Latest / Best of Business / Brad Olsen: Infometrics Principal Economist on Winston Peters looking to restore Reserve Bank's dual mandate

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Brad Olsen: Infometrics Principal Economist on Winston Peters looking to restore Reserve Bank's dual mandate · Best of Business

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  Speaker 1: You're listening to a podcast from Newstalk zed B. Follow
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  Speaker 2: Whinston Peter says he's keen to restore the reserve banks
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  Speaker 2: dull mandate. That would mean not only inflation but also
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  Speaker 2: full employment. Remember those good old days. Getting rid of
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  Speaker 2: the employment stuff was a dead rat. He says he
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  Speaker 2: had to swallow as part of this coalition agreement, and
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  Speaker 2: he looked to bring it back as part of future
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  Speaker 2: coalition agreements. Brad Olson Infametric's principle Economists with Us tonight, Brad,
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  Speaker 2: Good evening, Good evening. Why so, in my mind, it
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  Speaker 2: doesn't really matter whether you have it on there or
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  Speaker 2: you don't have it on there. They're kind of doing
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  Speaker 2: both anyway, aren't they.
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  Speaker 3: Oh one and sent I mean, you've hit the nail
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  Speaker 3: on the head there. Economists time and time again have
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  Speaker 3: said there would be very little, if any noticeable difference
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  Speaker 3: to how the official cash rate was today compared to
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  Speaker 3: any other time if you had a jill mandate or
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  Speaker 3: a single mandate. The Reserve Bank is not done right.
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  Speaker 3: They're not looking at the economy and going well, if
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  Speaker 3: only we completely ignore the labor market. You can't ignore
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  Speaker 3: people in the economy and their jobs, and so realistically, no,
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  Speaker 3: we wouldn't expect any real change. The worry, though, is
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  Speaker 3: is that, like, why are we getting to an election
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  Speaker 3: year and seeing this sort of stuff reliitigated again. I mean,
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  Speaker 3: for someone that's apparently swallowed a dead rat, he's had
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  Speaker 3: a pretty calm stump on it for the last two
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  Speaker 3: years before it's come back up. The worry from our
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  Speaker 3: point of view, Ryan, as economists, is does the start
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  Speaker 3: to again undermine or start to raise questions about the
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  Speaker 3: politicization of the Reserve Bank And we just don't need
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  Speaker 3: that at the moment.
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  Speaker 2: Hey, speaking of politicization, what about your job with the
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  Speaker 2: Greens on the wealth tax. Did you see Thomas Colden's
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  Speaker 2: story from The Herald. He says spoken to one of
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  Speaker 2: the authors of the report that the Treasure Report that
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  Speaker 2: informed this policy, apparently part of it that you'd have
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  Speaker 2: up to well thirty eight almost forty percent of wealth
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  Speaker 2: flight from these super rich people that you want to tax,
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  Speaker 2: and you're the modeling the Greens did was twenty eight percent.
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  Speaker 3: What do you reckon? Well, actually, what that story also
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  Speaker 3: highlighted was that there's quite a big range there. I
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  Speaker 3: think you'll find that the original author said that, you know,
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  Speaker 3: treasury estimate of forty percent plus wasn't on the money,
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  Speaker 3: that his estimate was thirty eight percent. But yeah, the
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  Speaker 3: twenty eight and a half percent could be plausible. I mean,
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  Speaker 3: there's a lot of assumptions being undertaken here realistically, though.
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  Speaker 3: Look there are, yes, there's a pretty big, I guess
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  Speaker 3: range of different options. But this analysis was informed, yes,
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  Speaker 3: by the Treasury analysis, but also what came through overseas
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  Speaker 3: when we did our independent review of it. We weren't
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  Speaker 3: trying to make sure we got exactly the right number right,
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  Speaker 3: even Treasury can't do that when it models various tax changes.
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  Speaker 3: But we wanted to make sure the approach was as
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  Speaker 3: reasonable as possible based on the international evidence. It was.
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  Speaker 2: Okay, do you think it's a good policy.
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  Speaker 3: That's a different question, and that's one that I'm not
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  Speaker 3: going to answer. We've done the review. But I would
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  Speaker 3: say Ryan, what we want most genuinely is I'd rather
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  Speaker 3: a good, willing debase across everyone about the merits of
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  Speaker 3: these policies, rather than that sort of getting sucked in
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  Speaker 3: time and time again. You know, is the dollar figure
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  Speaker 3: exactly precisely right the minute? Anyone's that good?
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  Speaker 2: Quite important. It's quite important, isn't it. I mean because
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  Speaker 2: the economists and I hate to single you out here,
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  Speaker 2: but you go around and you get paid by a
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  Speaker 2: bunch of different companies or a bunch of different political
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  Speaker 2: parties to do these reports. And I know that you
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  Speaker 2: get your advocacy out and you do it properly. But
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  Speaker 2: as you have said at the very start of this interview,
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  Speaker 2: a lot of assumptions being made here, and it's money
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  Speaker 2: that comes from us, from taxpayers.
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  Speaker 3: Oh totally. But that's why you want to have the
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  Speaker 3: assumptions tested. I think you know clearly they have been.
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  Speaker 3: What's also clear, though, is that it's not like anyone's
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  Speaker 3: got you know, you know, the gospel speak on the
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  Speaker 3: right assumptions, and everyone else is wrong. Even the author
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  Speaker 3: of the report said that effectively, the treasury number isn't
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  Speaker 3: what they would have come up with themselves either. They're
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  Speaker 3: all a little bit different. Again, the assumptions are worthwhile
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  Speaker 3: being tested, but again the approach we took was reasonable.
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  Speaker 3: I'd also just highlight compared to a lot of the
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  Speaker 3: other numbers that seemed to have bandied about. I mean,
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  Speaker 3: do we remember when when Ston Peters came out and
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  Speaker 3: said he was going to sort of spend what was
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  Speaker 3: it like, ten bill on a bank and everyone else
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  Speaker 3: said it was going to be twenty bill. No one
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  Speaker 3: seemed to care about the assumptions that was based on
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  Speaker 3: one news article at the time.
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  Speaker 2: Yeah, Brad Olson and from interest to executive for us
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  Speaker 2: this evening.
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