1 00:00:05,480 --> 00:00:05,880 Speaker 1: Kiyota. 2 00:00:05,960 --> 00:00:08,960 Speaker 2: I'm Chelsea Daniels and this is the Front Page, a 3 00:00:09,039 --> 00:00:17,000 Speaker 2: daily podcast presented by the New Zealand Herald. Every New 4 00:00:17,079 --> 00:00:20,200 Speaker 2: Zealander at the moment is feeling the impact. 5 00:00:19,800 --> 00:00:21,360 Speaker 3: Of the price of fuel. 6 00:00:21,520 --> 00:00:24,759 Speaker 2: It's something Finance Minister Nikola Willis has mentioned time and 7 00:00:24,800 --> 00:00:28,160 Speaker 2: time again. She's also made it incredibly clear that this 8 00:00:28,320 --> 00:00:31,600 Speaker 2: government won't make the same mistakes as the last, so 9 00:00:32,120 --> 00:00:36,440 Speaker 2: any financial assistance must be targeted, must be temporary. That's 10 00:00:36,520 --> 00:00:41,480 Speaker 2: why she's announced extra support for low to middle income families. 11 00:00:41,920 --> 00:00:45,559 Speaker 2: From April seventh, about one hundred and forty three thousand 12 00:00:45,640 --> 00:00:49,000 Speaker 2: working families with children will get an extra fifty dollars 13 00:00:49,040 --> 00:00:52,440 Speaker 2: a week through a boost to the in work tax credit. 14 00:00:52,920 --> 00:00:55,920 Speaker 2: But what else could the government do? What about the 15 00:00:55,920 --> 00:00:59,080 Speaker 2: rest of the population without kids, who are also struggling 16 00:00:59,120 --> 00:01:02,280 Speaker 2: to make ends. Men Today on the front Page, journalist 17 00:01:02,360 --> 00:01:05,720 Speaker 2: and publisher of The Khaka, Bernard Hickey is with us 18 00:01:05,959 --> 00:01:09,480 Speaker 2: to break down how a war fifteen thousand kilometers away 19 00:01:09,760 --> 00:01:18,040 Speaker 2: is affecting New Zealand's economy and New Zealander's wallets. First off, 20 00:01:18,240 --> 00:01:20,760 Speaker 2: Bernard an immediate reaction, what do you reckon? 21 00:01:21,280 --> 00:01:23,959 Speaker 4: Well, this is as little as the government could do 22 00:01:24,319 --> 00:01:29,200 Speaker 4: and be judged to be doing something, but it's nowhere 23 00:01:29,280 --> 00:01:33,000 Speaker 4: near and across the board big piece of help for 24 00:01:33,040 --> 00:01:36,640 Speaker 4: people who are struggling with an extra thirty fifty one 25 00:01:36,720 --> 00:01:40,760 Speaker 4: hundred dollars a week in petrol. It excludes people who 26 00:01:40,840 --> 00:01:45,600 Speaker 4: are on a benefit or on New Zealand's evaluation, or 27 00:01:46,160 --> 00:01:49,320 Speaker 4: people who aren't in working for families but are struggling, 28 00:01:49,400 --> 00:01:52,400 Speaker 4: so those people who get the independent Earner's tax credit 29 00:01:53,320 --> 00:01:56,440 Speaker 4: they miss out. The government's argument is that while the 30 00:01:56,480 --> 00:01:58,800 Speaker 4: government can't afford it, it doesn't have the money. Well, 31 00:01:58,840 --> 00:02:01,320 Speaker 4: it's not how government it's works. They're not like you 32 00:02:01,440 --> 00:02:05,200 Speaker 4: or I. They literally can create money and spend it. 33 00:02:05,360 --> 00:02:07,680 Speaker 4: That's what they do every day, and that's what banks 34 00:02:07,680 --> 00:02:10,920 Speaker 4: do every day, and then they mop it up afterwards 35 00:02:10,960 --> 00:02:15,840 Speaker 4: with bond issues. And at the moment, the risk for 36 00:02:15,919 --> 00:02:18,959 Speaker 4: the economy is that everyone goes, well, we've had a 37 00:02:19,000 --> 00:02:21,359 Speaker 4: good shock. I better hold on to my money. I'm 38 00:02:21,400 --> 00:02:23,440 Speaker 4: not going to spend it because I'm going to have 39 00:02:23,480 --> 00:02:25,920 Speaker 4: to pay for it and fuel. And it's true, but 40 00:02:26,040 --> 00:02:29,280 Speaker 4: the risk is that you have a shock to how 41 00:02:29,320 --> 00:02:32,359 Speaker 4: people are thinking about spending money, and suddenly no one's 42 00:02:32,360 --> 00:02:35,320 Speaker 4: spending any money except on petrol and before you know it, 43 00:02:35,400 --> 00:02:38,880 Speaker 4: you've got an economic downturn. So the government needed to 44 00:02:38,919 --> 00:02:43,359 Speaker 4: do something, quistion, was it enough? And also I think 45 00:02:43,360 --> 00:02:48,560 Speaker 4: it's worth challenging their thinking around why the government can't 46 00:02:48,680 --> 00:02:51,800 Speaker 4: afford it. That's not how governments works. They don't operate 47 00:02:51,960 --> 00:02:52,840 Speaker 4: like households. 48 00:02:53,080 --> 00:02:56,400 Speaker 2: If they can only afford though, to select one group 49 00:02:56,600 --> 00:02:59,200 Speaker 2: of people to receive this benefit, do you think they've 50 00:02:59,200 --> 00:03:03,920 Speaker 2: selected the right Because beneficiaries presumably don't use their car 51 00:03:04,040 --> 00:03:05,760 Speaker 2: to get to work every day, right. 52 00:03:06,120 --> 00:03:09,400 Speaker 4: Well, perhaps they're taking their kids to school, or maybe 53 00:03:09,400 --> 00:03:11,200 Speaker 4: they're trying to get a job and they need to 54 00:03:11,280 --> 00:03:14,400 Speaker 4: drive to the job interview or to the MSc office 55 00:03:14,440 --> 00:03:17,160 Speaker 4: to sign up the forms to say they're. 56 00:03:16,960 --> 00:03:17,880 Speaker 3: Trying to get a job. 57 00:03:18,440 --> 00:03:22,240 Speaker 4: So in my view they are at least as worthy 58 00:03:22,320 --> 00:03:26,320 Speaker 4: and desperate need of that help as anyone else, probably more. 59 00:03:27,000 --> 00:03:30,120 Speaker 4: And certainly there's an awful lot of people who just 60 00:03:30,160 --> 00:03:32,680 Speaker 4: don't happen to have kids, but who were struggling. Maybe 61 00:03:32,680 --> 00:03:35,400 Speaker 4: they want to have kids, and they're not going to 62 00:03:35,400 --> 00:03:37,720 Speaker 4: get any help there either. And I remember this is 63 00:03:37,760 --> 00:03:41,440 Speaker 4: only just begun, So fifty dollars a week is useful 64 00:03:41,520 --> 00:03:43,520 Speaker 4: for the people who are going to get it, but 65 00:03:43,600 --> 00:03:47,240 Speaker 4: it's not wide enough to either, I think offset the 66 00:03:47,360 --> 00:03:52,920 Speaker 4: damaging effect of people having the shock and the worry 67 00:03:53,000 --> 00:03:56,600 Speaker 4: that it chills spending in the rest of the economy. 68 00:03:57,120 --> 00:04:00,560 Speaker 2: And like you said, primarily focused on how he out 69 00:04:00,600 --> 00:04:05,080 Speaker 2: working families, and that's generally the group who does get 70 00:04:05,120 --> 00:04:06,600 Speaker 2: a lot of the benefits and does get a line. 71 00:04:06,560 --> 00:04:08,760 Speaker 2: I mean, we look at election year, we're probably going 72 00:04:08,840 --> 00:04:11,760 Speaker 2: to be seeing more working for families, benefits being announced, 73 00:04:12,080 --> 00:04:15,040 Speaker 2: things to help families, etc. Do you think single childless 74 00:04:15,040 --> 00:04:16,360 Speaker 2: people are being left out here? 75 00:04:16,440 --> 00:04:20,200 Speaker 3: Well, that'll teach them for not having kids. I'm taking 76 00:04:20,200 --> 00:04:20,679 Speaker 3: this berthon. 77 00:04:21,839 --> 00:04:27,000 Speaker 4: No, it is an unfair thing. We essentially have deified 78 00:04:27,880 --> 00:04:31,160 Speaker 4: children and families as the ones who deserve all our help. 79 00:04:32,080 --> 00:04:35,119 Speaker 4: Not surprisingly, there's a whole bunch of people who don't 80 00:04:35,120 --> 00:04:37,320 Speaker 4: have kids, and maybe they want to have kids, but 81 00:04:37,400 --> 00:04:39,800 Speaker 4: they can't afford to have kids because they're not getting 82 00:04:39,800 --> 00:04:43,480 Speaker 4: any help now. And that is one of the issues 83 00:04:43,520 --> 00:04:46,279 Speaker 4: we have more broadly in our society is at the moment, 84 00:04:46,839 --> 00:04:49,279 Speaker 4: the people with the money are the ones who can't 85 00:04:49,279 --> 00:04:53,080 Speaker 4: have kids anymore because they're over fifty or sixty. They 86 00:04:53,120 --> 00:04:56,240 Speaker 4: have a lot of wealth tied up, mostly in their homes, 87 00:04:56,279 --> 00:04:59,599 Speaker 4: sometimes in other assets. That wealth needs to go to 88 00:04:59,640 --> 00:05:02,000 Speaker 4: people who are just starting out their lives, who need 89 00:05:02,080 --> 00:05:05,080 Speaker 4: to build a home, who need to be able to 90 00:05:05,160 --> 00:05:09,240 Speaker 4: afford to invest in their kids or buy a bigger 91 00:05:09,279 --> 00:05:13,440 Speaker 4: car because they've got kids. Instead, they're looking ahead and 92 00:05:13,480 --> 00:05:16,920 Speaker 4: seeing that themselves not getting a leg up, not getting 93 00:05:17,240 --> 00:05:19,240 Speaker 4: the money from their parents if their parents are lucky 94 00:05:19,320 --> 00:05:22,160 Speaker 4: enough to have it, and us just sitting there going, well, 95 00:05:22,400 --> 00:05:24,000 Speaker 4: I'm not going to have kids then, I mean, you 96 00:05:24,040 --> 00:05:27,160 Speaker 4: say you want a higher fertility rate, Well, why don't 97 00:05:27,160 --> 00:05:30,160 Speaker 4: you help us? Because at the moment, this sort of thing, 98 00:05:30,279 --> 00:05:34,240 Speaker 4: and it's quite widespread across a lot of policies, says 99 00:05:34,320 --> 00:05:36,599 Speaker 4: if you've got kids, then you need help, but we're 100 00:05:36,600 --> 00:05:38,320 Speaker 4: not going to give you help before we have the kids, 101 00:05:38,440 --> 00:05:41,320 Speaker 4: which means that people don't have the kids. And that's 102 00:05:41,360 --> 00:05:45,039 Speaker 4: a problem, I think long run, and it's a symptom 103 00:05:45,480 --> 00:05:49,840 Speaker 4: of a society which has become unbalanced and unfair in 104 00:05:49,920 --> 00:05:52,200 Speaker 4: favor of all the rich people who happen to be 105 00:05:52,240 --> 00:05:55,000 Speaker 4: born early enough to get a cheap house and have 106 00:05:55,200 --> 00:05:58,760 Speaker 4: risen the value of that higher and poorer young people 107 00:05:58,800 --> 00:06:01,479 Speaker 4: who have no chance of getting to ouse because there's 108 00:06:01,520 --> 00:06:03,560 Speaker 4: no way they can borrow a hundred percent and because 109 00:06:03,600 --> 00:06:06,440 Speaker 4: the reserve being changed the rules halfway through and so 110 00:06:06,760 --> 00:06:10,560 Speaker 4: they're stuck. And this is another example of where the 111 00:06:10,600 --> 00:06:12,920 Speaker 4: people who were born at the wrong time are being 112 00:06:12,960 --> 00:06:13,560 Speaker 4: punished for it. 113 00:06:20,000 --> 00:06:23,080 Speaker 1: The policy will cost up to three hundred and seventy 114 00:06:23,160 --> 00:06:28,279 Speaker 1: three million dollars. Importantly, this cost will be met from 115 00:06:28,279 --> 00:06:32,359 Speaker 1: within the budget twenty twenty six operating allowance, which we 116 00:06:32,440 --> 00:06:36,919 Speaker 1: have previously committed will not exceed two point four billion dollars. 117 00:06:37,360 --> 00:06:40,040 Speaker 1: That means the government will not be borrowing any more 118 00:06:40,040 --> 00:06:44,040 Speaker 1: than was previously planned to deliver this temporary and targeted 119 00:06:44,200 --> 00:06:48,560 Speaker 1: support funding. The policy this way will not add to 120 00:06:48,560 --> 00:06:52,400 Speaker 1: forecast debt and will not add to inflationary pressure. 121 00:06:55,000 --> 00:06:58,120 Speaker 2: You mentioned that the government obviously as playing this part 122 00:06:58,160 --> 00:07:01,320 Speaker 2: of not being able to afford anything. I mean, I 123 00:07:01,400 --> 00:07:06,160 Speaker 2: understand we have been warned by ratings agency FETCH that 124 00:07:06,520 --> 00:07:09,560 Speaker 2: they're watching our government debt levels very closely. It's kept 125 00:07:09,640 --> 00:07:13,840 Speaker 2: the country's core rating at about a plus for now. 126 00:07:14,320 --> 00:07:16,400 Speaker 2: What does that actually mean? And do you think that 127 00:07:16,440 --> 00:07:19,800 Speaker 2: the government has been forced into being fiscally responsible appearing 128 00:07:19,880 --> 00:07:21,920 Speaker 2: so because of the big deal that they've made of 129 00:07:21,960 --> 00:07:23,200 Speaker 2: the COVID final report. 130 00:07:23,640 --> 00:07:26,160 Speaker 4: Yeah, this is a choice the government's making. This isn't 131 00:07:26,200 --> 00:07:29,920 Speaker 4: about whether the financial markets will let them borrow or 132 00:07:30,040 --> 00:07:35,080 Speaker 4: whether the referees and global financial markets are blowing their 133 00:07:35,120 --> 00:07:37,520 Speaker 4: whistle and saying, get your hand out of that rock. 134 00:07:37,600 --> 00:07:39,320 Speaker 3: You can't put that in there. They're not. 135 00:07:40,040 --> 00:07:44,040 Speaker 4: This is ratings agencies trying to put some sort of 136 00:07:44,080 --> 00:07:48,400 Speaker 4: label on a thing. Ratings agencies remember rated all sorts 137 00:07:48,400 --> 00:07:50,720 Speaker 4: of stuff triple A before the global financial crisis and 138 00:07:50,840 --> 00:07:55,760 Speaker 4: blew up anyone who watches closely how ratings agencies operate. 139 00:07:56,360 --> 00:07:57,400 Speaker 3: No, they're not. 140 00:07:57,600 --> 00:08:01,440 Speaker 4: Really there to look after to the interests of the 141 00:08:01,440 --> 00:08:04,840 Speaker 4: people who have lent the money. They're there to look 142 00:08:04,880 --> 00:08:07,160 Speaker 4: after the interests of the people who are trying to 143 00:08:07,160 --> 00:08:10,920 Speaker 4: borrow money. That's where they get their money from. And 144 00:08:11,080 --> 00:08:15,600 Speaker 4: the global bond markets, which some politicians say are in 145 00:08:15,720 --> 00:08:18,040 Speaker 4: charge of the economy, they're the ones telling us what 146 00:08:18,160 --> 00:08:21,400 Speaker 4: to do. There's this old saying that James Carvill, the 147 00:08:21,560 --> 00:08:25,840 Speaker 4: Democratic strategists, said long time ago that if he was reincarnated, 148 00:08:25,960 --> 00:08:28,520 Speaker 4: he wanted to come back not as the pope or 149 00:08:28,840 --> 00:08:30,800 Speaker 4: the best baseball player in the world, but as the 150 00:08:30,800 --> 00:08:32,800 Speaker 4: bond market because he could beat up anyone. 151 00:08:33,080 --> 00:08:34,839 Speaker 3: I've heard that one before, But. 152 00:08:36,240 --> 00:08:39,120 Speaker 4: Bond markets don't beat up anyone anymore. Donald Trump is 153 00:08:39,160 --> 00:08:44,720 Speaker 4: doing absolutely extraordinary, horrible things. He's borrowing hand over first. 154 00:08:44,840 --> 00:08:49,040 Speaker 4: They're not punishing him. And when you look at how 155 00:08:49,480 --> 00:08:52,760 Speaker 4: bond investors work, they have so much money they want 156 00:08:52,760 --> 00:08:55,280 Speaker 4: to lend to governments, and governments don't want to borrow 157 00:08:55,320 --> 00:08:55,679 Speaker 4: from them. 158 00:08:55,720 --> 00:08:57,679 Speaker 3: Why not, because. 159 00:08:57,559 --> 00:09:02,320 Speaker 4: Governments believe that they're are off not borrowing. I actually 160 00:09:02,360 --> 00:09:04,760 Speaker 4: think it's an ideological thing. They're saying, we want a 161 00:09:04,800 --> 00:09:08,679 Speaker 4: small government. Small governments are better than big ones, and 162 00:09:08,800 --> 00:09:12,120 Speaker 4: that's simply not true. If you look at other small 163 00:09:12,160 --> 00:09:15,160 Speaker 4: economies like ours with four or five million people, the 164 00:09:15,200 --> 00:09:17,640 Speaker 4: ones that are most successful, that are growing the fastest, 165 00:09:17,679 --> 00:09:20,960 Speaker 4: that are the highest incomes, the best productivity growth are 166 00:09:20,960 --> 00:09:27,480 Speaker 4: the ones with the biggest governments. Denmark, Finland, Norway, places 167 00:09:27,520 --> 00:09:27,960 Speaker 4: like this. 168 00:09:27,880 --> 00:09:29,280 Speaker 2: And do they have a lot of government there? 169 00:09:30,080 --> 00:09:30,920 Speaker 3: Some of them do. 170 00:09:31,240 --> 00:09:35,240 Speaker 4: And it's not a problem because remember, a government doesn't 171 00:09:35,280 --> 00:09:38,280 Speaker 4: have to go out and borrow money from the private 172 00:09:38,320 --> 00:09:41,280 Speaker 4: sector and spend it or tax it from the private 173 00:09:41,320 --> 00:09:44,360 Speaker 4: sector or spend it. A government spins it and then 174 00:09:44,400 --> 00:09:47,000 Speaker 4: goes out after the fact and mops it up to 175 00:09:47,040 --> 00:09:49,680 Speaker 4: make sure that it doesn't create inflation. Now, that is 176 00:09:49,720 --> 00:09:51,960 Speaker 4: a fair point. If you have too much money, if 177 00:09:52,000 --> 00:09:55,600 Speaker 4: you like that's printed by the government and banks, then 178 00:09:55,640 --> 00:09:58,360 Speaker 4: that is going to create inflation if it's more than 179 00:09:58,400 --> 00:10:01,280 Speaker 4: the resources that we've got. But we have hundreds of 180 00:10:01,280 --> 00:10:03,600 Speaker 4: thousands of people out of work right now. We have 181 00:10:03,679 --> 00:10:06,840 Speaker 4: all sorts of resources just sitting there doing nothing, and 182 00:10:06,880 --> 00:10:10,880 Speaker 4: they should be mobilized. And that's what governments should do. Remember, 183 00:10:10,960 --> 00:10:14,760 Speaker 4: a government is not a household, and when the government 184 00:10:14,840 --> 00:10:17,520 Speaker 4: chooses to not spend money, everything stops. 185 00:10:17,840 --> 00:10:18,040 Speaker 3: You know. 186 00:10:18,360 --> 00:10:22,560 Speaker 4: It's a bit like if you go into a shop 187 00:10:22,960 --> 00:10:26,080 Speaker 4: and everyone in the shop suddenly decides at once not 188 00:10:26,160 --> 00:10:29,760 Speaker 4: to spend any money, then nothing happens. Whereas a government 189 00:10:29,920 --> 00:10:32,960 Speaker 4: can go in there and start spending money to get 190 00:10:32,960 --> 00:10:36,560 Speaker 4: things circulating. Again, that's where the government has a balance 191 00:10:36,559 --> 00:10:40,880 Speaker 4: sheet it can use to essentially protect and to act 192 00:10:40,920 --> 00:10:43,319 Speaker 4: as a buffer. Now is that time. There's a lot 193 00:10:43,320 --> 00:10:45,480 Speaker 4: of talk about New Zealand wanting to save for a 194 00:10:45,559 --> 00:10:49,360 Speaker 4: rainy day and that we need to have a tight 195 00:10:49,400 --> 00:10:51,960 Speaker 4: budget to save for a rainy day. The rainy day 196 00:10:52,000 --> 00:10:55,880 Speaker 4: is here. Now's the time to use that debt to 197 00:10:57,679 --> 00:11:01,400 Speaker 4: essentially save people from a pretty tough time. This is 198 00:11:01,440 --> 00:11:04,200 Speaker 4: a big shock. This wasn't planned. It's no one's fault 199 00:11:04,960 --> 00:11:07,360 Speaker 4: apart from the Rans and the Americans and the Israelis. 200 00:11:07,840 --> 00:11:10,360 Speaker 4: And so this is where a government steps up, and 201 00:11:10,559 --> 00:11:13,400 Speaker 4: governments of both flavors have done this over the last 202 00:11:13,440 --> 00:11:15,959 Speaker 4: twenty years or so. Now you can argue about whether 203 00:11:16,000 --> 00:11:19,320 Speaker 4: it was well spent money or whether it was enough 204 00:11:19,520 --> 00:11:24,360 Speaker 4: or too much. But certainly John Key's government in twenty eight, nine, ten, 205 00:11:24,559 --> 00:11:27,839 Speaker 4: eleven and twelve with the global financial crisis and then 206 00:11:27,840 --> 00:11:30,560 Speaker 4: the Christich earthquakes did step up. They did spend a 207 00:11:30,559 --> 00:11:33,080 Speaker 4: lot of money. Now in theory they borrowed it. What 208 00:11:33,120 --> 00:11:35,840 Speaker 4: they actually did was printed the money and spent it 209 00:11:35,880 --> 00:11:39,200 Speaker 4: into the economy to keep things going. They didn't create 210 00:11:39,240 --> 00:11:42,840 Speaker 4: inflation that time around. Now, when it happened in twenty 211 00:11:42,880 --> 00:11:46,760 Speaker 4: twenty and twenty twenty one with COVID, we did get inflation. Now, 212 00:11:47,280 --> 00:11:49,520 Speaker 4: the current government argues that's because the government spent too 213 00:11:49,600 --> 00:11:53,560 Speaker 4: much money. That's a very debatable point. All around the world, 214 00:11:53,840 --> 00:11:56,600 Speaker 4: exactly the same thing happened, and it wasn't because New 215 00:11:56,679 --> 00:11:59,120 Speaker 4: Zealand printed money. It was ware everyone printed money at 216 00:11:59,120 --> 00:12:02,199 Speaker 4: the same time, and there was an energy price shock 217 00:12:02,559 --> 00:12:07,120 Speaker 4: that was the Russian invasion of Ukraine. So you can 218 00:12:07,360 --> 00:12:11,560 Speaker 4: very plausibly argue the inflation didn't come from government spending. 219 00:12:12,120 --> 00:12:15,760 Speaker 4: It came from central banks printing money, and it came 220 00:12:15,880 --> 00:12:18,240 Speaker 4: from an energy price shock. Now we just had the 221 00:12:18,360 --> 00:12:21,440 Speaker 4: energy price shock. The one thing we really need now 222 00:12:21,679 --> 00:12:23,760 Speaker 4: is for the government to do things to stop those 223 00:12:23,800 --> 00:12:26,920 Speaker 4: prices rising in other countries. What they're doing is to 224 00:12:26,960 --> 00:12:31,200 Speaker 4: stop the inflation flowing through from higher energy prices. Is 225 00:12:31,240 --> 00:12:35,200 Speaker 4: they are giving subsidies. You know, they are removing excise duties, 226 00:12:35,480 --> 00:12:39,480 Speaker 4: as the previous labor government did. Now the current government 227 00:12:39,559 --> 00:12:42,840 Speaker 4: argues that it is too broad a benefit that people 228 00:12:42,840 --> 00:12:47,120 Speaker 4: who didn't need it got the money. Well, that was 229 00:12:47,120 --> 00:12:50,200 Speaker 4: certainly the case in twenty twenty and twenty one when 230 00:12:50,559 --> 00:12:52,400 Speaker 4: twenty billion dollars was given. 231 00:12:52,200 --> 00:12:55,360 Speaker 3: To small businesses and large businesses. Many of them didn't 232 00:12:55,400 --> 00:12:55,760 Speaker 3: give it. 233 00:12:55,679 --> 00:12:59,520 Speaker 4: Back after they've suddenly discovered they didn't need it effectively 234 00:12:59,520 --> 00:13:03,120 Speaker 4: at all, up and bank accounts. So I think it's 235 00:13:03,160 --> 00:13:06,120 Speaker 4: worth challenging this idea a that we can't afford it, 236 00:13:06,160 --> 00:13:10,280 Speaker 4: and be that only a small proportion of the population, 237 00:13:10,480 --> 00:13:12,400 Speaker 4: you know, one hundred and fifty thousand families or so 238 00:13:13,080 --> 00:13:14,920 Speaker 4: are the ones who could get it. There are seven 239 00:13:15,000 --> 00:13:19,880 Speaker 4: hundred and fifty thousand other people who don't have families 240 00:13:19,880 --> 00:13:22,640 Speaker 4: but are getting the Independent Earnest Tax Credit who could 241 00:13:22,640 --> 00:13:25,800 Speaker 4: certainly do with that fifty dollars a week. And on 242 00:13:25,840 --> 00:13:27,840 Speaker 4: top of that, you've got a whole bunch of beneficiaries 243 00:13:27,840 --> 00:13:31,199 Speaker 4: and u ze on supernuitants who, particularly the ones who 244 00:13:31,240 --> 00:13:35,320 Speaker 4: are renting, definitely need it. So not thing's worth challenging the. 245 00:13:35,320 --> 00:13:35,839 Speaker 3: Government on that. 246 00:13:41,800 --> 00:13:44,560 Speaker 5: Well, right now, the government's gaining hundreds of millions of 247 00:13:44,559 --> 00:13:47,840 Speaker 5: dollars and winfall games from the increase in fuel prices, 248 00:13:48,080 --> 00:13:50,640 Speaker 5: because every time the petrol price goes up, the government's 249 00:13:50,679 --> 00:13:54,160 Speaker 5: GST take increases. They are literally raking in hundreds of 250 00:13:54,160 --> 00:13:57,680 Speaker 5: millions of dollars extra because of the increase in fuel prices. 251 00:13:57,840 --> 00:13:59,520 Speaker 5: I'm saying, if you give some of that money back 252 00:13:59,520 --> 00:14:01,800 Speaker 5: to people, that's going to be a good thing, and 253 00:14:01,840 --> 00:14:03,959 Speaker 5: it's going to help people through what is a really 254 00:14:03,960 --> 00:14:05,800 Speaker 5: big shock for a lot of household budgets. 255 00:14:07,720 --> 00:14:10,840 Speaker 2: Why do you think they tapped into the Working for 256 00:14:10,920 --> 00:14:13,840 Speaker 2: Families tax credit that in work tax credit and not 257 00:14:13,920 --> 00:14:16,880 Speaker 2: just give a lump sum to everybody who they thought 258 00:14:17,440 --> 00:14:18,599 Speaker 2: may deem it necessary. 259 00:14:18,840 --> 00:14:21,920 Speaker 4: Yeah, I mean the Donald Trump approach, you know, just 260 00:14:21,960 --> 00:14:24,440 Speaker 4: write a check and he signed it, Donald Trump, and 261 00:14:24,440 --> 00:14:26,640 Speaker 4: gave it to anyone. That was actually a very effective 262 00:14:26,680 --> 00:14:30,360 Speaker 4: intervention in the economy. Both Trump and Joe Biden did it, 263 00:14:30,840 --> 00:14:34,400 Speaker 4: and you could argue our previous government, the labor government 264 00:14:34,480 --> 00:14:37,200 Speaker 4: did it as well when they did their cost of 265 00:14:37,240 --> 00:14:40,440 Speaker 4: living payments, which was literally a lump sum just injected 266 00:14:40,480 --> 00:14:43,640 Speaker 4: into people's accounts. That's one way to do it, and 267 00:14:43,920 --> 00:14:45,720 Speaker 4: this is something we should think about a lot more 268 00:14:45,760 --> 00:14:48,280 Speaker 4: in future. How do we deal with these sorts of 269 00:14:48,400 --> 00:14:51,000 Speaker 4: crises and how do we in a moment of panic 270 00:14:51,080 --> 00:14:53,840 Speaker 4: when people are really worried and they're not spending money. 271 00:14:54,080 --> 00:14:57,200 Speaker 4: If everyone stopped spending their money all at once, you 272 00:14:57,280 --> 00:15:00,320 Speaker 4: have an economic collapse. And we've seen what happened when 273 00:15:00,480 --> 00:15:03,440 Speaker 4: everyone does that all at once. You know, that's what's 274 00:15:03,480 --> 00:15:07,400 Speaker 4: called a great depression. And that was why in twenty 275 00:15:07,400 --> 00:15:09,760 Speaker 4: twenty and twenty twenty one the government stepped in and 276 00:15:09,920 --> 00:15:13,080 Speaker 4: gave away cash. Now, of course that that also meant 277 00:15:13,080 --> 00:15:15,000 Speaker 4: that there are some people who got it who perhaps 278 00:15:15,040 --> 00:15:18,240 Speaker 4: really didn't deserve it or need it. You know, the 279 00:15:18,280 --> 00:15:20,840 Speaker 4: old the phrase that the government's used as the French 280 00:15:20,880 --> 00:15:23,200 Speaker 4: backpackers got the money, and there'd be a whole bunch 281 00:15:23,200 --> 00:15:26,120 Speaker 4: of billionaires. You've got the money too, And I can 282 00:15:26,160 --> 00:15:30,240 Speaker 4: see how that isn't a good look. But if you 283 00:15:30,280 --> 00:15:33,920 Speaker 4: are looking for something that is fast, that isn't you know, 284 00:15:34,040 --> 00:15:36,480 Speaker 4: lots of questions asked, and by the time you've asked 285 00:15:36,520 --> 00:15:39,400 Speaker 4: the questions, the crisis has come, gone or gotten worse, 286 00:15:40,480 --> 00:15:44,120 Speaker 4: then cash payments are a good idea. In fact, you know, 287 00:15:44,160 --> 00:15:48,640 Speaker 4: some of the hardest monetraists of all time, including Milton Friedman, 288 00:15:48,760 --> 00:15:53,000 Speaker 4: suggested that cash payments were a good idea when everything stops. 289 00:15:53,040 --> 00:15:54,480 Speaker 3: He calls it helicopter money. 290 00:15:54,640 --> 00:15:57,680 Speaker 4: This idea that the economy is suddenly ground to a halt, 291 00:15:57,800 --> 00:16:00,160 Speaker 4: no one's spending anything. One way you can solve that 292 00:16:00,320 --> 00:16:03,040 Speaker 4: is to fly above the crowd with a helicopter and 293 00:16:03,040 --> 00:16:05,440 Speaker 4: tip the cash out the door, and it'll flood down. 294 00:16:05,480 --> 00:16:07,880 Speaker 4: People will pick up the money off the ground, go 295 00:16:07,960 --> 00:16:11,440 Speaker 4: spend it, and get the economy going again. Now that's 296 00:16:12,040 --> 00:16:15,200 Speaker 4: one way to do it. I personally think that a 297 00:16:15,240 --> 00:16:18,640 Speaker 4: more effective way to do it would be to inject 298 00:16:18,640 --> 00:16:22,480 Speaker 4: it into everyone's bank account if they've got an ID account, 299 00:16:22,480 --> 00:16:25,000 Speaker 4: if they're already a taxpayer, and most people who would 300 00:16:25,040 --> 00:16:27,920 Speaker 4: need it already are. And if you want it to 301 00:16:27,920 --> 00:16:31,720 Speaker 4: be really cautious about how the money was spent, you're 302 00:16:31,720 --> 00:16:35,480 Speaker 4: worried people going to nip out there and by themselves 303 00:16:35,480 --> 00:16:38,680 Speaker 4: a good time. Well, you know, this is why we 304 00:16:39,000 --> 00:16:45,640 Speaker 4: have invented electronic money that can't be spent on all 305 00:16:45,720 --> 00:16:49,000 Speaker 4: sorts of dodgy things. So I think this is something 306 00:16:49,040 --> 00:16:52,680 Speaker 4: we need to think about in future, having a much cleaner, 307 00:16:52,920 --> 00:16:57,840 Speaker 4: faster way to apply cash more broadly in times of 308 00:16:57,920 --> 00:17:01,880 Speaker 4: crisis that doesn't just lie on things like the Urn 309 00:17:01,960 --> 00:17:04,080 Speaker 4: tax credit of working for families, which is what the 310 00:17:04,119 --> 00:17:05,000 Speaker 4: government's doing here. 311 00:17:05,200 --> 00:17:07,199 Speaker 2: Yeah, actually I was talking of it reminds me. I 312 00:17:07,240 --> 00:17:09,120 Speaker 2: was talking to my parents at the weekend and they 313 00:17:09,119 --> 00:17:11,960 Speaker 2: live in South Australia and they mentioned to me, oh, 314 00:17:11,960 --> 00:17:14,600 Speaker 2: we got we got one hundred dollars worth of seafood, 315 00:17:14,800 --> 00:17:17,080 Speaker 2: but we only paid heart We only paid fifty dollars. 316 00:17:17,080 --> 00:17:19,200 Speaker 2: And I said, well, that seems like a good idea. 317 00:17:19,280 --> 00:17:21,720 Speaker 2: Why is that, Well, apparently the South Australian government has 318 00:17:21,960 --> 00:17:25,560 Speaker 2: given out subsidies for things like the seafood sector. I 319 00:17:25,640 --> 00:17:28,080 Speaker 2: think you can go stay at night at a hotel 320 00:17:28,200 --> 00:17:31,119 Speaker 2: or something in the Barossa or something for a bit cheaper. 321 00:17:31,240 --> 00:17:32,840 Speaker 2: Is that something that that could happen. 322 00:17:32,960 --> 00:17:35,000 Speaker 4: I mean, there's been lots of ways you can do that, 323 00:17:35,119 --> 00:17:37,040 Speaker 4: and the governments around the world have come up with 324 00:17:37,080 --> 00:17:41,040 Speaker 4: all sorts of interesting ways. Simplest way, actually, if you're 325 00:17:41,080 --> 00:17:45,359 Speaker 4: being really brutal about it, is to cut GSTA from 326 00:17:45,560 --> 00:17:48,119 Speaker 4: fifteen percent to ten percent in a temporary way. Now 327 00:17:48,160 --> 00:17:52,560 Speaker 4: that might seem like an incredibly complicated thing to do, 328 00:17:52,760 --> 00:17:56,000 Speaker 4: it's not that hard, and that would be the way 329 00:17:56,040 --> 00:17:59,160 Speaker 4: to reduce prices. Apart from anything else. What you're delivering 330 00:17:59,280 --> 00:18:03,400 Speaker 4: is an off setting in deflationary shock to an inflationary shock. 331 00:18:03,760 --> 00:18:06,680 Speaker 4: But the most effective way that governments around the world 332 00:18:06,720 --> 00:18:10,560 Speaker 4: have ensured that this energy price shock doesn't flow through 333 00:18:10,600 --> 00:18:12,920 Speaker 4: to the rest of the economy is to make sure 334 00:18:12,960 --> 00:18:17,680 Speaker 4: that either there are bigger subsidies on petrel on diesel 335 00:18:18,400 --> 00:18:20,639 Speaker 4: or that the taxes you put on top of petrol 336 00:18:20,760 --> 00:18:24,359 Speaker 4: diesel are cut. And that's what the previous labor government did. 337 00:18:24,920 --> 00:18:28,800 Speaker 4: And you could argue, at a time when we're trying 338 00:18:28,840 --> 00:18:31,639 Speaker 4: to conserve fuel, you wouldn't want to encourage people to 339 00:18:31,720 --> 00:18:33,399 Speaker 4: use more of it by cutting its price. 340 00:18:33,920 --> 00:18:35,720 Speaker 3: But what you can do is keep the price. 341 00:18:35,520 --> 00:18:39,359 Speaker 4: The same by using your excise duties to offset the 342 00:18:39,440 --> 00:18:43,840 Speaker 4: increase in the basic cost of fuel, and that would 343 00:18:43,880 --> 00:18:45,840 Speaker 4: be one way to solve the issue. Now, it would 344 00:18:45,880 --> 00:18:48,960 Speaker 4: be more expensive from a government point of view, but 345 00:18:49,040 --> 00:18:51,680 Speaker 4: it would be more effective at spreading the load. I 346 00:18:51,760 --> 00:18:55,760 Speaker 4: think part of the issue here is that when COVID happened, 347 00:18:56,880 --> 00:19:01,480 Speaker 4: there are a lot of predictions of doom, thirty percent unemployment, 348 00:19:01,960 --> 00:19:06,840 Speaker 4: and people really threw the kitchen sink at everything, and 349 00:19:06,880 --> 00:19:08,840 Speaker 4: maybe they threw too much in the kitchen sink. 350 00:19:09,440 --> 00:19:11,840 Speaker 3: In retrospect, they through the kitchen, that's right. 351 00:19:12,640 --> 00:19:15,320 Speaker 4: And you know, maybe the price of the kitchen went 352 00:19:15,440 --> 00:19:17,639 Speaker 4: up a bit. Certainly a lot of houses that went 353 00:19:17,720 --> 00:19:21,320 Speaker 4: up a bit, but it meant we didn't have a depression. 354 00:19:21,560 --> 00:19:24,720 Speaker 3: Now, how much is too much and how much is 355 00:19:24,720 --> 00:19:27,440 Speaker 3: not enough? It really is a Goldilock situation. 356 00:19:28,320 --> 00:19:32,199 Speaker 4: And the approach that was taken in COVID was what 357 00:19:32,240 --> 00:19:35,080 Speaker 4: they call a least regrets approach. You know, you don't 358 00:19:35,080 --> 00:19:36,879 Speaker 4: want to be the one at the end of the 359 00:19:36,960 --> 00:19:41,840 Speaker 4: day who was too cautious and then we had a depression. Now, 360 00:19:41,840 --> 00:19:45,480 Speaker 4: no one's suggesting a depression of this case, but you've 361 00:19:45,480 --> 00:19:48,160 Speaker 4: got to remember we're at the end of a long 362 00:19:48,200 --> 00:19:51,600 Speaker 4: supply chain. We've just seen a doubling of diesel prices. 363 00:19:52,920 --> 00:19:58,320 Speaker 4: We are several weeks away, assuming all the ships that 364 00:19:58,400 --> 00:20:01,199 Speaker 4: we told are coming we arrive, and there are new 365 00:20:01,240 --> 00:20:03,320 Speaker 4: ones after that we don't know about. 366 00:20:03,160 --> 00:20:04,520 Speaker 3: Yet that they arrive. 367 00:20:05,320 --> 00:20:08,960 Speaker 4: You know, we're several weeks away from significant rationing, a 368 00:20:09,000 --> 00:20:11,800 Speaker 4: significant slow down in the economy simply because the trucks 369 00:20:11,840 --> 00:20:16,879 Speaker 4: can't move or the diesel, which really does fuel the 370 00:20:16,920 --> 00:20:21,760 Speaker 4: economy is not there. And so I think, yes, this 371 00:20:21,840 --> 00:20:25,159 Speaker 4: is one step. I suspect if things continue on, and 372 00:20:25,160 --> 00:20:27,760 Speaker 4: this war keeps going on, and that straight remains closed, 373 00:20:28,280 --> 00:20:30,479 Speaker 4: the government will have to look at other things. And 374 00:20:30,480 --> 00:20:34,119 Speaker 4: that's where it should look at things like cutting those 375 00:20:34,200 --> 00:20:37,240 Speaker 4: taxes to keep the price of diesel and petrol where 376 00:20:37,240 --> 00:20:39,480 Speaker 4: it is it doesn't rise out anymore, or look at 377 00:20:39,560 --> 00:20:42,800 Speaker 4: other ways to ensure those cash payments, if you like, 378 00:20:42,880 --> 00:20:46,160 Speaker 4: go broader than just those people I'm working for families. 379 00:20:46,280 --> 00:20:50,600 Speaker 2: We mentioned GST before, and I was thinking in terms 380 00:20:50,680 --> 00:20:52,680 Speaker 2: of and this is something the opposition leader, Labor leader 381 00:20:52,760 --> 00:20:56,600 Speaker 2: Chris Heipkins brought up this morning as well, that if 382 00:20:56,640 --> 00:20:59,679 Speaker 2: you have, if you pay GST, obviously fuel prices are 383 00:20:59,680 --> 00:21:03,040 Speaker 2: going up, so GST is going up now the government's 384 00:21:03,080 --> 00:21:05,880 Speaker 2: presumably making hundreds of millions of dollars from that GST 385 00:21:06,040 --> 00:21:08,440 Speaker 2: from those fuel price increases. 386 00:21:08,960 --> 00:21:10,000 Speaker 3: Is there something. 387 00:21:10,440 --> 00:21:14,720 Speaker 2: Legislative that doesn't allow us to use that GST money 388 00:21:15,280 --> 00:21:16,320 Speaker 2: for emergency purposes? 389 00:21:16,440 --> 00:21:18,800 Speaker 3: Or like, why why is it? Why isn't that a 390 00:21:18,800 --> 00:21:21,000 Speaker 3: little pot that we can dip in take they're taking it. 391 00:21:20,880 --> 00:21:23,640 Speaker 4: It would be interesting to know how much the three 392 00:21:23,720 --> 00:21:27,119 Speaker 4: hundred million or so that it costs for this fifty 393 00:21:27,160 --> 00:21:30,040 Speaker 4: dollars a week for working for families, how much that 394 00:21:30,119 --> 00:21:33,240 Speaker 4: cost is because I suspect it's not that much more 395 00:21:33,520 --> 00:21:39,440 Speaker 4: than the extra GST coming in because of the increase 396 00:21:39,480 --> 00:21:40,199 Speaker 4: in fuel costs. 397 00:21:40,240 --> 00:21:42,600 Speaker 2: So I think it's about if presumably if it ran 398 00:21:42,680 --> 00:21:45,760 Speaker 2: for a year, which they've put the cap on, it'd 399 00:21:45,800 --> 00:21:48,000 Speaker 2: be three seventy five million. 400 00:21:48,640 --> 00:21:51,119 Speaker 4: The Yeah, I haven't done the numbers on how much 401 00:21:51,200 --> 00:21:53,840 Speaker 4: extra guic T you get when you have a diesel 402 00:21:53,880 --> 00:21:57,800 Speaker 4: price at you know, three dollars fifty and a ninety 403 00:21:57,800 --> 00:21:59,080 Speaker 4: one price at four dollars. 404 00:21:59,200 --> 00:22:01,320 Speaker 2: More than likely more than three hundred exactly. 405 00:22:01,520 --> 00:22:04,439 Speaker 4: So that's a really good point. It'd be worth me 406 00:22:04,560 --> 00:22:07,639 Speaker 4: after this, I'm going away and doing the calculations, because 407 00:22:07,760 --> 00:22:11,840 Speaker 4: you're right, there is a windfall benefit to the government 408 00:22:11,840 --> 00:22:18,720 Speaker 4: itself of high gas prices, high diesel and petrol prices. 409 00:22:18,960 --> 00:22:21,879 Speaker 4: And remember this is very they call it in elastic. 410 00:22:21,960 --> 00:22:25,280 Speaker 4: You know, in a lot of goods and services. You know, 411 00:22:25,359 --> 00:22:29,560 Speaker 4: if they put the price of the drinks at the 412 00:22:29,760 --> 00:22:32,240 Speaker 4: pub up, they double them or trible them, you're probably 413 00:22:32,280 --> 00:22:33,959 Speaker 4: not going to go to the pub. You'll think, well, 414 00:22:33,960 --> 00:22:36,720 Speaker 4: I can probably get away without having that beer. But 415 00:22:36,800 --> 00:22:38,560 Speaker 4: if you need the fuel to take your kids to 416 00:22:38,560 --> 00:22:40,920 Speaker 4: school or go to work or whatever, there's no choice. 417 00:22:40,960 --> 00:22:43,440 Speaker 4: You just have to pay. And that's the sort of 418 00:22:43,520 --> 00:22:46,960 Speaker 4: slightly frustrating thing is it's one of those goods, but 419 00:22:47,080 --> 00:22:49,600 Speaker 4: like the greats in a way where you're addicted to 420 00:22:49,640 --> 00:22:52,520 Speaker 4: it and you still need it. And this is one 421 00:22:52,560 --> 00:22:57,399 Speaker 4: thing where the government should be clear about what the 422 00:22:57,440 --> 00:23:02,480 Speaker 4: net result of the extra gustus this three hundred and 423 00:23:02,880 --> 00:23:06,080 Speaker 4: ninety million dollars over a year would be, and for 424 00:23:06,119 --> 00:23:08,040 Speaker 4: now most people think it'll be much less than a year. 425 00:23:08,240 --> 00:23:09,440 Speaker 2: Thanks for joining us, Bernard. 426 00:23:09,960 --> 00:23:16,200 Speaker 6: Yes, that's it for this episode of the Front Page. 427 00:23:16,520 --> 00:23:19,879 Speaker 6: You can read more about today's stories and extensive news 428 00:23:19,920 --> 00:23:23,960 Speaker 6: coverage at enzidherld dot co dot enz. The Front Page 429 00:23:24,000 --> 00:23:27,720 Speaker 6: is hosted and produced by me Chelsea Daniels Caine. Dicky 430 00:23:28,000 --> 00:23:32,000 Speaker 6: is our studio operator, Richard Martin, our producer and editor, 431 00:23:32,200 --> 00:23:34,960 Speaker 6: and our executive producer is Jane Ye. 432 00:23:35,240 --> 00:23:38,159 Speaker 2: Follow the front page on the iHeart app or wherever 433 00:23:38,200 --> 00:23:38,720 Speaker 2: you get your. 434 00:23:38,600 --> 00:23:42,600 Speaker 6: Podcasts, and join us next time for another look beyond 435 00:23:42,760 --> 00:23:45,359 Speaker 6: the headlines.