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Barbara Edmonds: Labour Finance Spokesperson on the preview of the 2025 Budget · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: The government harving the operating allowance and this budget to
• 0:03
  Speaker 1: one point three billion it was two point four billion
• 0:05
  Speaker 1: billions and savings will be found to fund new stuff, health, education, cops, defense,
• 0:10
  Speaker 1: They're all getting a boost, according to the minister yesterday.
• 0:13
  Speaker 1: Labour's finance spokesperson Barbara Evans will be this morning. Barbara,
• 0:16
  Speaker 1: Good morning, Good morning, Ryan.
• 0:18
  Speaker 2: How are you.
• 0:19
  Speaker 1: I'm very well, thank you. Good to have you on.
• 0:20
  Speaker 1: Did you see that note from ASB last night. They're
• 0:23
  Speaker 1: perking interest rates I'll have to go lower to do
• 0:25
  Speaker 1: more of the heavy lifting for growth. What do you
• 0:27
  Speaker 1: make of it?
• 0:28
  Speaker 2: Yeah, that I've seen that commentary a little bit as
• 0:31
  Speaker 2: well online from different economists and that's really to help
• 0:35
  Speaker 2: stimulate the economy and growth. So if that's the case,
• 0:39
  Speaker 2: I mean, I know the Reserve Bank governor or, the
• 0:41
  Speaker 2: previous guy said that there'll be two cuts before the
• 0:45
  Speaker 2: middle of the year. So the Financial Stability Report will
• 0:48
  Speaker 2: come out next week, so it'll be interesting to see
• 0:51
  Speaker 2: where they land.
• 0:51
  Speaker 1: That would be a good thing, though, wouldn't it. I mean,
• 0:53
  Speaker 1: if you have the Reserve Bank doing more of the
• 0:56
  Speaker 1: heavy lifting bringing our mortgage rates down so we're not
• 1:00
  Speaker 1: so poor, is that not a good outcome.
• 1:02
  Speaker 2: Yeah, that is a good outcome if you've got a
• 1:05
  Speaker 2: mortgage and if you rent, obviously, but it's very much
• 1:09
  Speaker 2: clear that it's most the economy is not growing.
• 1:12
  Speaker 1: Yeah yeah, yeah, I know. But I mean, well, who's
• 1:15
  Speaker 1: is at the moment? I suppose that's the problem, isn't it.
• 1:19
  Speaker 1: So the surplus that's what we want to get to, right,
• 1:22
  Speaker 1: and this is why she's she's cut the operating allowance
• 1:24
  Speaker 1: because she wants to get that surplus by twenty twenty nine.
• 1:26
  Speaker 1: Is that not a laudable goal?
• 1:29
  Speaker 2: Well, it comes down to what are the choices she's
• 1:32
  Speaker 2: going to have to make to get to that surplus.
• 1:35
  Speaker 2: So again we've had concerns around productivity. We want to
• 1:40
  Speaker 2: make sure that they're smart investment. You know, it's really
• 1:44
  Speaker 2: clear and New Zealand does have a productivity issue in
• 1:47
  Speaker 2: some of those key areas like innovation, research and development.
• 1:50
  Speaker 2: That's we're smart governments clotally.
• 1:53
  Speaker 1: But we've had those problems for thirty years now, haven't we.
• 1:57
  Speaker 1: If we're looking at the here and now, surely the
• 1:59
  Speaker 1: bigger issue is the debt. You know, debt to GDP
• 2:03
  Speaker 1: is forty percent heading to forty five. It's twice what
• 2:06
  Speaker 1: it was pre COVID. Borrowing costs are going up. You know,
• 2:09
  Speaker 1: what do we do if we have an earthquake? What
• 2:10
  Speaker 1: do we do if there's a cyclone? You know, we've
• 2:12
  Speaker 1: got Trump and his terrace. We're a small trading nation.
• 2:15
  Speaker 1: When is a good time to get to surplus and
• 2:17
  Speaker 1: start paying down debt? Barbara?
• 2:20
  Speaker 2: Yeah, And the point is key that as long as
• 2:23
  Speaker 2: the economy is growing, your deet to GEDDP measure will fall.
• 2:28
  Speaker 2: So that's the really important part to it. You know,
• 2:30
  Speaker 2: labor had a surplus before we went into COVID in
• 2:33
  Speaker 2: twenty nineteen of seven billion dollars. And you're right, you
• 2:37
  Speaker 2: put the umbrella up when you need to when there's
• 2:40
  Speaker 2: a pandemic, when there was a cyclone, So it's making
• 2:43
  Speaker 2: sure you have that headroom.
• 2:44
  Speaker 1: Was there a little too much umbrella, do you think?
• 2:48
  Speaker 2: Well, we had to invest to keep people in jobs.
• 2:51
  Speaker 2: We had the lowest COVID mortality rate in the world.
• 2:55
  Speaker 2: You know, we had record low employment when Treasury was
• 2:57
  Speaker 2: forecasting economic But it.
• 2:59
  Speaker 1: Was all have to be paid for at some point,
• 3:01
  Speaker 1: which is what's happening now, isn't it. I mean, that's
• 3:03
  Speaker 1: the lesson we've learned, Barbara.
• 3:06
  Speaker 2: And that's the interesting thing is that actually we only
• 3:08
  Speaker 2: went into a recession last year. We were actually still
• 3:11
  Speaker 2: growing in the Treasury hang said that to.
• 3:14
  Speaker 1: Me, the Treasury chief economists. Sorry, so that again, the
• 3:18
  Speaker 1: Treasury chief economist told you that the growth that.
• 3:21
  Speaker 2: We had been growing, we still had actual marginal growth
• 3:25
  Speaker 2: post COVID And actually we only went into recession the
• 3:29
  Speaker 2: last three quarters of the last financial year.
• 3:31
  Speaker 1: Yeah, everybody knows that. But you're not saying that's just
• 3:33
  Speaker 1: because we had a national government, are you? No?
• 3:36
  Speaker 2: Always saying that this is where choices really matter.
• 3:39
  Speaker 1: But the choices houses.
• 3:41
  Speaker 2: You keep construction workers in jobs, you build homes, Governments
• 3:45
  Speaker 2: pulling back at a time when they should be investing.
• 3:48
  Speaker 1: But you guys went to Hundi, didn't you, And you
• 3:51
  Speaker 1: mentioned the fact we were growing, but inflation was through
• 3:54
  Speaker 1: the roof. We had to bring that under control. That's
• 3:57
  Speaker 1: what's happening.
• 3:57
  Speaker 2: Now And that goes to your earlier around the Reserve
• 4:01
  Speaker 2: Bank having to do a lot of that heavy lifting.
• 4:03
  Speaker 2: And they believe that they needed to hike interest rates
• 4:06
  Speaker 2: up to bring inflation down because that's their mandate. So
• 4:09
  Speaker 2: seeing that, asb the commentators are saying well, they think
• 4:12
  Speaker 2: interest rates are going to drop further. That's the Reserve
• 4:14
  Speaker 2: Bank doing.
• 4:15
  Speaker 1: Their job, all right. I really appreciate you coming on
• 4:17
  Speaker 1: the show as always, Barbara Edmonds, Labour's finance spokesperson. For
• 4:21
  Speaker 1: more from Early Edition with Ryan Bridge, listen live to
• 4:24
  Speaker 1: News Talks at B from five am weekdays, or follow
• 4:28
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