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Ryan Bridge: We need economic headroom · Early Edition with Ryan Bridge

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  Speaker 1: I've seen a lot of commentary in the last couple
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  Speaker 1: of days about our government's debt position. We're up over
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  Speaker 1: forty percent of GDP, doubled on pre COVID. You already
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  Speaker 1: know all of this, but there are those on the
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  Speaker 1: left who say that is way too little. Basically, we
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  Speaker 1: should borrow more. Forget about a debt selling, borrow more,
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  Speaker 1: throw it at the public service, create some jobs, any jobs,
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  Speaker 1: who cares, just get them out there, right And that's
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  Speaker 1: what Karne is doing in Canada right now. His budget
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  Speaker 1: would double the debt position, debt to GDP ratio. They've
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  Speaker 1: got Trump tariffs coming at them, they've got weak domestic demand.
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  Speaker 1: So he's basically getting out the defenb and he's trying
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  Speaker 1: to revive the economy and make no mistake, if a
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  Speaker 1: labor lead government were to get and that is exactly
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  Speaker 1: what they would be doing here, maybe not to the
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  Speaker 1: same extent. The problem is we don't know. Chris Hopkins
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  Speaker 1: has said, yeah, we need to invest more, yeah Knes
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  Speaker 1: in economics, et cetera, et cetera, but how much don't
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  Speaker 1: know to party Maldi and the Greens, you know, will
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  Speaker 1: make sure that they do more and spend the money
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  Speaker 1: on what that is the question. Now, remember Robertson had
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  Speaker 1: a debt ceiling thirty percent of GDP. Well, that didn't
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  Speaker 1: go very well. Didn't last very long, did it. The
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  Speaker 1: fact is, it's quite popular to spend money. It sounds
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  Speaker 1: like you're doing something. The more you spend, the more
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  Speaker 1: you care. That's the kind of prevalent theory, isn't it. Actually,
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  Speaker 1: if you look at average public debt, the ratio to
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  Speaker 1: GEDDP for big economies advanced economies, it's roughly one hundred
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  Speaker 1: and ten percent. So we are way under that. But
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  Speaker 1: we need to remember we're a small country. We're a
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  Speaker 1: trading country. We are exposed, and we're in the middle
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  Speaker 1: of a trade wall. It's not forget. What we need
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  Speaker 1: is headroom. Now. Morning Star, they've just given the government
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  Speaker 1: the triple A credit rating. They said as much. And
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  Speaker 1: as for those banks we've been talking about this week
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  Speaker 1: making massive profits and everyone's saying, oh, so evil, it's
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  Speaker 1: so nasty. Well, turns out in the same morning Star report,
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  Speaker 1: it's actually quite important that we have profitable banks. Morning
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  Speaker 1: Star says that we've weathered this housing market corrections so
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  Speaker 1: well because in part of well capitalized banks that are
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  Speaker 1: also very liquid that have strong buffers to absorb losses.
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  Speaker 1: So not all is as it seems. Bank profits and
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  Speaker 1: a seemingly stingy government insisting on returning the books to
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  Speaker 1: surplus not only keep our interest rates down, but also
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  Speaker 1: help keep us afloat. For more from early edition with
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  Speaker 1: Ryan Bridge. Listen live to News Talks at B from
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  Speaker 1: five am weekdays, or follow the podcast on iHeartRadio