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Speaker 1: Now we're getting a bit of a better idea about

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Speaker 1: how Nikola Willis is going to fund her budget. Later

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Speaker 1: this month, we learned that the government today will save

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Speaker 1: one billion dollars over four years because it's hitting its

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Speaker 1: housing target early, and then potentially more than ten billion

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Speaker 1: dollars over four years will be saved from this pay

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Speaker 1: equity system overhaul. Brad Olson's informetric sen Principal economists, Hey,

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Speaker 1: Brad Good, evening, what do you make of these two savings?

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Speaker 1: I mean, they're reasonably big, aren't they very big?

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Speaker 2: I feel like it's we're back to the future a

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Speaker 2: little bit when you know we're starting to talk in

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Speaker 2: billions of dollars again for just two line items. But

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Speaker 2: again you know that they are quite substantial, and I

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Speaker 2: think also particularly when you look at the likes of

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Speaker 2: the pay equity claims. The Minister's Cabinet paper highlights that

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Speaker 2: already the settlements are costing government one point five to

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Speaker 2: five billion dollars per year with a number of claims

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Speaker 2: still in the system. That of course was going to

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Speaker 2: go up and so there is now quite a change.

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Speaker 2: The Prime Minister has profiled billions of dollars of savings

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Speaker 2: although it's not abundantly clear right. The second how big

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Speaker 2: that number is the fact that we've got sort of

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Speaker 2: such big savings. I think also goes into what we

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Speaker 2: heard from the Finance Minister last week when the operating

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Speaker 2: allowance was cut back, and that that operating allowance is

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Speaker 2: a net figure. It's the total additional funding that the

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Speaker 2: government can spend. It's not only just sort of a

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Speaker 2: straight up edition though. It's a net figure. And so

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Speaker 2: with the government now finding a number of additional savings

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Speaker 2: across a few areas, across housing, now across pay equity,

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Speaker 2: that does free up more funding for the government to

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Speaker 2: do other things overall.

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Speaker 1: Yeah, I mean, if we're talking about more than ten

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Speaker 1: billion dollars in one line item over four years, and

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Speaker 1: a billion dollars and another line item, that makes that

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Speaker 1: one point three billion dollars in the operating allowance suddenly

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Speaker 1: make a little bit more sense, doesn't it.

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Speaker 2: It certainly gives the government more options going forward. I mean,

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Speaker 2: for the likes of the pay equity settlements. Again, I

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Speaker 2: don't think they would have necessarily have been booked to

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Speaker 2: have started all of them immediately at once, but obviously

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Speaker 2: with some of the numbers that are being thrown about

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Speaker 2: and without any real detail there that the cabinet paper

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Speaker 2: is not surprisingly silent on the dollar figures. Those have

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Speaker 2: been fairly well reducted as budget sensitive, but again they

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Speaker 2: do there are big changes that will happen over time,

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Speaker 2: and given that the government does have very limited funding

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Speaker 2: room and has a lot of stuff that they want

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Speaker 2: to be able to spend on, this does look like

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Speaker 2: it is all part of trying to make the numbers

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Speaker 2: work and what is a difficult set of circumstances. The

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Speaker 2: economic figures have been more challenging. Treasury is likely to

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Speaker 2: downgrade economic expectations going forward. That means less revenue for

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Speaker 2: the government and so that does require money to come

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Speaker 2: from somewhere else to allow all of the big expectations

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Speaker 2: to still be funded.

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Speaker 1: Yes, now, what about the employment stats they're out tomorrow.

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Speaker 1: What are you expecting.

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Speaker 2: We do expect the unemployment will be increasing further. I

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Speaker 2: think the broadn census is around sort of five point

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Speaker 2: three percent. That is the highest and nearly a decade

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Speaker 2: and obviously I think highlights what everyone's seeing out there

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Speaker 2: that times are still quite tough. People are struggling to

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Speaker 2: find jobs and We saw that with some of the

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Speaker 2: filled jobs data out over the last week as well.

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Speaker 2: Even those increases to the unemployment rate and similar they

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Speaker 2: make government's life harder as well. From a financial perspective,

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Speaker 2: the number of people on jobs, he can benefits and

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Speaker 2: similar continues to increase, and so all of those are

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Speaker 2: further cost that the government has to pay for. So

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Speaker 2: we are in a very difficult time in the economy.

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Speaker 2: Were of course being hit with the uncertainty from the tariffs.

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Speaker 2: We're starting to see some other areas of the economy

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Speaker 2: still show some promise the primary sector and similar. Mortgage

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Speaker 2: rates are falling for a number of households, but there's

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Speaker 2: still a level of concern I think amongst households because

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Speaker 2: the jobs market is not quite as easy and you

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Speaker 2: see that with consumer confidence. Despite the fact that interest

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Speaker 2: rates are coming down in cost of living challenges should

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Speaker 2: be easier for households, the numbers still suggest that households

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Speaker 2: are still pretty reluctant to be too optimistic. So a

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Speaker 2: lot of challenges out there. The governments facing fiscal challenges,

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Speaker 2: households are still facing financial challenges, difficult, challenging conditions all round.

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Speaker 1: Yeah, Brad, thanks very much really appreciated Brad Olson, principal

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Speaker 1: economist at Infometrics. For more from Heather Duplessy Allen Drive,

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Speaker 1: listen live to News Talks at B from four pm weekdays,

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Speaker 1: or follow the podcast on iHeartRadio