Latest / The SME Stream / Steven Joyce: Former Finance Minister on the cuts to the OCR and the current state of the economy

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Steven Joyce: Former Finance Minister on the cuts to the OCR and the current state of the economy · The SME Stream

• 0:00
  Speaker 1: So fifty points. It was another fifty likely in February.
• 0:02
  Speaker 1: The forecast for growth have been cut. More jobs still
• 0:04
  Speaker 1: to be lost and that's the final word from the
• 0:06
  Speaker 1: Reserve Bank for the year. Former Finance Minister Steven Joyce
• 0:09
  Speaker 1: with us very.
• 0:09
  Speaker 2: Good morning morning, Mike.
• 0:11
  Speaker 1: Those growth trimmed forecasts. Some some's not right here. There's
• 0:15
  Speaker 1: a lot of cuts, and we're supposed to be fizzing.
• 0:16
  Speaker 1: We're not fizzing.
• 0:17
  Speaker 2: What's happening, thanks time. Unfortunately, you are seeing some green
• 0:23
  Speaker 2: shoots of growth from what I can see in areas
• 0:26
  Speaker 2: like commercial property not residential. You're seeing things and obviously
• 0:32
  Speaker 2: the dairy industry is starting to go Kiwi fruit's been solid.
• 0:38
  Speaker 2: Tech sector is pretty solid, but you know, big, big
• 0:41
  Speaker 2: employing industries like services and retail being flat as a pancake,
• 0:48
  Speaker 2: and of course residential property construction and so on, and
• 0:52
  Speaker 2: that's just going to take time. Unfortunately. You know, we're
• 0:54
  Speaker 2: dealing with a lot of hangover from our period that
• 1:00
  Speaker 2: goes right back to the beginnings of the pandemic. And frankly,
• 1:05
  Speaker 2: I would say a heavy footed governor who went really
• 1:09
  Speaker 2: hard early, then went really hard up and is now
• 1:12
  Speaker 2: coming out of the way and it's just for a
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  Speaker 2: lot of balance sheets that's just been too bloody hat.
• 1:16
  Speaker 1: He admitted that to a degree yesterday, not as much
• 1:19
  Speaker 1: as he should have, but he got there. He got
• 1:21
  Speaker 1: there in the end as finance minister. If you were
• 1:23
  Speaker 1: finance minister, would you have you wanted to have seen
• 1:25
  Speaker 1: seventy five? And do you listen to him with confidence?
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  Speaker 2: Well, if I was finance minister, of course i'd listened
• 1:33
  Speaker 2: to him confidence. Who's a Reserve bank governor? But I'm
• 1:35
  Speaker 2: not the finance minister's I can listen to a certain
• 1:37
  Speaker 2: amount of skeptism. The look, I truly don't think yesterday
• 1:43
  Speaker 2: is is sort of much either way. It's point five now.
• 1:47
  Speaker 2: Point five in February could have been point seventy five.
• 1:51
  Speaker 2: But in some ways that might have spooked more people
• 1:53
  Speaker 2: that have actually helped because they would have gone, oh,
• 1:56
  Speaker 2: you know, it's even worse than we thought. And the
• 1:59
  Speaker 2: real problem we've got right now, there's a whole lot
• 2:01
  Speaker 2: of people aren't spending because they're still not confident that
• 2:03
  Speaker 2: the that the pathway ahead for their businesses is solid enough.
• 2:09
  Speaker 2: The part of its confidence right now, if he really
• 2:13
  Speaker 2: wanted to know to sort of break them ald a
• 2:15
  Speaker 2: little bit. Then I would argue they should come should
• 2:17
  Speaker 2: have come back three weeks earlier at the end of
• 2:19
  Speaker 2: January and done something different there, just to show that
• 2:22
  Speaker 2: they were on the case. But I think that it's
• 2:25
  Speaker 2: probably not much of a muchness in the overall scheme
• 2:27
  Speaker 2: of things. It's going to come right to some degree
• 2:29
  Speaker 2: next year, but.
• 2:33
  Speaker 1: Not not as right as they thought it was. And see,
• 2:36
  Speaker 1: here's my consumer with the politics of it all. So
• 2:38
  Speaker 1: they Luxing and Co. Put out a press release two
• 2:40
  Speaker 1: and a half seconds after Adrian speaks, and it's almost
• 2:43
  Speaker 1: like they are now in cahoots, like they're desperately looking
• 2:46
  Speaker 1: for Adrian to be right for political purposes so they
• 2:49
  Speaker 1: can then go and sell this message to the public.
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  Speaker 1: And it's just it isn't there.
• 2:54
  Speaker 2: Well, we all want Adrian to be right in the
• 2:56
  Speaker 2: sense of helping get the economy game. But I think
• 2:58
  Speaker 2: probably for the government it's it's a case of having
• 3:01
  Speaker 2: to show even more urgency. And some of the things
• 3:03
  Speaker 2: that I've been working on, things like the electricity market,
• 3:08
  Speaker 2: which has a sting in the tail potentially next year
• 3:12
  Speaker 2: early next year, the banking sector, where probably the Reserve
• 3:17
  Speaker 2: Bank has got off pretty lightly so far in that context,
• 3:21
  Speaker 2: and the government has to form some strong views but
• 3:25
  Speaker 2: also attracting international investment. Quite a lot of talk so far,
• 3:27
  Speaker 2: not a lot of action. Those things are the sort
• 3:31
  Speaker 2: of things that need to move quickly to sort of
• 3:34
  Speaker 2: give more confidence, because it's confidence we're looking for in
• 3:37
  Speaker 2: the economy now. And as I say, there's some green
• 3:39
  Speaker 2: shroops appearing now, I don't want to be too doom
• 3:42
  Speaker 2: and gloom because there are you talk to some sectors
• 3:45
  Speaker 2: things are starting to move finally, but there's plenty of
• 3:48
  Speaker 2: sectors yet, and some of them have had structural changes
• 3:51
  Speaker 2: that are not going to go back. So retail has
• 3:53
  Speaker 2: had a structural change with all these international websites and
• 3:56
  Speaker 2: so and it's going to make life more difficult. But
• 3:59
  Speaker 2: I think the government's got to show probably going to
• 4:02
  Speaker 2: take five minutes off over Christmas and then show renewed
• 4:04
  Speaker 2: their urgency in the first half of next year. And frankly,
• 4:08
  Speaker 2: the governor should be reflecting on just how Hardy pushed
• 4:12
  Speaker 2: interest rates up, because these things have a lag and
• 4:17
  Speaker 2: he just went so hard for so long. In the
• 4:20
  Speaker 2: same way he went down so hard for so long
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  Speaker 2: that actually, you know, a lot of people's balance sheets
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  Speaker 2: are really really weak, and unfortunately that means the recovery
• 4:29
  Speaker 2: is slower and longer because they don't have the capacity
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  Speaker 2: to invest.
• 4:32
  Speaker 1: Very well said as always Stephen Joyce, former Finance Minister
• 4:35
  Speaker 1: with US