Latest / Best of Business / Brad Olsen: Infometrics Principal Economist on the Government saving $1 billion after hitting housing targets early

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Brad Olsen: Infometrics Principal Economist on the Government saving $1 billion after hitting housing targets early · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks'd be follow
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  Speaker 2: Now we're getting a bit of a better idea about
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  Speaker 2: how Nikola Willis is going to fund her budget. Later
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  Speaker 2: this month, we learned that the government today will save
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  Speaker 2: one billion dollars over four years because it's hitting its
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  Speaker 2: housing target early. And then potentially more than ten billion
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  Speaker 2: dollars over four years will be saved from this pay
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  Speaker 2: equity system overhaul. Brad Olson's informetric senior Principal economist, Hey,
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  Speaker 2: Brad Good, evening, what do you make of these two savings?
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  Speaker 2: I mean, they're reasonably big, aren't.
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  Speaker 3: They very big? I feel like it's we're back to
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  Speaker 3: the future a little bit when you know we're starting
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  Speaker 3: to talk and billions of dollars again for just two
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  Speaker 3: line items. But again you know that they are quite
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  Speaker 3: substantial and I think also particularly when you look at
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  Speaker 3: the likes of the pay equity claims. The Minister's Cabinet
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  Speaker 3: paper highlights that already the settlements are costing government one
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  Speaker 3: point five to five billion dollars per year with a
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  Speaker 3: number of claims still in the system. That of course
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  Speaker 3: was going to go up, and so there is now
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  Speaker 3: quite a change. The Prime Minister has profiled billions of
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  Speaker 3: dollars of savings, although it's not abundantly clear right the
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  Speaker 3: second how big that number is the fact that we've
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  Speaker 3: got sort of such big savings. I think also goes
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  Speaker 3: into what we heard from the Finance Minister last week
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  Speaker 3: when the operating allowance was cut back, and that that
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  Speaker 3: operating allowance is a net figure. It's the total additional
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  Speaker 3: funding that the government can spend. It's not only just
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  Speaker 3: sort of a straight up edition though. It's a net figure.
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  Speaker 3: And so with the government now finding a number of
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  Speaker 3: additional savings across a few areas, across housing, now across
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  Speaker 3: pay equity, that does free up more funding for the
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  Speaker 3: government to do other things overall.
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  Speaker 2: Yeah, I mean, if we're talking about more than ten
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  Speaker 2: billion dollars in one line item over four years, and
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  Speaker 2: a billion dollars and another line item, that makes that
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  Speaker 2: one point three billion dollars in the operating allowance suddenly
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  Speaker 2: make a little bit more sense, doesn't it.
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  Speaker 3: It certainly gives the government more options going forward. I mean,
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  Speaker 3: for the likes of the pay settlements, again, I don't
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  Speaker 3: think they would have necessarily have been booked to have
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  Speaker 3: started all of them immediately at once, But obviously with
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  Speaker 3: some of the numbers that are being thrown about and
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  Speaker 3: without any real detail there that the cabinet paper is
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  Speaker 3: not surprisingly silent on the dollar figures. Those have been
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  Speaker 3: fairly well reducted as budget sensitive, but again they do
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  Speaker 3: there are big changes that will happen over time, and
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  Speaker 3: given that the government does have very limited funding room
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  Speaker 3: and has a lot of stuff that they want to
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  Speaker 3: be able to spend on, this does look like it
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  Speaker 3: is all part of trying to make the numbers work
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  Speaker 3: and what is a difficult set of circumstances. The economic
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  Speaker 3: figures have been more challenging. Treasury is likely to downgrade
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  Speaker 3: economic expectations going forward. That means less revenue for the
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  Speaker 3: government and so that does require money to come from
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  Speaker 3: somewhere else to allow all of the big expectations to
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  Speaker 3: still be funded.
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  Speaker 2: Yes, now, what about the employment stats there are tomorrow?
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  Speaker 2: What are you expecting?
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  Speaker 3: We do expect that unemployment will be increased. Seeing further,
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  Speaker 3: I think the broadn census is around sort of five
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  Speaker 3: point three percent. That is the highest and nearly a
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  Speaker 3: decade and obviously I think highlights what everyone's seeing out
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  Speaker 3: there that times are still quite tough. People are struggling
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  Speaker 3: to find jobs, and we saw that with some of
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  Speaker 3: the filled jobs data out over the last week as well.
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  Speaker 3: Even those increases to the unemployment rate and similar they
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  Speaker 3: make government's life harder as well. From a financial perspective,
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  Speaker 3: the number of people on jobs, he can benefits and
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  Speaker 3: similar continues to increase, and so all of those are
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  Speaker 3: further cost that the government has to pay for. So
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  Speaker 3: we are in a very difficult time in the economy.
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  Speaker 3: We're of course being hit with the uncertainty from the tariffs.
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  Speaker 3: We're starting to see some other areas of the economy
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  Speaker 3: still show some promise the primary sector and similar. Mortgage
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  Speaker 3: rates are falling for a number of households, but there's
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  Speaker 3: still a level of concern I think amongst households because
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  Speaker 3: the jobs market is not quite as easy, and you
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  Speaker 3: see that with consumer confidence. Despite the fact that interest
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  Speaker 3: rates are coming down in still living challenges should be
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  Speaker 3: easier for households. The numbers still suggest that households are
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  Speaker 3: still pretty reluctant to be too optimistic. So a lot
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  Speaker 3: of challenges out there the government's facing fiscal challenges. Households
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  Speaker 3: are still facing financial challenges, difficult, challenging conditions all round.
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  Speaker 2: Yeah, Brad, thanks very much, really appreciate it. Brad Awsome,
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  Speaker 2: Principal economist at Infometrics.
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