1 00:00:00,040 --> 00:00:02,120 Speaker 1: So budget twenty five the government, it turned out, did 2 00:00:02,240 --> 00:00:04,000 Speaker 1: have a lot of money, and that came from savings, 3 00:00:04,000 --> 00:00:05,960 Speaker 1: half of them from the pay equity adjustments, the rest 4 00:00:06,000 --> 00:00:07,720 Speaker 1: from adjustments to key we save a best start and 5 00:00:07,760 --> 00:00:11,200 Speaker 1: benefit cuts informetrics principle. Economist Brad Olson's back with this, Bradley, 6 00:00:11,240 --> 00:00:12,040 Speaker 1: good morning. 7 00:00:12,680 --> 00:00:13,240 Speaker 2: Good morning. 8 00:00:13,320 --> 00:00:16,439 Speaker 1: Do tell me this means testing thing that they're doing 9 00:00:16,440 --> 00:00:18,960 Speaker 1: in various ways, shapes and sizes. Whenever I've asked a 10 00:00:19,000 --> 00:00:21,960 Speaker 1: government previously why they don't do it for doctors and 11 00:00:22,079 --> 00:00:25,440 Speaker 1: kids and stuff like that, they've always said it's too hard. 12 00:00:25,600 --> 00:00:27,600 Speaker 1: Is it suddenly not too hard and we can mean 13 00:00:27,640 --> 00:00:28,280 Speaker 1: to test people? 14 00:00:29,640 --> 00:00:31,760 Speaker 2: Well, I think it's probably an element of that where 15 00:00:31,800 --> 00:00:35,559 Speaker 2: it now becomes politically expedient enough to do it. I mean, 16 00:00:35,600 --> 00:00:37,120 Speaker 2: you look at the likes of the changes to the 17 00:00:37,159 --> 00:00:40,680 Speaker 2: eighteen to nineteen year olds. If you can means test 18 00:00:40,720 --> 00:00:43,640 Speaker 2: that age group when they go to university, when they 19 00:00:43,760 --> 00:00:45,920 Speaker 2: try and get a student allowance and similar it shouldn't 20 00:00:45,920 --> 00:00:48,320 Speaker 2: be too much harder to do it for the unemployment benefit. 21 00:00:48,440 --> 00:00:51,599 Speaker 2: So there's part there was interesting though, looking through some 22 00:00:51,680 --> 00:00:54,440 Speaker 2: of the budget documents that the government is also expecting 23 00:00:54,520 --> 00:00:59,120 Speaker 2: further savings over time from having better data thinking between 24 00:00:59,160 --> 00:01:02,560 Speaker 2: the likes of MSD an IID to effectively do that 25 00:01:02,600 --> 00:01:04,920 Speaker 2: means testing much more efficiently. So I do think that 26 00:01:05,000 --> 00:01:07,240 Speaker 2: over time, as the government is getting better and better 27 00:01:07,240 --> 00:01:09,560 Speaker 2: with its data, it's able to better and better do 28 00:01:09,959 --> 00:01:12,600 Speaker 2: that means testing without all of these big inefficiencies that 29 00:01:12,680 --> 00:01:14,959 Speaker 2: might have previously been there. So a little bit of 30 00:01:14,959 --> 00:01:17,440 Speaker 2: an advancement over time, a little bit of a political 31 00:01:17,440 --> 00:01:18,240 Speaker 2: shift as well. 32 00:01:18,319 --> 00:01:21,479 Speaker 1: I think the deficit surplus by twenty nine and how 33 00:01:21,560 --> 00:01:24,440 Speaker 1: you measure it, which way do you favor measuring? And 34 00:01:24,560 --> 00:01:26,520 Speaker 1: are the government cooking the books? 35 00:01:27,600 --> 00:01:29,759 Speaker 2: No, they're not cooking the books, So you can definitely 36 00:01:29,760 --> 00:01:32,400 Speaker 2: come up with the various measures regardless of how you 37 00:01:32,440 --> 00:01:35,080 Speaker 2: do it. The government is on track for a surplus. 38 00:01:35,200 --> 00:01:37,120 Speaker 2: It's going to be pretty touch and go. And I 39 00:01:37,160 --> 00:01:39,720 Speaker 2: think that highlights the fist realities right that we are 40 00:01:40,040 --> 00:01:42,839 Speaker 2: still for a while going to be living beyond our means. 41 00:01:42,880 --> 00:01:46,199 Speaker 2: The government is still seeing expenses that are above thirty 42 00:01:46,240 --> 00:01:49,160 Speaker 2: one percent of GDP all the way out until twenty 43 00:01:49,160 --> 00:01:51,760 Speaker 2: twenty nine. So look at it on the overgal measure, 44 00:01:51,840 --> 00:01:54,440 Speaker 2: look at it on the overgal mix x measure. They're 45 00:01:54,440 --> 00:01:57,240 Speaker 2: all trending towards the same point, But I think it 46 00:01:57,280 --> 00:01:59,840 Speaker 2: does highlight the look for the government. This is now 47 00:02:00,320 --> 00:02:02,200 Speaker 2: you know, I think probably the third, maybe fourth year 48 00:02:02,200 --> 00:02:04,560 Speaker 2: in a row, that that budget gets a whole lot 49 00:02:04,640 --> 00:02:07,680 Speaker 2: harder to return to surplus. So long story short, for 50 00:02:07,760 --> 00:02:10,280 Speaker 2: every budget into the future, for the next couple they 51 00:02:10,280 --> 00:02:12,359 Speaker 2: will do the exact same thing. It will probably get 52 00:02:12,400 --> 00:02:14,959 Speaker 2: harder to achieve that target. Something will have to give 53 00:02:15,000 --> 00:02:17,560 Speaker 2: and that means probably less spending or something else coming 54 00:02:17,600 --> 00:02:18,160 Speaker 2: along the way. 55 00:02:18,440 --> 00:02:21,520 Speaker 1: The debt to GDP Does that worry you? 56 00:02:23,680 --> 00:02:26,320 Speaker 2: I think it's concerning to see it remaining so high 57 00:02:26,360 --> 00:02:29,360 Speaker 2: for so long. I can understand that it's difficult to 58 00:02:29,400 --> 00:02:33,000 Speaker 2: get that down without making some incredibly much deeper cuts 59 00:02:33,040 --> 00:02:36,000 Speaker 2: than we've already seen. And this is you know, a 60 00:02:36,040 --> 00:02:38,600 Speaker 2: debate that's been playing out, I think this week between 61 00:02:38,639 --> 00:02:41,880 Speaker 2: the government and the opposition around debt levels. If something 62 00:02:41,960 --> 00:02:44,600 Speaker 2: hits tomorrow, if you have the Alpine fault that goes, 63 00:02:44,600 --> 00:02:47,440 Speaker 2: if you have another major weather event and similar that's 64 00:02:47,480 --> 00:02:49,840 Speaker 2: where the debt room is important because it helps us 65 00:02:49,919 --> 00:02:53,880 Speaker 2: get through. Treasury recently estimated that after a big economic 66 00:02:53,919 --> 00:02:57,080 Speaker 2: shop we spend something like ten percent of GDP on 67 00:02:57,200 --> 00:02:59,760 Speaker 2: that recovery. We've got to have that buff ahead room. 68 00:03:00,120 --> 00:03:02,400 Speaker 2: As much as it is important that we invest in 69 00:03:02,440 --> 00:03:05,720 Speaker 2: the future and let's get that right particular infrastructure, we've 70 00:03:05,720 --> 00:03:07,040 Speaker 2: got to have a bit of buffer too. 71 00:03:07,240 --> 00:03:09,720 Speaker 1: Okay, bradon good insight, appreciate it as always. Brand of 72 00:03:09,720 --> 00:03:13,160 Speaker 1: Wilson Infometric principal economists with us for more from the 73 00:03:13,240 --> 00:03:16,239 Speaker 1: Mic Asking Breakfast, Listen live to news talks that'd be 74 00:03:16,400 --> 00:03:20,120 Speaker 1: from six am weekdays, or follow the podcast on iHeartRadio.