1 00:00:00,040 --> 00:00:03,480 Speaker 1: The New Zealand economy has officially turned a corner. GDP 2 00:00:03,680 --> 00:00:07,480 Speaker 1: rows zero point seven percent in the December quarter, finally 3 00:00:07,480 --> 00:00:10,799 Speaker 1: putting an end to the recession. The rebound was stronger 4 00:00:10,800 --> 00:00:14,960 Speaker 1: than an economists had predicted, driven by tourism and primary industries. 5 00:00:15,040 --> 00:00:16,960 Speaker 1: Construction well that took a bit of a hit is 6 00:00:17,000 --> 00:00:19,959 Speaker 1: down more than three percent, and Nikola Willis is the 7 00:00:20,000 --> 00:00:24,880 Speaker 1: Finance Minister. Good afternoon, good afternoon. You'll be loving this news, 8 00:00:24,880 --> 00:00:26,640 Speaker 1: won't you, I am. 9 00:00:26,880 --> 00:00:29,080 Speaker 2: It tells us that we are turning the corner, which 10 00:00:29,120 --> 00:00:31,639 Speaker 2: is what New Zealanders need after a very tough time 11 00:00:31,680 --> 00:00:35,120 Speaker 2: with high inflation, high interest rates, and growth bouncing along 12 00:00:35,159 --> 00:00:38,760 Speaker 2: the bottom. The numbers today are better than was forecast 13 00:00:38,800 --> 00:00:41,920 Speaker 2: and tell us that recovery is underway. We need that 14 00:00:41,960 --> 00:00:44,440 Speaker 2: to be sustained because the New Zealanders will start feeling 15 00:00:44,479 --> 00:00:47,640 Speaker 2: it in their household budgets and in their communities. But 16 00:00:47,680 --> 00:00:49,160 Speaker 2: this tells us we're on our way. 17 00:00:49,560 --> 00:00:52,159 Speaker 1: So compared to December twenty twenty three, the economy is 18 00:00:52,200 --> 00:00:54,800 Speaker 1: still one point one percent smaller. We've still got a 19 00:00:54,840 --> 00:00:57,000 Speaker 1: long journey ahead of us, don't we. 20 00:00:57,000 --> 00:00:59,440 Speaker 2: We do. There's no getting away from the fact that 21 00:00:59,480 --> 00:01:03,560 Speaker 2: New Zealand is hammered following COVID. The huge amount of 22 00:01:03,960 --> 00:01:07,160 Speaker 2: spending that was done during that time resulted in a 23 00:01:07,360 --> 00:01:11,160 Speaker 2: very high inflation spike, rapidly rising interest rates, and that 24 00:01:11,200 --> 00:01:13,800 Speaker 2: put a real clamp on our economy and it's taking 25 00:01:14,200 --> 00:01:16,920 Speaker 2: time to dig ourselves out of it. But we are 26 00:01:17,040 --> 00:01:19,759 Speaker 2: on our way now and the government's focus is how 27 00:01:19,800 --> 00:01:22,400 Speaker 2: we accelerate that growth because we know that when we 28 00:01:22,480 --> 00:01:25,160 Speaker 2: do that will lead to higher incomes, that will lead 29 00:01:25,160 --> 00:01:28,040 Speaker 2: to a more affordable cost of living for New Zealanders, 30 00:01:28,280 --> 00:01:30,120 Speaker 2: and that's our focus. We're going for growth. 31 00:01:30,440 --> 00:01:32,640 Speaker 1: So because we saw the dip and consumer confidence in 32 00:01:32,680 --> 00:01:35,360 Speaker 1: the later survey yesterday, how long does it take for 33 00:01:35,400 --> 00:01:37,920 Speaker 1: these figures to actually turn into us feeling good about 34 00:01:37,920 --> 00:01:38,520 Speaker 1: where we're going. 35 00:01:39,640 --> 00:01:42,600 Speaker 2: We do need to see a sustained period of growth 36 00:01:42,640 --> 00:01:47,240 Speaker 2: because unfortunately, the last thing to recover is always employment, 37 00:01:47,720 --> 00:01:52,160 Speaker 2: and so forecasters are expecting that unemployment will continue to 38 00:01:52,240 --> 00:01:54,040 Speaker 2: rise over the next few months, and of course that 39 00:01:54,080 --> 00:01:57,360 Speaker 2: has a real impact on people's confidence. What we do 40 00:01:57,520 --> 00:02:01,120 Speaker 2: know is that unemployment is set to stay below where 41 00:02:01,160 --> 00:02:04,120 Speaker 2: it's been historically, below the historic average, so it's not 42 00:02:04,160 --> 00:02:06,280 Speaker 2: going to be as bad as it has been during 43 00:02:06,360 --> 00:02:10,240 Speaker 2: previous downturns. But look, my enthusiasm is to see us 44 00:02:10,280 --> 00:02:12,840 Speaker 2: get through this as quickly as possible. What we are 45 00:02:12,880 --> 00:02:15,200 Speaker 2: seeing is that many businesses are more confident about the 46 00:02:15,200 --> 00:02:18,560 Speaker 2: future now. They're seeing those high dairy prices, those more 47 00:02:18,600 --> 00:02:22,760 Speaker 2: tourism numbers flowing through into money being spent in their communities. 48 00:02:22,960 --> 00:02:25,920 Speaker 2: They're seeing that people who are refixing on lower mortgages 49 00:02:26,160 --> 00:02:28,920 Speaker 2: more able to spend at their local shops, and so 50 00:02:28,960 --> 00:02:32,840 Speaker 2: that recovery is underway and New Zealanders will start feeling 51 00:02:32,880 --> 00:02:35,720 Speaker 2: it as businesses are better able to pay high wages 52 00:02:35,880 --> 00:02:38,080 Speaker 2: when they're selling more when they're more profitable. 53 00:02:38,160 --> 00:02:40,880 Speaker 1: Of course, these numbers are also better than the Reserve 54 00:02:40,960 --> 00:02:43,400 Speaker 1: Bank had anticipated. Do you think that might mean that 55 00:02:43,440 --> 00:02:46,760 Speaker 1: we can be optimistic about further drops and interest rates. 56 00:02:47,320 --> 00:02:50,600 Speaker 2: Well, this is obviously a better result than the Reserve 57 00:02:50,680 --> 00:02:53,799 Speaker 2: Bank was expecting. But they'll be weighing up a number 58 00:02:53,800 --> 00:02:56,720 Speaker 2: of factors. They'll be looking at the international context, they'll 59 00:02:56,760 --> 00:02:59,160 Speaker 2: be looking at a lot of different data as they 60 00:02:59,200 --> 00:03:02,480 Speaker 2: make their cash rate decisions. We know that they've been 61 00:03:02,520 --> 00:03:06,240 Speaker 2: forecasting additional interest rate drops this year, and I know 62 00:03:06,360 --> 00:03:07,920 Speaker 2: many Kiwis will welcome that. 63 00:03:09,200 --> 00:03:12,440 Speaker 1: When we look at the whole global outlook. There is 64 00:03:12,440 --> 00:03:15,160 Speaker 1: a fair bit of uncertainty about that. How realistic do 65 00:03:15,200 --> 00:03:17,919 Speaker 1: we need to be about optimism? 66 00:03:19,200 --> 00:03:22,240 Speaker 2: Yeah, look, there is uncertainty about that, and that impacts 67 00:03:22,240 --> 00:03:24,680 Speaker 2: New Zealand in a couple of ways. It means that 68 00:03:24,720 --> 00:03:27,560 Speaker 2: the costs of paying the interest bill on our debt 69 00:03:27,600 --> 00:03:30,520 Speaker 2: are going to be high, which affects our books. It 70 00:03:30,639 --> 00:03:34,280 Speaker 2: means that some businesses might look out the global context 71 00:03:34,360 --> 00:03:36,840 Speaker 2: and not feel as confident about investing for the future. 72 00:03:37,240 --> 00:03:39,280 Speaker 2: But I just remind everyone that I go and meet, 73 00:03:39,600 --> 00:03:44,280 Speaker 2: Actually New Zealand is very well positioned in an unstable world. Actually, 74 00:03:44,360 --> 00:03:47,720 Speaker 2: we're selling products that people want. We have lots of 75 00:03:47,800 --> 00:03:51,040 Speaker 2: strong trading relationships, and we've got one of the highest 76 00:03:51,080 --> 00:03:53,880 Speaker 2: dairy prices we've ever had two years in a row. 77 00:03:54,360 --> 00:03:56,280 Speaker 2: And there are good things happening here. And I tell you, 78 00:03:56,320 --> 00:03:59,400 Speaker 2: the international investors who we were meeting with last week said, look, 79 00:03:59,480 --> 00:04:03,320 Speaker 2: New Zealand, it's a safe haven. It's a stable place. 80 00:04:03,800 --> 00:04:06,000 Speaker 2: You guys have got great prospects ahead of you, and 81 00:04:06,040 --> 00:04:08,240 Speaker 2: I think we need to stay fixed on that and 82 00:04:08,280 --> 00:04:10,560 Speaker 2: not get too trapped in the deming gloom of what 83 00:04:10,640 --> 00:04:12,880 Speaker 2: some other countries are experiencing. Around the world. 84 00:04:13,400 --> 00:04:17,040 Speaker 1: Nichola wellis, thank you, Finance Minister. For more from Heather 85 00:04:17,160 --> 00:04:20,120 Speaker 1: Duplessy Allen Drive, listen live to news talks. It'd be 86 00:04:20,320 --> 00:04:24,200 Speaker 1: from four pm weekdays, or follow the podcast on iHeartRadio.