May 24, 2026 • 17 mins
Finance Minister Nicola Willis will be presenting the 2026 budget on this coming Thursday.
A number of pre-budget announcements have already been made including money directed to maths and literary in schools and maritime security, while social housing and the public sector have faced budget cuts.
Founder of Bagrie Economics, Cameron Bagrie, spoke to Tim Beveridge about what he expects and what he thinks should be done.
One change Bagrie believes is unpopular but crucial is reforming NZ Super saying 'the current system is unsustainable'.
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Episode Transcript
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Speaker 1 (00:05):
You're listening to the Weekend collective podcast from News Talks,
i'd be Politics Central.
Speaker 2 (00:12):
Yes, and if you've even had one peek at the
news this week, you'll know that the budget is coming
up and a number of there been a number of
pre budget announcements that have already been made, including money
to maths and literacy and schools, maritime security, while social
housing and the public sector have drawn Perhaps you might
(00:32):
argue in the short straw on that one. Anyway, I
thought it'd be about time to get ahead of it
all and we'll have a chat with Cameron Baggery about
his thoughts from Baggriy Economics.
Speaker 3 (00:41):
Cameron, good afternoon, Good afternoon.
Speaker 2 (00:44):
How many budgets have you borne witnessed to in your
professional career?
Speaker 3 (00:49):
I started a treasoningly about nineteen ninety five and ninety
ninety circle the things go and be come awful long time. Now?
Speaker 2 (00:56):
Is the anticipation always the same order? How would you
put the anticipation for this one? And sort of just
in a bit of context history wise.
Speaker 3 (01:06):
Well, I guess every budget is normally a competition between
contrasting things. Everybody wants more lollies from the lollygejar, so
there's always an intense pressure to do that. The next thing,
there's always a normal string of pre budget announcements, which
once again we've seen this year, and then you got
the other side of the corner. You want to be
(01:27):
physically responsible, and when you're fysically responsible, you've got to
limit the number of lollies that you're dispensing from the
lot of jar. We know in regard to this one
is that there's not too many lollies in the lollige
are to dispense. So we've seen a string of announcements
that have not exactly been positive in regard to as
money there's going to be pumped into this, that and
(01:47):
the next thing, a lot of money is going to
be coming out very porphist.
Speaker 2 (01:52):
What do you make of the pre budget announcements? Has
nichol and Willis sort of dealt with some of the
tricky stuff early so she can maybe hand out a
lolly or two, always some lollies.
Speaker 3 (02:01):
Yeah, there's been no real announcements in regard to health
and health will chew up. I suspect the line's share
of the two point one billion operating allowance here. Typically
you'd expect you else to get your seven eight hundred
million of that, and then it's a question of making
the numbers sort of add up from there, because what
they're going to be doing is, obviously they've got two
point one billion to allocate an operational expenditure. You can
(02:23):
make that number largely larger if you're reportializing, you're canceling
some programs and reprioritalizing. On the other side, what we're
going to get in the budget is it what's been
the what's the degree of the cancelations, because that will
make the operating allowance what's available a bigger number for
two point than two point one billion. But of course
you've got to find the money from somewhere, So hence
(02:44):
Peter versus port, someone loses out.
Speaker 2 (02:47):
Is there going to be talking about growth or is
it mainly about getting debt now spending under control?
Speaker 3 (02:53):
What's a combination? You know, the government would like to
be in a better position, but they're not in a
great position at the moment because they still it's called
a structural or underlying operating deficit. Your debt is still
moving up. The economy was supposed to be back on
track for twenty and twenty six. The signs were looking
(03:16):
pretty good. Well, we just got knocked off State High one.
We're on a bit of a goat track the next
sort of three to six months as we sit there
and watch what's going on in Hamuz, so we're going
to see you are bad. I think Q two GDP
number in about three months will work through that on
the other side. But the bottom line that any finance
minister economic growth is the money line. Because if you're
(03:38):
getting economic growth, you're getting text revenue coming in the door.
Tax revenue comes in the door. It makes your spenning
decisions or where you put the money, and an awful
lot easier the bottom line at the moment, and this
has been going on for the past a few years.
You know, the Finance Minister has had a series of
growth downgrades. And it's not just because of what's called
the economic cycle where the economy is going to be
(04:00):
in twelve months. It's because we're seeing a structural trend
and productivity growth that sort of defines where the economy
can grow on average over a five year pering. And
what that is doing is that that is just hitting
the money line for the finance money stuff. So they're
hence there isn't too many. The kid is largely empty.
Speaker 2 (04:16):
How heavily does the election date bear on what can
realistically be achieved or announced or aspired to in this budget.
Speaker 3 (04:29):
Well, the government at the moment is caught between what
we call them is the impossible trinity and the impossible
trinity is you get your one goal is that you
will need to show that you're physically responsible. You need
to show that you go from deaths at the surface.
You've been in that curve back down. Of course, two
rating agencies who've got New Zealand on a negative outlook,
(04:50):
so you need to be mindful of that. The second
part of the impossible trinity is infrastructure. You've got to
be invested in schools, hospitals, you've got to be investing them,
loading network you know, you've got to keep investing and
you Zion's productive future. And the third priority is called
government services. Now, in my view, it's mathematically possible to
(05:13):
hit two out of three and it's against the Government
has already sort of declared which two you're going after.
Your physical credibility i e. Making sure they get back
to surplus and infrastructure. What's within this budget is going
to be called government service.
Speaker 2 (05:27):
Oh, they would probably argue that by two and three
they're doing one which is physically responsible responsible.
Speaker 3 (05:34):
Well, what we under thought, Yeah, if you look at
this budget and when we see these string of announcements
where they're going to take out about eight and a
half thousand called government servants, is that feasible potentially? Would
I say it's highly probable. The answer is known a
bit of English. When he was in charge, managed to
keep core government that the head camp, yes, stable about
(05:59):
one percent of GDP. It didn't manage to shrink it.
We've got it up to one point two percent. If
you go back to about the year two thousand, that
numbers around zero point seven zero point eight percent. It's
been a rising trend over a long time. And this
is what happens when you need get more pressure for
the government to be doing more. And of course this
is not just about economics. This is about social balance
(06:22):
and of course it's also about an election and you
keep getting back into power.
Speaker 2 (06:25):
Do you support that the cuts are a good goal
or what's your take on it?
Speaker 3 (06:33):
Well, we'll not have to look at some government departments
such as your Ministry of Business, Innovation and Employment, your
there heat count's gone from about three thousand that got
up to close to six thousand people. So you look
at that surge over a number of years and it
sort of defies belief in regard to what's going on there.
So do I think there's been a bit of fact
that's been brought into the system. The answer is us.
(06:55):
The issue is that it's a fine line between taking
out fat versus cutting into muscle. And if you look
at what's taking place, we're seeing a big surge across
an awful lot of government departments and Ministry of Education
is another one. But if you have a look at
what we're also seeing within the education arena, you can't
just education is no longer just about teachers. We've let
(07:17):
society's evils incroaching the classroom and this is homelessness, this
is your income and equality of that sort of stuff.
So the Ministry Education, via a lot of your support mechanisms,
is packing up ancillary where the teachers that are not
just equipped to deal with and that's some of the
sort of stuff that that's hard because you look at
the headcount numbers and you think that is just nuts.
(07:37):
What's been going on with the lots of Ministry of Education.
But then you look at what they're dealing with nowadays
compared to what they were dealing with ten to fifteen
years ago, and you sort of think, well, as we do,
if they do be more in that area. But the
fact versus muscle that's going to be the defining issue here.
The government's obviously pretty strong in AI digitization. They need
to be. The OECD had a chapter in a recent
(08:00):
economic survey a u Z I'm telling us to embrace
AI digitization you get on top of healthcare the problem,
you know, I look at that sort of stuff a
little bit suspiciously because there's not too many IT projects
that have been government run that have gone exactly very
well in the past twenty years.
Speaker 2 (08:18):
No, look, if nikol Little didn't if she didn't care
about getting re elected, what would she? I mean, this
is all speculative stuff. I know we're a weak ahead
of it, but is there anything that comes to mind
that a finance minister would do if they just didn't
care about being reelected. Because it's the right thing to do,
but it'll not.
Speaker 3 (08:34):
Popular fiscal cost of an aging population, particularly easy on
superannuation universal entitlement. The numbers have been very clear for
thirty or forty years the current system is unsustainable. You
can't have help and superannuation expenditure rising as a sharer GDP,
or you can as long as society is prepared to
(08:55):
pay for that through high taxes or punching expenditure on
the other side. Year. What we've seen decade after the
decade is that political parties keep ticking the can on
the road and not prepared to address the fiscal cost
of an aging population. And it is very clear we
need to have some sort of means testing mechanism. We
need the age of entitlement to go up to sixty
(09:18):
seven and they're more likely sixty eight sixty nine. Is
that going to be in the budget this time around?
The answer is no. It's really interesting when you have
a look at what the government has been ditioning out
so far. There's been a few what we call sort
of tough love messages where no, you're not entitled to that,
And then I overlook at some other areas and can
(09:39):
someone explain to me why the winter energy payment is
universal to everybody and that costs five hundred and fifty
million dollars. So we're getting out there at the moment
and we'll ratten some portion into society. It needs to
be targeted, it needs to be selected. But then on
the other side of the coin, we give everybody a
universal winter energy payment. It doesn't make any sense.
Speaker 2 (09:57):
God, I tell you what, I think you've nailed a
two or three of those issues. I don't think i've
heard someone who's explained so sort of clearly the problems
that education's got because, as you say that, the ills
of society in the classroom. Now, but what is this budget?
Is it going to be more? I mean, how do
they manage the perception of it? Because you know, you
get what gets announced and you get what gets reported
(10:19):
in people's reaction to it. How much of this budget
simply about trying to shift people's perceptions that it's not
also doom and gloom because just from the talkback world,
it generally feels that everyone thinks things are a bit
crap out there right now? What's your take on the
perception of people now important that place in the role?
Speaker 3 (10:37):
Well, things are tough, and it's not just tearing yourself.
It's in a lot of countries around the clot and
the reason things are tough, there's two big targets here.
You see, Look, one, we've obviously got a cost a
live crisis. It doesn't matter with you god rates, electricity,
or a whole lot of other things. You're going up.
(10:57):
And inflation is ruthless because it siphens money out of
people's pockets. And we have seen persistent inflation there since
twenty twenty, whereas if you look at the decade prior
to twenty twenty, we were lucky if inflation was two percent. Now,
the real story here that we do not have a
cost of living crisis. The real crisis we've got is
(11:18):
an income crisis. In New Zealand is a low wage
economy while we're a low wage economy because we're a
low productive economy. See, you want to make a whole
lot of things go away or get faxed. We can't
just focus on the cost of living it and know
things are hurting out to the end we're seeing with all
the surveys. But that's camouflage. And the real issue is
that we have an income crisis across this economy and
(11:39):
that is a function of weak productivity growth. And the
government can do so much in regard to that because
they control an awful lot of parameters, but often to
the private sector needs to lift your game as well.
Speaker 2 (11:52):
So will the finance mins to be looking to do
something to sort of signal to the private sector that
you know, there's a way ahead and with growth.
Speaker 3 (12:01):
Well, the government's trying to provide a little bit of
certainty clarity obviously. Yeah, it's pretty tough within the global
environment at the moment because that's beyond this government's control.
The Finance Minister and the Prime Minister have now realized
that it's now a world where power is trumping rules.
(12:21):
It's a different world order. Well, we've been talking about
that sort of stuff for three to five years, so
it's nothing new in regard to what's going on. We've
just got to deal with it. But ultimately a lot
of the heavy lifting here and needs to be done
by the private sector. Now. One of the things that
worries may across and yonder is that there's this straight
sense of sort of self entitlement. Every time we've got
(12:42):
a problem, we just expect the local government or the
central government to fix it. You know. That's if we
think they can be supporting actors and Jones growth story.
But I don't think they're going to lead the charge. Ultimately,
the people need to lead the charge of the private sector. Why,
because it's their money. You've got skin of the down.
When you've got real skin in the game, you're going
(13:04):
to take and manage a lot more effectively than if
it's what's called other people's money. And local government and
central government deal with other people's money.
Speaker 2 (13:11):
Is that almost a problem that we've got as New
Zealanders is we have problems and we know, as you say,
you know what's coming into the bank account what's going out.
We notice the difference, and we expect the government to
fix it. Is that one of the major sort of problems.
It almost feels like an I don't want to say
an immaturity, but it's sort of a simplistic way of thinking,
you know, Nichola is going to solve our problems, when
in fact, you know, she's just a part of the equation.
Speaker 3 (13:35):
Yeah. Well, well, I guess if I set back and
have a look at what we're seeing at the moment,
is that there's a lot of tension between sort of
near to imperatives. What's the need to imperatives get on
top of inflation because society doesn't like inflation. Then you've
got long term imperatives such as sustainability, climate change, AI, digitalization,
(13:55):
managing the fiscal cost of an aging population. You got
these structural trends that are ships that are going on
around the globe. You've got the TENSI between the United
States and Chin and you ze one court in the
medical trying to play Switzerland. And then what you got
in between that is you got politics. And politics is
always going to be political, it always acts. But what
(14:17):
we're seeing at the moment globally is political futuring where
we're seeing more movement to the far left. For the
far right, it's driving division, and what we're seeing is
a lot more popularism style politics, the praise to the pliphery.
The problem is if you're on business, you just want stabuilding.
You sort of know, I want to know where we're
(14:37):
going to be from the election cycle to election cycle.
You have a look at what we're seeing in America,
what we're seeing in the UK, Australia one Nation, what
we're seeing here in New Zealand as well. You're the
twenty twenty three election, the National and the Labor gaven
can buy and got sixty five percent of the vote.
That means the rest got thirty five. Now that gives
the rest real political power and muscle. And that's the
(15:02):
global trend in regards to what we're seeing at the
moment and what it does as a drive populism politics
turn away.
Speaker 2 (15:07):
The hardest thing, although it sounds like the imperative thing
is that Nicola Willis sort of needs to drive the
middle ground.
Speaker 3 (15:14):
Well, it doesn't just need to be Nichola Willis. Yeah,
you've got other political parties. Of course, really interesting to
see how the Opportunity's Party goes this election if they
get across the five percent or yeah, that they're they're
starting to nudge up any sentralest. Okay, they've got left
leaning US, but they're palatable left leaning news. Yes, they
(15:36):
recognize importance of this what's called the economic base. Well
being needs an economic base. The problem is with politics
is that we go to the far left and the
far right, which is typically you look at the social
meagia versus the economic legion, and we spend from two
to five without sort of realizing that both of them
are self reinforcing. And that's to be the centralest part
of the political sphere sort of tries to link those two.
Speaker 2 (15:58):
Do you expect any surprises.
Speaker 3 (16:01):
I think there will be a couple of surprises, just to.
Speaker 2 (16:04):
Grab the headline. It's like a farmac announcement for some
medicine that people have been dying for treatment for or
what are you.
Speaker 3 (16:10):
Yeah, well, yeah, and odds are that will be in
the health arena or most certainly in the cost of
living arena. Yeah, there's an area where I think the
government needs to get on top of very sharply. It's
electricity prices. The electricity prices are moving up about what
ten twelve percent per year. It is not sustainable. It
(16:31):
is crippling for households. So I think if there's going
to be anything really big that she had to come,
I keep an eye on the energy seat the electricity.
Do you go into the lock up, I'll be there
for the free or ours.
Speaker 2 (16:46):
Oh well, hopefully they look after you with the catering. Hey, Cameron,
I really appreciate your time this afternoon. Thanks so much.
Speaker 3 (16:52):
All the best.
Speaker 2 (16:53):
There we go. That is Cameron Bagory. I got to
say he is bloody good Cameron. You know the economics
wise and budgets. There are a few things he's I
tried to sort of note them down as I went,
but you know, I think I don't know just the
summary of the issues for the average New Zealander listening.
(17:14):
I just think that that was an excellent given that
we haven't got any really meet to pick over apart
from the pre budget announcements, just to get Cameron's thoughts on,
you know, what the government can do, should do, and
the problems we're facing. I thought there was just ten
out of ten from him. Not that he needs my praise,
but I particularly enjoyed it.
Speaker 1 (17:33):
For more from the Weekend Collective, listen live to News
Talks it'd be weekends from three pm, or follow the
podcast on iHeartRadio.
You're listening to the Weekend collective podcast from News Talks,
i'd be Politics Central.
Speaker 2 (00:12):
Yes, and if you've even had one peek at the
news this week, you'll know that the budget is coming
up and a number of there been a number of
pre budget announcements that have already been made, including money
to maths and literacy and schools, maritime security, while social
housing and the public sector have drawn Perhaps you might
(00:32):
argue in the short straw on that one. Anyway, I
thought it'd be about time to get ahead of it
all and we'll have a chat with Cameron Baggery about
his thoughts from Baggriy Economics.
Speaker 3 (00:41):
Cameron, good afternoon, Good afternoon.
Speaker 2 (00:44):
How many budgets have you borne witnessed to in your
professional career?
Speaker 3 (00:49):
I started a treasoningly about nineteen ninety five and ninety
ninety circle the things go and be come awful long time. Now?
Speaker 2 (00:56):
Is the anticipation always the same order? How would you
put the anticipation for this one? And sort of just
in a bit of context history wise.
Speaker 3 (01:06):
Well, I guess every budget is normally a competition between
contrasting things. Everybody wants more lollies from the lollygejar, so
there's always an intense pressure to do that. The next thing,
there's always a normal string of pre budget announcements, which
once again we've seen this year, and then you got
the other side of the corner. You want to be
(01:27):
physically responsible, and when you're fysically responsible, you've got to
limit the number of lollies that you're dispensing from the
lot of jar. We know in regard to this one
is that there's not too many lollies in the lollige
are to dispense. So we've seen a string of announcements
that have not exactly been positive in regard to as
money there's going to be pumped into this, that and
(01:47):
the next thing, a lot of money is going to
be coming out very porphist.
Speaker 2 (01:52):
What do you make of the pre budget announcements? Has
nichol and Willis sort of dealt with some of the
tricky stuff early so she can maybe hand out a
lolly or two, always some lollies.
Speaker 3 (02:01):
Yeah, there's been no real announcements in regard to health
and health will chew up. I suspect the line's share
of the two point one billion operating allowance here. Typically
you'd expect you else to get your seven eight hundred
million of that, and then it's a question of making
the numbers sort of add up from there, because what
they're going to be doing is, obviously they've got two
point one billion to allocate an operational expenditure. You can
(02:23):
make that number largely larger if you're reportializing, you're canceling
some programs and reprioritalizing. On the other side, what we're
going to get in the budget is it what's been
the what's the degree of the cancelations, because that will
make the operating allowance what's available a bigger number for
two point than two point one billion. But of course
you've got to find the money from somewhere, So hence
(02:44):
Peter versus port, someone loses out.
Speaker 2 (02:47):
Is there going to be talking about growth or is
it mainly about getting debt now spending under control?
Speaker 3 (02:53):
What's a combination? You know, the government would like to
be in a better position, but they're not in a
great position at the moment because they still it's called
a structural or underlying operating deficit. Your debt is still
moving up. The economy was supposed to be back on
track for twenty and twenty six. The signs were looking
(03:16):
pretty good. Well, we just got knocked off State High one.
We're on a bit of a goat track the next
sort of three to six months as we sit there
and watch what's going on in Hamuz, so we're going
to see you are bad. I think Q two GDP
number in about three months will work through that on
the other side. But the bottom line that any finance
minister economic growth is the money line. Because if you're
(03:38):
getting economic growth, you're getting text revenue coming in the door.
Tax revenue comes in the door. It makes your spenning
decisions or where you put the money, and an awful
lot easier the bottom line at the moment, and this
has been going on for the past a few years.
You know, the Finance Minister has had a series of
growth downgrades. And it's not just because of what's called
the economic cycle where the economy is going to be
(04:00):
in twelve months. It's because we're seeing a structural trend
and productivity growth that sort of defines where the economy
can grow on average over a five year pering. And
what that is doing is that that is just hitting
the money line for the finance money stuff. So they're
hence there isn't too many. The kid is largely empty.
Speaker 2 (04:16):
How heavily does the election date bear on what can
realistically be achieved or announced or aspired to in this budget.
Speaker 3 (04:29):
Well, the government at the moment is caught between what
we call them is the impossible trinity and the impossible
trinity is you get your one goal is that you
will need to show that you're physically responsible. You need
to show that you go from deaths at the surface.
You've been in that curve back down. Of course, two
rating agencies who've got New Zealand on a negative outlook,
(04:50):
so you need to be mindful of that. The second
part of the impossible trinity is infrastructure. You've got to
be invested in schools, hospitals, you've got to be investing them,
loading network you know, you've got to keep investing and
you Zion's productive future. And the third priority is called
government services. Now, in my view, it's mathematically possible to
(05:13):
hit two out of three and it's against the Government
has already sort of declared which two you're going after.
Your physical credibility i e. Making sure they get back
to surplus and infrastructure. What's within this budget is going
to be called government service.
Speaker 2 (05:27):
Oh, they would probably argue that by two and three
they're doing one which is physically responsible responsible.
Speaker 3 (05:34):
Well, what we under thought, Yeah, if you look at
this budget and when we see these string of announcements
where they're going to take out about eight and a
half thousand called government servants, is that feasible potentially? Would
I say it's highly probable. The answer is known a
bit of English. When he was in charge, managed to
keep core government that the head camp, yes, stable about
(05:59):
one percent of GDP. It didn't manage to shrink it.
We've got it up to one point two percent. If
you go back to about the year two thousand, that
numbers around zero point seven zero point eight percent. It's
been a rising trend over a long time. And this
is what happens when you need get more pressure for
the government to be doing more. And of course this
is not just about economics. This is about social balance
(06:22):
and of course it's also about an election and you
keep getting back into power.
Speaker 2 (06:25):
Do you support that the cuts are a good goal
or what's your take on it?
Speaker 3 (06:33):
Well, we'll not have to look at some government departments
such as your Ministry of Business, Innovation and Employment, your
there heat count's gone from about three thousand that got
up to close to six thousand people. So you look
at that surge over a number of years and it
sort of defies belief in regard to what's going on there.
So do I think there's been a bit of fact
that's been brought into the system. The answer is us.
(06:55):
The issue is that it's a fine line between taking
out fat versus cutting into muscle. And if you look
at what's taking place, we're seeing a big surge across
an awful lot of government departments and Ministry of Education
is another one. But if you have a look at
what we're also seeing within the education arena, you can't
just education is no longer just about teachers. We've let
(07:17):
society's evils incroaching the classroom and this is homelessness, this
is your income and equality of that sort of stuff.
So the Ministry Education, via a lot of your support mechanisms,
is packing up ancillary where the teachers that are not
just equipped to deal with and that's some of the
sort of stuff that that's hard because you look at
the headcount numbers and you think that is just nuts.
(07:37):
What's been going on with the lots of Ministry of Education.
But then you look at what they're dealing with nowadays
compared to what they were dealing with ten to fifteen
years ago, and you sort of think, well, as we do,
if they do be more in that area. But the
fact versus muscle that's going to be the defining issue here.
The government's obviously pretty strong in AI digitization. They need
to be. The OECD had a chapter in a recent
(08:00):
economic survey a u Z I'm telling us to embrace
AI digitization you get on top of healthcare the problem,
you know, I look at that sort of stuff a
little bit suspiciously because there's not too many IT projects
that have been government run that have gone exactly very
well in the past twenty years.
Speaker 2 (08:18):
No, look, if nikol Little didn't if she didn't care
about getting re elected, what would she? I mean, this
is all speculative stuff. I know we're a weak ahead
of it, but is there anything that comes to mind
that a finance minister would do if they just didn't
care about being reelected. Because it's the right thing to do,
but it'll not.
Speaker 3 (08:34):
Popular fiscal cost of an aging population, particularly easy on
superannuation universal entitlement. The numbers have been very clear for
thirty or forty years the current system is unsustainable. You
can't have help and superannuation expenditure rising as a sharer GDP,
or you can as long as society is prepared to
(08:55):
pay for that through high taxes or punching expenditure on
the other side. Year. What we've seen decade after the
decade is that political parties keep ticking the can on
the road and not prepared to address the fiscal cost
of an aging population. And it is very clear we
need to have some sort of means testing mechanism. We
need the age of entitlement to go up to sixty
(09:18):
seven and they're more likely sixty eight sixty nine. Is
that going to be in the budget this time around?
The answer is no. It's really interesting when you have
a look at what the government has been ditioning out
so far. There's been a few what we call sort
of tough love messages where no, you're not entitled to that,
And then I overlook at some other areas and can
(09:39):
someone explain to me why the winter energy payment is
universal to everybody and that costs five hundred and fifty
million dollars. So we're getting out there at the moment
and we'll ratten some portion into society. It needs to
be targeted, it needs to be selected. But then on
the other side of the coin, we give everybody a
universal winter energy payment. It doesn't make any sense.
Speaker 2 (09:57):
God, I tell you what, I think you've nailed a
two or three of those issues. I don't think i've
heard someone who's explained so sort of clearly the problems
that education's got because, as you say that, the ills
of society in the classroom. Now, but what is this budget?
Is it going to be more? I mean, how do
they manage the perception of it? Because you know, you
get what gets announced and you get what gets reported
(10:19):
in people's reaction to it. How much of this budget
simply about trying to shift people's perceptions that it's not
also doom and gloom because just from the talkback world,
it generally feels that everyone thinks things are a bit
crap out there right now? What's your take on the
perception of people now important that place in the role?
Speaker 3 (10:37):
Well, things are tough, and it's not just tearing yourself.
It's in a lot of countries around the clot and
the reason things are tough, there's two big targets here.
You see, Look, one, we've obviously got a cost a
live crisis. It doesn't matter with you god rates, electricity,
or a whole lot of other things. You're going up.
(10:57):
And inflation is ruthless because it siphens money out of
people's pockets. And we have seen persistent inflation there since
twenty twenty, whereas if you look at the decade prior
to twenty twenty, we were lucky if inflation was two percent. Now,
the real story here that we do not have a
cost of living crisis. The real crisis we've got is
(11:18):
an income crisis. In New Zealand is a low wage
economy while we're a low wage economy because we're a
low productive economy. See, you want to make a whole
lot of things go away or get faxed. We can't
just focus on the cost of living it and know
things are hurting out to the end we're seeing with all
the surveys. But that's camouflage. And the real issue is
that we have an income crisis across this economy and
(11:39):
that is a function of weak productivity growth. And the
government can do so much in regard to that because
they control an awful lot of parameters, but often to
the private sector needs to lift your game as well.
Speaker 2 (11:52):
So will the finance mins to be looking to do
something to sort of signal to the private sector that
you know, there's a way ahead and with growth.
Speaker 3 (12:01):
Well, the government's trying to provide a little bit of
certainty clarity obviously. Yeah, it's pretty tough within the global
environment at the moment because that's beyond this government's control.
The Finance Minister and the Prime Minister have now realized
that it's now a world where power is trumping rules.
(12:21):
It's a different world order. Well, we've been talking about
that sort of stuff for three to five years, so
it's nothing new in regard to what's going on. We've
just got to deal with it. But ultimately a lot
of the heavy lifting here and needs to be done
by the private sector. Now. One of the things that
worries may across and yonder is that there's this straight
sense of sort of self entitlement. Every time we've got
(12:42):
a problem, we just expect the local government or the
central government to fix it. You know. That's if we
think they can be supporting actors and Jones growth story.
But I don't think they're going to lead the charge. Ultimately,
the people need to lead the charge of the private sector. Why,
because it's their money. You've got skin of the down.
When you've got real skin in the game, you're going
(13:04):
to take and manage a lot more effectively than if
it's what's called other people's money. And local government and
central government deal with other people's money.
Speaker 2 (13:11):
Is that almost a problem that we've got as New
Zealanders is we have problems and we know, as you say,
you know what's coming into the bank account what's going out.
We notice the difference, and we expect the government to
fix it. Is that one of the major sort of problems.
It almost feels like an I don't want to say
an immaturity, but it's sort of a simplistic way of thinking,
you know, Nichola is going to solve our problems, when
in fact, you know, she's just a part of the equation.
Speaker 3 (13:35):
Yeah. Well, well, I guess if I set back and
have a look at what we're seeing at the moment,
is that there's a lot of tension between sort of
near to imperatives. What's the need to imperatives get on
top of inflation because society doesn't like inflation. Then you've
got long term imperatives such as sustainability, climate change, AI, digitalization,
(13:55):
managing the fiscal cost of an aging population. You got
these structural trends that are ships that are going on
around the globe. You've got the TENSI between the United
States and Chin and you ze one court in the
medical trying to play Switzerland. And then what you got
in between that is you got politics. And politics is
always going to be political, it always acts. But what
(14:17):
we're seeing at the moment globally is political futuring where
we're seeing more movement to the far left. For the
far right, it's driving division, and what we're seeing is
a lot more popularism style politics, the praise to the pliphery.
The problem is if you're on business, you just want stabuilding.
You sort of know, I want to know where we're
(14:37):
going to be from the election cycle to election cycle.
You have a look at what we're seeing in America,
what we're seeing in the UK, Australia one Nation, what
we're seeing here in New Zealand as well. You're the
twenty twenty three election, the National and the Labor gaven
can buy and got sixty five percent of the vote.
That means the rest got thirty five. Now that gives
the rest real political power and muscle. And that's the
(15:02):
global trend in regards to what we're seeing at the
moment and what it does as a drive populism politics
turn away.
Speaker 2 (15:07):
The hardest thing, although it sounds like the imperative thing
is that Nicola Willis sort of needs to drive the
middle ground.
Speaker 3 (15:14):
Well, it doesn't just need to be Nichola Willis. Yeah,
you've got other political parties. Of course, really interesting to
see how the Opportunity's Party goes this election if they
get across the five percent or yeah, that they're they're
starting to nudge up any sentralest. Okay, they've got left
leaning US, but they're palatable left leaning news. Yes, they
(15:36):
recognize importance of this what's called the economic base. Well
being needs an economic base. The problem is with politics
is that we go to the far left and the
far right, which is typically you look at the social
meagia versus the economic legion, and we spend from two
to five without sort of realizing that both of them
are self reinforcing. And that's to be the centralest part
of the political sphere sort of tries to link those two.
Speaker 2 (15:58):
Do you expect any surprises.
Speaker 3 (16:01):
I think there will be a couple of surprises, just to.
Speaker 2 (16:04):
Grab the headline. It's like a farmac announcement for some
medicine that people have been dying for treatment for or
what are you.
Speaker 3 (16:10):
Yeah, well, yeah, and odds are that will be in
the health arena or most certainly in the cost of
living arena. Yeah, there's an area where I think the
government needs to get on top of very sharply. It's
electricity prices. The electricity prices are moving up about what
ten twelve percent per year. It is not sustainable. It
(16:31):
is crippling for households. So I think if there's going
to be anything really big that she had to come,
I keep an eye on the energy seat the electricity.
Do you go into the lock up, I'll be there
for the free or ours.
Speaker 2 (16:46):
Oh well, hopefully they look after you with the catering. Hey, Cameron,
I really appreciate your time this afternoon. Thanks so much.
Speaker 3 (16:52):
All the best.
Speaker 2 (16:53):
There we go. That is Cameron Bagory. I got to
say he is bloody good Cameron. You know the economics
wise and budgets. There are a few things he's I
tried to sort of note them down as I went,
but you know, I think I don't know just the
summary of the issues for the average New Zealander listening.
(17:14):
I just think that that was an excellent given that
we haven't got any really meet to pick over apart
from the pre budget announcements, just to get Cameron's thoughts on,
you know, what the government can do, should do, and
the problems we're facing. I thought there was just ten
out of ten from him. Not that he needs my praise,
but I particularly enjoyed it.
Speaker 1 (17:33):
For more from the Weekend Collective, listen live to News
Talks it'd be weekends from three pm, or follow the
podcast on iHeartRadio.
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