's two aspects to inflation, even though some people 47 00:02:53,600 --> 00:02:56,280 Speaker 4: will say, you know, the money supply is the number one, 48 00:02:56,360 --> 00:03:01,280 Speaker 4: but so is the issue of is going up globally 49 00:03:01,360 --> 00:03:02,560 Speaker 4: which we can't control. 50 00:03:03,360 --> 00:03:05,280 Speaker 3: It's going to happen, and then you can't pushes the 51 00:03:05,280 --> 00:03:05,760 Speaker 3: price up. 52 00:03:05,800 --> 00:03:08,280 Speaker 4: But then when you add money to the economy, when 53 00:03:08,320 --> 00:03:11,880 Speaker 4: you just it's that classic you know, dilemma with kids, 54 00:03:11,919 --> 00:03:13,760 Speaker 4: you know, when they say, why can't we just print money? 55 00:03:13,919 --> 00:03:16,640 Speaker 4: And then we do print money anyway. But the reason 56 00:03:16,760 --> 00:03:18,919 Speaker 4: we tell the kids why we can't is that the 57 00:03:18,919 --> 00:03:21,720 Speaker 4: more money, the more dollars there are in an economy. 58 00:03:21,800 --> 00:03:25,520 Speaker 4: If we just add dollars without adding actual wealth, then 59 00:03:25,600 --> 00:03:30,079 Speaker 4: those dollars are worth worth less. And so when a 60 00:03:30,120 --> 00:03:33,000 Speaker 4: dollar is worth less, that's effectively inflation. That's that's push 61 00:03:33,480 --> 00:03:35,840 Speaker 4: means that it takes more dollars to buy things, and 62 00:03:35,880 --> 00:03:38,800 Speaker 4: it's an inflation re spiral. And I think there is 63 00:03:38,840 --> 00:03:42,240 Speaker 4: an argument there that you know, we got into that 64 00:03:42,280 --> 00:03:46,600 Speaker 4: situation after that initial supply shop in twenty twenty two, 65 00:03:47,200 --> 00:03:50,840 Speaker 4: you know, global events push prices up, but because we 66 00:03:50,960 --> 00:03:55,480 Speaker 4: had super low interest rates and you know, subsidies going 67 00:03:55,480 --> 00:04:01,600 Speaker 4: to consumers and taxpayers, that really expanded the money supply. 68 00:04:01,640 --> 00:04:05,280 Speaker 4: The economy overheated, and we had more inflation than we 69 00:04:05,360 --> 00:04:08,560 Speaker 4: might have otherwise. And so that's the rationale we're hearing 70 00:04:08,600 --> 00:04:13,360 Speaker 4: from Finance Minister Nicola Willis, who who is just you know, 71 00:04:13,760 --> 00:04:15,880 Speaker 4: making wants to make sure that anything they do to 72 00:04:16,320 --> 00:04:20,080 Speaker 4: ease the pain here doesn't make things worse, say another 73 00:04:20,279 --> 00:04:22,760 Speaker 4: five months down the track or something. So even say, 74 00:04:22,800 --> 00:04:25,080 Speaker 4: you know, if the war was to go on for 75 00:04:26,080 --> 00:04:28,240 Speaker 4: a couple more months and that would create some real 76 00:04:28,720 --> 00:04:31,920 Speaker 4: pain points for consumers, it still could be the case 77 00:04:31,920 --> 00:04:35,839 Speaker 4: that six months down the track, we've created an inflationary 78 00:04:35,880 --> 00:04:38,080 Speaker 4: bubble that takes ages to unwind. And we saw that, 79 00:04:38,120 --> 00:04:40,800 Speaker 4: you know, the Reserve Bank has to then push up 80 00:04:40,800 --> 00:04:43,760 Speaker 4: interest rates and take money out of people's pockets to 81 00:04:43,839 --> 00:04:47,000 Speaker 4: sort of get inflation back under control. And you can 82 00:04:47,040 --> 00:04:49,960 Speaker 4: pay for that over months and years, much longer than 83 00:04:49,960 --> 00:04:52,360 Speaker 4: the initial crisis. So they're weighing all that up. It's 84 00:04:52,560 --> 00:04:54,800 Speaker 4: not an easy position to be in because there will 85 00:04:54,880 --> 00:04:58,160 Speaker 4: be a lot of consumers who are voters feeling it 86 00:04:58,200 --> 00:04:58,760 Speaker 4: in their pocket. 87 00:04:59,279 --> 00:05:02,520 Speaker 2: Yeah, she said that the advice that economists give about 88 00:05:02,520 --> 00:05:05,240 Speaker 2: these situations, if you're going to provide any support, that 89 00:05:05,279 --> 00:05:09,520 Speaker 2: it has to be temporary, timely, and targeted to those 90 00:05:09,920 --> 00:05:10,760 Speaker 2: most in need. 91 00:05:11,279 --> 00:05:14,400 Speaker 3: So what are the government's options here, Yeah. 92 00:05:14,720 --> 00:05:17,880 Speaker 4: They are limited, but you know, something like working for families, 93 00:05:17,920 --> 00:05:21,640 Speaker 4: which you know, you only get if you're up to 94 00:05:21,680 --> 00:05:25,080 Speaker 4: a threshold a certain income threshold could be adjusted and 95 00:05:25,120 --> 00:05:29,200 Speaker 4: there's tax credits there that they could adjust to basically 96 00:05:29,279 --> 00:05:31,240 Speaker 4: put a few more dollars in the pockets of the 97 00:05:31,279 --> 00:05:34,160 Speaker 4: people who probably I don't know if it's a politically 98 00:05:34,200 --> 00:05:37,000 Speaker 4: correct term still or not, but you know, the working poor, 99 00:05:37,000 --> 00:05:41,960 Speaker 4: the people who are maybe you know two people are 100 00:05:42,040 --> 00:05:45,839 Speaker 4: working in low minimum wage type jobs and have to 101 00:05:45,920 --> 00:05:48,520 Speaker 4: work full time just to sort of just to sort 102 00:05:48,560 --> 00:05:53,760 Speaker 4: of keep the household rolling. That's where a price shock 103 00:05:53,880 --> 00:05:55,599 Speaker 4: like this if they have to drive to work. And 104 00:05:55,760 --> 00:05:58,520 Speaker 4: Nicola Willis keeps using the example of a shift worker 105 00:05:58,560 --> 00:06:01,080 Speaker 4: going to the airport and you know who can't catch 106 00:06:01,080 --> 00:06:05,039 Speaker 4: the bus and has to drive, you know, throwing an 107 00:06:05,080 --> 00:06:07,560 Speaker 4: extra fifty dollars or eighty dollars a week in petrol 108 00:06:07,600 --> 00:06:11,640 Speaker 4: costs on someone like that can be quite disastrous, so 109 00:06:12,000 --> 00:06:15,000 Speaker 4: it could really see some people falling into a financial trap. 110 00:06:15,279 --> 00:06:16,760 Speaker 4: And so those are the people that you need to 111 00:06:16,760 --> 00:06:20,320 Speaker 4: look after. The higher income the smaller fuel is as 112 00:06:20,360 --> 00:06:22,680 Speaker 4: a percentage of your total income, so you can handle 113 00:06:22,720 --> 00:06:25,440 Speaker 4: a shock. I mean, you might be talking about eating 114 00:06:25,440 --> 00:06:27,640 Speaker 4: out less or something like that, and that's a different 115 00:06:27,720 --> 00:06:32,080 Speaker 4: kind of situation and one where it probably isn't worthwhile 116 00:06:32,120 --> 00:06:36,360 Speaker 4: the government subsidizing those people. I mean, it still creates 117 00:06:36,400 --> 00:06:38,800 Speaker 4: a hit to the economy when you choose not to 118 00:06:38,839 --> 00:06:40,679 Speaker 4: eat out because you've got to pay more petrol costs, 119 00:06:40,720 --> 00:06:43,640 Speaker 4: So there is still going to be flow on from that. 120 00:06:43,839 --> 00:06:46,720 Speaker 4: But I think they're talking about dealing with the really 121 00:06:46,760 --> 00:06:51,640 Speaker 4: acute pain. There was a view around COVID because the 122 00:06:51,680 --> 00:06:56,400 Speaker 4: crisis was so serious and so unprecedented that you know, 123 00:06:56,800 --> 00:07:00,880 Speaker 4: particularly for businesses, but getting money to people quickly was 124 00:07:00,920 --> 00:07:03,200 Speaker 4: seen as a really valuable thing, and I think it 125 00:07:03,240 --> 00:07:07,600 Speaker 4: was especially in the first instance for businesses. Getting support 126 00:07:07,800 --> 00:07:11,160 Speaker 4: to those businesses so they didn't just collapse was important. 127 00:07:11,160 --> 00:07:13,960 Speaker 4: So the government at that time was all about getting 128 00:07:13,960 --> 00:07:16,920 Speaker 4: the money out the door. But I think there is 129 00:07:17,080 --> 00:07:21,240 Speaker 4: a view and certainly that the reviews that we've seen 130 00:07:21,280 --> 00:07:23,840 Speaker 4: the inquiries suggest that that just went on too long. 131 00:07:23,880 --> 00:07:26,640 Speaker 4: It wasn't rained in as the economy started to heat up. 132 00:07:26,680 --> 00:07:28,320 Speaker 4: So they have to keep a very close eye on 133 00:07:28,560 --> 00:07:31,840 Speaker 4: what the real effects are in the economy because you 134 00:07:31,840 --> 00:07:34,000 Speaker 4: will have noticed there's a lot of speculation at the 135 00:07:34,000 --> 00:07:37,080 Speaker 4: moment and we don't know what the actual net outcome 136 00:07:37,120 --> 00:07:38,200 Speaker 4: will be on the economy. 137 00:07:38,360 --> 00:07:38,560 Speaker 5: Yeah. 138 00:07:38,560 --> 00:07:42,000 Speaker 2: So Willis has said that the treasury scenarios show higher 139 00:07:42,040 --> 00:07:45,560 Speaker 2: inflation than anticipated. That's where we get the three point 140 00:07:45,720 --> 00:07:49,160 Speaker 2: seven percent figure. She said that that's too high for 141 00:07:49,240 --> 00:07:52,480 Speaker 2: my liking, but points out that it's actually lower than 142 00:07:52,520 --> 00:07:56,920 Speaker 2: Australia's They're currently at three point eight percent, and while 143 00:07:56,920 --> 00:08:02,040 Speaker 2: we're entering unavoidable international cost pressure her words, we are 144 00:08:02,080 --> 00:08:05,320 Speaker 2: in a better position than other countries. Now, we are 145 00:08:05,360 --> 00:08:07,320 Speaker 2: in a better position than other countries. 146 00:08:07,520 --> 00:08:11,560 Speaker 3: But is it right to compare ourselves to Australia for instance. 147 00:08:11,920 --> 00:08:17,080 Speaker 4: Well, it's slightly different in that Australia's economy was growing 148 00:08:17,240 --> 00:08:21,320 Speaker 4: at capacity above capacity, so they were sort of already 149 00:08:21,320 --> 00:08:24,720 Speaker 4: seeing strong economic growth which had started to drive inflation. 150 00:08:26,080 --> 00:08:27,880 Speaker 4: You could say we were lucky, we were lucky we 151 00:08:27,960 --> 00:08:30,360 Speaker 4: had all these recessions because that meant our economy was 152 00:08:30,400 --> 00:08:34,560 Speaker 4: so in such terrible shape that there was less inflation 153 00:08:34,960 --> 00:08:38,640 Speaker 4: in the core of the economy, and so, you know, 154 00:08:38,640 --> 00:08:42,280 Speaker 4: economists had been expecting to see inflation come back a bit. 155 00:08:42,360 --> 00:08:44,600 Speaker 4: We may still see it in the first quarter inflation 156 00:08:44,679 --> 00:08:48,319 Speaker 4: figures because they weren't really affected so much by the 157 00:08:48,360 --> 00:08:52,400 Speaker 4: war that that core inflation in the economy is still 158 00:08:54,080 --> 00:08:58,080 Speaker 4: sort of tracking downwards at a time when we were 159 00:08:58,080 --> 00:09:00,199 Speaker 4: suddenly going to get this you know, the shop from 160 00:09:00,200 --> 00:09:05,280 Speaker 4: the external things like the petrol and food prices. But yeah, so, 161 00:09:05,440 --> 00:09:08,320 Speaker 4: I mean, you know, we're in better shape because we're 162 00:09:08,320 --> 00:09:10,080 Speaker 4: in worse shape. As there's a bit of an oxymoron, 163 00:09:10,120 --> 00:09:13,640 Speaker 4: but that's pretty much where we were in terms of inflation. 164 00:09:13,920 --> 00:09:16,000 Speaker 2: It's like Trump coming out this week and saying it's 165 00:09:16,040 --> 00:09:18,720 Speaker 2: good that oil prices are going up because Americans produce 166 00:09:18,760 --> 00:09:19,280 Speaker 2: a lot of oil. 167 00:09:19,280 --> 00:09:20,400 Speaker 3: A lot of people are getting rich. 168 00:09:20,520 --> 00:09:22,640 Speaker 4: Right, Yeah, well, I guess if you've got shares and 169 00:09:22,679 --> 00:09:24,240 Speaker 4: oil companies, it's pretty good. 170 00:09:30,920 --> 00:09:34,479 Speaker 5: If what the government does is it just spends the bazookas, 171 00:09:34,559 --> 00:09:37,280 Speaker 5: then that can add fuel to the inflation fire and 172 00:09:37,400 --> 00:09:41,720 Speaker 5: lead to broader price increases across the economy, affecting everyone 173 00:09:41,720 --> 00:09:44,360 Speaker 5: and getting into quite a dangerous spiral. But the simple 174 00:09:44,400 --> 00:09:48,560 Speaker 5: truth is that I can't stop the international oil price 175 00:09:48,600 --> 00:09:52,360 Speaker 5: going up right now. That's outside of my control and 176 00:09:52,400 --> 00:09:55,840 Speaker 5: that's not something that I can control. And I hope 177 00:09:55,840 --> 00:09:58,280 Speaker 5: that New Zealanders understand that. But it doesn't mean I'm 178 00:09:58,280 --> 00:10:00,959 Speaker 5: not acutely conscious of what's going on household budget. 179 00:10:03,040 --> 00:10:06,559 Speaker 2: Willis has said that she is not going to completely 180 00:10:06,679 --> 00:10:10,440 Speaker 2: loosen the fiscal belt. Obvious reason number one would be 181 00:10:10,480 --> 00:10:13,120 Speaker 2: the grief that this government has given the last government 182 00:10:13,320 --> 00:10:16,480 Speaker 2: during the pandemic, of course, and after the pandemic. What 183 00:10:16,520 --> 00:10:19,240 Speaker 2: would happen down the line, I suppose if they did 184 00:10:19,360 --> 00:10:21,600 Speaker 2: loosen the financial belt. 185 00:10:22,200 --> 00:10:25,840 Speaker 4: Yeah, well, anything they do to subsidize unless they cut 186 00:10:26,120 --> 00:10:29,880 Speaker 4: services from somewhere else. Their budget is already in deficit 187 00:10:30,000 --> 00:10:32,120 Speaker 4: and you know, trying to get back to a surplus 188 00:10:32,120 --> 00:10:34,560 Speaker 4: and whatever it was three or four years or something, 189 00:10:35,600 --> 00:10:39,360 Speaker 4: So you know, that would effectively mean you're borrowing to 190 00:10:39,440 --> 00:10:41,880 Speaker 4: subsidize in the short term. So you'd have to say, 191 00:10:42,240 --> 00:10:44,120 Speaker 4: the pain's got to be so bad in the short 192 00:10:44,200 --> 00:10:46,800 Speaker 4: term that we're going to load extra debt on people 193 00:10:46,880 --> 00:10:49,960 Speaker 4: in the future, and that extra debt can translate to 194 00:10:51,120 --> 00:10:55,560 Speaker 4: higher interest rates, it can you know, it's obviously means 195 00:10:55,559 --> 00:10:57,720 Speaker 4: that we have to deal with it at some point, 196 00:10:58,520 --> 00:11:01,040 Speaker 4: and that can mean having to cut versus something else. 197 00:11:01,120 --> 00:11:02,880 Speaker 4: So there's trade offs all the way through. So you've 198 00:11:02,880 --> 00:11:06,920 Speaker 4: got that immediate thing of if the government pours too 199 00:11:07,000 --> 00:11:10,440 Speaker 4: much money into the economy at a time when an 200 00:11:10,480 --> 00:11:14,480 Speaker 4: economy is near capacity, then you create more inflation. So 201 00:11:14,480 --> 00:11:16,920 Speaker 4: they have to worry about that and they have to 202 00:11:17,000 --> 00:11:20,079 Speaker 4: weigh up how bad it is. Is it really worth 203 00:11:20,480 --> 00:11:24,320 Speaker 4: borrowing more money from around the world to fund whatever 204 00:11:24,360 --> 00:11:27,680 Speaker 4: subsidies they think are required. So you know, that's another 205 00:11:27,760 --> 00:11:30,079 Speaker 4: reason to stay quite targeted and make sure that you're 206 00:11:30,120 --> 00:11:32,120 Speaker 4: getting your bang for your buck in terms of helping 207 00:11:32,160 --> 00:11:33,520 Speaker 4: the people most in need. 208 00:11:33,480 --> 00:11:36,560 Speaker 2: Because is it either borrowing a whole bunch more money 209 00:11:36,720 --> 00:11:39,440 Speaker 2: or having another look at budget twenty twenty six and 210 00:11:39,480 --> 00:11:42,440 Speaker 2: cutting thing, you know, cutting money from educational health and 211 00:11:42,600 --> 00:11:44,360 Speaker 2: either scenario, isn't it really good? 212 00:11:44,400 --> 00:11:48,439 Speaker 4: In not know, those scenarios are good. Yeah, So I mean, 213 00:11:48,440 --> 00:11:52,160 Speaker 4: I don't know, they're running pretty pretty thin. You know, 214 00:11:52,480 --> 00:11:55,120 Speaker 4: they've done a lot of cutting already, so yeah, I 215 00:11:55,160 --> 00:11:57,360 Speaker 4: don't think they'd be looking forward to that. I mean, 216 00:11:57,600 --> 00:12:01,079 Speaker 4: there is capacity to you know, in terms you know, 217 00:12:01,120 --> 00:12:02,760 Speaker 4: there's a lot of debate about how much debt New 218 00:12:02,840 --> 00:12:06,560 Speaker 4: Zealand can afford to take on, but quite you know, 219 00:12:06,840 --> 00:12:09,960 Speaker 4: literally in practical sense. In a practical sense, we can 220 00:12:10,040 --> 00:12:13,280 Speaker 4: still get we can still borrow more money. We're still 221 00:12:13,280 --> 00:12:15,760 Speaker 4: considered a good enough bet to raise more money if required. 222 00:12:16,320 --> 00:12:18,840 Speaker 4: It's just those longer term issues that flow from it. 223 00:12:19,480 --> 00:12:21,400 Speaker 2: What sort of impact do you think that this will have, 224 00:12:22,040 --> 00:12:25,240 Speaker 2: being that it is an election year as I said before, 225 00:12:25,360 --> 00:12:28,640 Speaker 2: obviously there's been a lot of factors out of their control, 226 00:12:29,080 --> 00:12:32,600 Speaker 2: and voters seem to understand that Nikola Willis herself does 227 00:12:32,640 --> 00:12:35,120 Speaker 2: not have anything to do with the international price of oil. 228 00:12:36,360 --> 00:12:37,679 Speaker 3: But is that rich. 229 00:12:37,559 --> 00:12:41,640 Speaker 2: Coming from a government who seem to blame COVID on 230 00:12:41,679 --> 00:12:43,600 Speaker 2: the last government. Yeah. 231 00:12:43,640 --> 00:12:46,200 Speaker 4: I mean, look, it's politics, isn't it, you know, And 232 00:12:46,240 --> 00:12:50,120 Speaker 4: it's much easier in opposition to you know, put all 233 00:12:50,120 --> 00:12:54,160 Speaker 4: the blame for inflation, and in fact, sometimes when you know, 234 00:12:54,240 --> 00:12:57,559 Speaker 4: the inflation comes down or various things have happened in 235 00:12:57,600 --> 00:13:00,400 Speaker 4: the economy that have been to do with the good 236 00:13:00,440 --> 00:13:02,920 Speaker 4: things happen, take the government sometimes take the credit when 237 00:13:02,920 --> 00:13:07,320 Speaker 4: it actually it's it's a global trend. Yeah, I think 238 00:13:08,320 --> 00:13:12,160 Speaker 4: a lot's going to depend on how they sell it 239 00:13:12,200 --> 00:13:15,200 Speaker 4: and the leadership you know. So you know, people kind 240 00:13:15,200 --> 00:13:18,240 Speaker 4: of understand, you know, or do should understand that this 241 00:13:18,360 --> 00:13:20,280 Speaker 4: is a global problem. But when you go to the 242 00:13:20,320 --> 00:13:23,120 Speaker 4: supermarket and you're paying more when you go to the 243 00:13:23,120 --> 00:13:27,760 Speaker 4: petrol pump, inflation really does make voters grumpy. 244 00:13:27,880 --> 00:13:28,040 Speaker 5: You know. 245 00:13:28,040 --> 00:13:30,880 Speaker 4: We've seen it in elections all over the world. The 246 00:13:30,920 --> 00:13:33,160 Speaker 4: cost of living crisis is one of the probably the 247 00:13:33,240 --> 00:13:37,240 Speaker 4: number one issue for most voters, and that seems to 248 00:13:37,320 --> 00:13:40,760 Speaker 4: rub off on governments even if you you know, sort 249 00:13:40,760 --> 00:13:42,960 Speaker 4: of at the back of your mind still understand that 250 00:13:43,000 --> 00:13:45,319 Speaker 4: it's not really their fault. Well, they're going to they're 251 00:13:45,360 --> 00:13:47,240 Speaker 4: going to cop it, so that that puts the onus 252 00:13:47,280 --> 00:13:50,280 Speaker 4: on I guess the Prime Minister and the Finance Minister 253 00:13:50,840 --> 00:13:54,480 Speaker 4: and the rest of that coalition to really do a good, 254 00:13:55,559 --> 00:13:58,480 Speaker 4: you know job of explaining and showing some leadership through 255 00:13:58,720 --> 00:14:02,319 Speaker 4: what you know is looking like, if not a crisis, 256 00:14:02,760 --> 00:14:06,640 Speaker 4: a very serious and worrying situation for the coming weeks 257 00:14:06,640 --> 00:14:08,960 Speaker 4: and months as we head into the election campaign. 258 00:14:15,120 --> 00:14:17,040 Speaker 1: So we will be looking at it through the lens 259 00:14:17,040 --> 00:14:19,520 Speaker 1: of any If we were to do it, it would be 260 00:14:19,600 --> 00:14:22,480 Speaker 1: timely or be targeted, and it would be you know, 261 00:14:22,720 --> 00:14:25,080 Speaker 1: for a set period of time, you know, you can 262 00:14:25,120 --> 00:14:27,400 Speaker 1: do things that are lots of short term gain, but 263 00:14:27,440 --> 00:14:29,400 Speaker 1: perhaps lots of long term paign. And that's really the 264 00:14:29,440 --> 00:14:32,040 Speaker 1: lesson out of the COVID spending, where half of the 265 00:14:32,080 --> 00:14:35,160 Speaker 1: sixty billion dollars didn't go anywhere near COVID and didn't 266 00:14:35,200 --> 00:14:37,480 Speaker 1: really lead to any better schools, hospitals or roads across 267 00:14:37,520 --> 00:14:39,880 Speaker 1: the country at all. And so you know, we just 268 00:14:39,920 --> 00:14:41,520 Speaker 1: want to make sure that we'll work our way through 269 00:14:41,560 --> 00:14:44,400 Speaker 1: that very systematically, and I think very coolly, very calmly, 270 00:14:44,520 --> 00:14:47,040 Speaker 1: very responsibly. As we've been doing. 271 00:14:49,480 --> 00:14:53,160 Speaker 2: Well speaking of voters being grumpy, especially at the supermarket, 272 00:14:53,160 --> 00:14:56,680 Speaker 2: we've got food prices increased four point five percent in 273 00:14:56,720 --> 00:14:58,359 Speaker 2: the last twelve months. 274 00:14:58,640 --> 00:15:02,000 Speaker 4: Yeah, is that good? It's not been great going in So, 275 00:15:03,040 --> 00:15:05,640 Speaker 4: you know, on one hand, the economy has been improving 276 00:15:05,640 --> 00:15:07,720 Speaker 4: and we're getting all this data for you know, up 277 00:15:07,800 --> 00:15:11,360 Speaker 4: up until the time the war started, and it's mostly 278 00:15:11,360 --> 00:15:15,800 Speaker 4: showing that the economy kept improving up to that point. 279 00:15:16,080 --> 00:15:19,920 Speaker 4: But inflation actually was still pretty strong, and you know, 280 00:15:20,200 --> 00:15:23,440 Speaker 4: and it's inflation in areas that people feel most acutely, 281 00:15:24,440 --> 00:15:28,920 Speaker 4: being food prices really at the grocery store. Over the 282 00:15:29,000 --> 00:15:31,440 Speaker 4: last year, petrol prices had actually come down and we're 283 00:15:31,480 --> 00:15:34,240 Speaker 4: down about six percent. So we went into this shock 284 00:15:35,000 --> 00:15:39,240 Speaker 4: actually in a pretty good place with petrol prices and 285 00:15:39,240 --> 00:15:41,560 Speaker 4: global oil prices, so perhaps it's not as bad as 286 00:15:41,600 --> 00:15:44,040 Speaker 4: it could have been. But you know, you're seeing it 287 00:15:44,080 --> 00:15:47,480 Speaker 4: with things like that we export and do really well 288 00:15:47,520 --> 00:15:50,680 Speaker 4: from in a sort of a net equation. It's great 289 00:15:50,720 --> 00:15:53,880 Speaker 4: that beef prices are really high because that's more money 290 00:15:53,880 --> 00:15:55,280 Speaker 4: coming into New Zealand. 291 00:15:55,120 --> 00:15:57,600 Speaker 2: But I also don't like paying I mean, what is it, 292 00:15:57,680 --> 00:16:02,119 Speaker 2: beef mints is up twenty three three point two percent annually. 293 00:16:02,360 --> 00:16:04,880 Speaker 2: I thought beef mint this was the cheap one that 294 00:16:04,960 --> 00:16:06,360 Speaker 2: you could get and put on time. 295 00:16:06,440 --> 00:16:08,600 Speaker 4: I think you just be happy for the farmers with money. 296 00:16:10,360 --> 00:16:13,440 Speaker 4: That's that's the difficult sales job, right, because it feels like, well, 297 00:16:13,480 --> 00:16:15,720 Speaker 4: hang on, so the rural communities are doing really well, 298 00:16:15,720 --> 00:16:20,120 Speaker 4: but in the city's people are but a yeah, yeah, 299 00:16:20,160 --> 00:16:23,640 Speaker 4: that is that is tough. Beef prices a tough one 300 00:16:23,680 --> 00:16:28,760 Speaker 4: and unfortunately for the government. But Ageddon, which I remember 301 00:16:28,800 --> 00:16:32,200 Speaker 4: from about eighteen months ago or whatever, I think what 302 00:16:32,280 --> 00:16:35,640 Speaker 4: we've seen on global dairy markets has been really good 303 00:16:35,640 --> 00:16:38,640 Speaker 4: for Fonterra and the dairy farmers at easy to sort 304 00:16:38,640 --> 00:16:42,960 Speaker 4: of a lowish sort of level about four or five 305 00:16:43,000 --> 00:16:46,640 Speaker 4: months ago, and prices have shot up since then. So 306 00:16:46,680 --> 00:16:48,720 Speaker 4: we're going to see that flow through in the next 307 00:16:48,720 --> 00:16:52,880 Speaker 4: few months, and probably sometime around May or June, we're 308 00:16:52,880 --> 00:16:55,720 Speaker 4: going to see those consumer prices for butter and cheese 309 00:16:55,760 --> 00:16:59,240 Speaker 4: back at levels that make people very unhappy. And that's 310 00:16:59,240 --> 00:17:03,160 Speaker 4: a real a cultural hot spot and an issue for 311 00:17:03,240 --> 00:17:07,080 Speaker 4: the government too, even though yeah, it's it's the net equation, 312 00:17:07,240 --> 00:17:11,880 Speaker 4: more money coming into the country, probably keeping the economy afloat, 313 00:17:12,040 --> 00:17:14,840 Speaker 4: but you know, you've got to sell that to voters 314 00:17:14,840 --> 00:17:17,560 Speaker 4: who might not be feeling it when they're actually picking 315 00:17:17,640 --> 00:17:20,600 Speaker 4: up their their cag of cheese every week if they 316 00:17:20,640 --> 00:17:21,439 Speaker 4: can still afford that. 317 00:17:21,800 --> 00:17:24,240 Speaker 3: Yeah, I quite like butter get in. Is that something 318 00:17:24,240 --> 00:17:26,760 Speaker 3: that we're I think, I think, I think that's what 319 00:17:26,840 --> 00:17:27,119 Speaker 3: I'm going to. 320 00:17:27,760 --> 00:17:30,000 Speaker 4: That's where we wind about eighteen months or two years 321 00:17:30,000 --> 00:17:33,439 Speaker 4: ago at the last big, big price spike, and you know, 322 00:17:34,280 --> 00:17:37,280 Speaker 4: everything's different. But commodity markets have this sort of flow through, 323 00:17:37,320 --> 00:17:39,960 Speaker 4: and so petrol prices are a lot quicker. It takes 324 00:17:40,000 --> 00:17:43,800 Speaker 4: longer for the retail price of butter and cheese to 325 00:17:44,040 --> 00:17:47,639 Speaker 4: flow through from the commodity price spikes, we've seen petrol 326 00:17:47,640 --> 00:17:50,920 Speaker 4: prices move pretty quickly, actually because. 327 00:17:50,920 --> 00:17:53,560 Speaker 3: Real quickly, but they paint advance though, right. 328 00:17:53,480 --> 00:17:57,680 Speaker 4: Yeah, they're looking forward, so there's there's a futures market involved. 329 00:17:58,320 --> 00:17:58,520 Speaker 5: You know. 330 00:17:58,560 --> 00:18:00,640 Speaker 4: In some ways I find that heart as well, though, 331 00:18:00,680 --> 00:18:04,239 Speaker 4: because you know, we've seen warnings of you know, people say, oh, 332 00:18:05,880 --> 00:18:08,320 Speaker 4: could petrol go to four dollars a liter, Well maybe 333 00:18:08,320 --> 00:18:10,720 Speaker 4: if it went to two hundred dollars a barrel. Right 334 00:18:10,760 --> 00:18:12,760 Speaker 4: now it's sitting at at one hundred dollars a barrel. 335 00:18:13,640 --> 00:18:16,760 Speaker 4: The people who trade oil can see that the Strait 336 00:18:16,760 --> 00:18:19,400 Speaker 4: of Hormoz has closed, they can see that the war 337 00:18:19,960 --> 00:18:23,159 Speaker 4: doesn't have a defined ending on it, so they can 338 00:18:23,200 --> 00:18:24,960 Speaker 4: see a lot of the risk there already, and they're 339 00:18:25,000 --> 00:18:28,240 Speaker 4: trading into the future. That's not two hundred. It's not 340 00:18:28,280 --> 00:18:30,920 Speaker 4: spiking up in a panic at the moment, and I 341 00:18:30,960 --> 00:18:34,720 Speaker 4: think it would take something pretty disastrous to put it 342 00:18:34,840 --> 00:18:37,239 Speaker 4: up to those levels. So yeah, look that you might 343 00:18:37,280 --> 00:18:39,440 Speaker 4: see the petrol price go a bit more because it 344 00:18:39,560 --> 00:18:43,840 Speaker 4: hasn't necessarily all flowed through the increases we've seen on 345 00:18:43,920 --> 00:18:46,320 Speaker 4: the commodity markets. It takes a little while. There'll be 346 00:18:46,400 --> 00:18:50,040 Speaker 4: some movements around the dollar. People in a war situation, 347 00:18:50,240 --> 00:18:55,240 Speaker 4: a international crisis situation, the US dollar becomes a safe 348 00:18:55,320 --> 00:18:57,239 Speaker 4: haven and that tends to go up, which means our 349 00:18:57,440 --> 00:19:00,240 Speaker 4: Kiwi dollar comes down, and that adds to the cost 350 00:19:00,320 --> 00:19:03,800 Speaker 4: of imported goods for US. So those things could happen. 351 00:19:03,880 --> 00:19:07,360 Speaker 4: But look, I would be you know, touch would I'm 352 00:19:07,440 --> 00:19:09,920 Speaker 4: hopeful that we sort of see some stability around this 353 00:19:10,080 --> 00:19:12,720 Speaker 4: hundred one hundred and a bit sort of barrel price, 354 00:19:13,680 --> 00:19:16,240 Speaker 4: which means that petrol shouldn't go up too much more 355 00:19:16,320 --> 00:19:20,680 Speaker 4: before we hit a plateau. And hopefully, you know, that's 356 00:19:20,720 --> 00:19:25,040 Speaker 4: when markets and you know, consumers and things we find 357 00:19:25,080 --> 00:19:29,720 Speaker 4: ways around. Longer term, you know, markets would would would 358 00:19:29,720 --> 00:19:31,720 Speaker 4: find a solution for this. It's not like COVID, where 359 00:19:31,800 --> 00:19:33,960 Speaker 4: something is sort of we're not in the war, so 360 00:19:35,680 --> 00:19:39,720 Speaker 4: it's not something you know, where we're at risk of dying. Here. 361 00:19:40,680 --> 00:19:43,080 Speaker 4: It's a product. There's actually enough of it in the world. 362 00:19:43,400 --> 00:19:47,440 Speaker 4: The problem is moving it around the world, and you 363 00:19:47,520 --> 00:19:50,639 Speaker 4: know that would be resolved in the long term and 364 00:19:50,720 --> 00:19:53,520 Speaker 4: the short term. We've got enough petrol in the country. 365 00:19:54,040 --> 00:19:57,359 Speaker 4: I see a potential issue in the medium term if 366 00:19:58,520 --> 00:20:01,480 Speaker 4: you know, supplies start to run in three or four 367 00:20:01,560 --> 00:20:03,800 Speaker 4: weeks and that's where the government has to look to 368 00:20:03,920 --> 00:20:08,080 Speaker 4: possibly you know, taking some action around you know, worst 369 00:20:08,160 --> 00:20:11,399 Speaker 4: case would be, you know, looking at some sort of 370 00:20:11,480 --> 00:20:14,680 Speaker 4: rationing where you have to ensure that your essential services 371 00:20:14,760 --> 00:20:17,359 Speaker 4: get first, go at the petrol and that sort of thing. 372 00:20:17,720 --> 00:20:21,000 Speaker 4: Carlos Days, well, people have talked about Carlus. 373 00:20:20,720 --> 00:20:23,240 Speaker 3: Stays basically didn't work. 374 00:20:23,359 --> 00:20:26,639 Speaker 4: Terrible solution exactly, and I would think that there'd be 375 00:20:26,760 --> 00:20:29,720 Speaker 4: there'd be plenty of things that do before then. You know, 376 00:20:29,840 --> 00:20:32,160 Speaker 4: we know from COVID that we can work from home 377 00:20:32,240 --> 00:20:36,399 Speaker 4: and the economy doesn't collapse, So you know, encouraging non 378 00:20:36,520 --> 00:20:41,360 Speaker 4: essential workers to work from home, subsidies for public transport, 379 00:20:41,440 --> 00:20:44,840 Speaker 4: that sort of thing might be a lot more effective. 380 00:20:44,960 --> 00:20:47,080 Speaker 4: There was a lot of work to organize Carlos Days, 381 00:20:47,359 --> 00:20:49,080 Speaker 4: get your sticker and all that sort of stuff for 382 00:20:49,280 --> 00:20:50,000 Speaker 4: not much gain. 383 00:20:51,000 --> 00:20:56,600 Speaker 3: Thanks for joining us, LAMB cheers, Chelsea. That's it for 384 00:20:56,720 --> 00:20:58,639 Speaker 3: this episode of the Front Page. 385 00:20:59,160 --> 00:21:02,440 Speaker 2: You can read more about today's stories and extensive news 386 00:21:02,560 --> 00:21:06,560 Speaker 2: coverage at enziherld dot co dot enz. The Front Page 387 00:21:06,640 --> 00:21:10,439 Speaker 2: is hosted and produced by me Chelsea Daniels Kine. Dickie 388 00:21:10,640 --> 00:21:14,560 Speaker 2: is our studio operator, Richard Martin, our producer and editor. 389 00:21:14,840 --> 00:21:16,640 Speaker 3: And our executive producer. 390 00:21:16,400 --> 00:21:17,159 Speaker 5: Is Jane Ye. 391 00:21:17,880 --> 00:21:20,840 Speaker 2: Follow the front page on the iheartapp or wherever you 392 00:21:20,920 --> 00:21:24,320 Speaker 2: get your podcasts, and join us next time for another 393 00:21:24,400 --> 00:21:26,240 Speaker 2: look beyond the headlines.