July 23, 2024 • 8 mins
After a three week absence, the PM is back to kick off The Country. Today we talk possible trade hurdles under a new US Administration, the Reserve Bank and interest rates, pricing agricultural emissions and Hillbilly Elegy - the movie made by Ron Howard from the best-selling autobiography of J D Vance - the Republican nominee VP.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Good to have the Prime Minister kicking off the country
on a Wednesday. We've missed him for the past couple
of weeks because he's been taking some well earned leave,
and before that he was at the NATO summit. Christopher Luxon,
I want to talk to you about trade and Trump
and also trade and Harris. Now, when we look at
the numbers, Donald's threatening to put a ten percent tariff
(00:22):
on imports from the rest of the world and threatening
to impose a sixty percent tariff on all imports from China.
And then when we look at Joe Biden, the late
Joe Biden, I might say he'd already slapped one hundred
percent tariff on imported vehicles from China. So is this
going to create a trade war? Is ultimately whoever wins
the White House going to be bad for us?
Speaker 2 (00:44):
Well, first, Joe, good to be with you. But yes,
it was assassinating week in Washington because obviously we had
the NATO summit going on. But for me, it was
also a big opportunity to deepen the relationships across the
US political system. So I met with US senators of
Republican and Democrat persul with a range of senior officials.
What's interesting is that whether you're a Democrat or a Republican,
(01:05):
actually both sides of politics are very united around trade policy,
which has moved away from you know, free trade agreements
for example, and sort of more a more global trading
orientation now that decrabs more challenges for New Zealand. Having
said that, New Zealand exports into the US, despite not
having a free trade agreement, have actually been growing very strongly.
(01:29):
So look, it's conjecture as to what happens and who
you know, and what the implications are with respective trade policy,
with whoever wins in November five. What I'd say to
you is actually both parties are actually quite united over
the last four to six years. You think about the
US under Obama was up for joining TPP. Under Clinton
(01:51):
and Biden it isn't And under the Republican Republican leaders
and politicians on the other side are also against it
as well. So you know, we just have to do
trade in a different way in the US, but our
exporters are finding a way to do that clearly are
given the growth that we've been seeing since.
Speaker 1 (02:06):
We've last chatted, We've seen one of the most fascinating
weeks ten days in American political history, and I know
that you're an absolute student of it. The Trump assassination,
I thought, once that happened, there's no way he wouldn't
get to the White House. And yet this morning our
time was seeing Kamala Harris having a rollicking rally if
you want, in Milwaukee, And is she going to kind
(02:28):
of be the shiny new thing even though she's not
new and shiny.
Speaker 2 (02:33):
Look, I just think it's really close over there is
my personal observation. I think the reality is the country
is quite polarized, and you're seeing that where people are
either locked in with one side or the other. So look,
I really wouldn't want to pass conjecture again as to
what will be the final outcome again, you know what,
It's a reminder I think in some ways that we
(02:54):
must maintain this ability in our politics. Yes we have
an MMP environment, Yes we have part political parties with
lots of different political views. Here in his Zeland, we
want to disagree strongly, but we want to maintain this
ability because I think that's really important for us now
democraty going forward.
Speaker 1 (03:10):
Well, I respectfully respect you playing Switzerland on this one. Look,
let's move on to domestic politics. Also, while you were away,
the Reserve Bank last week came out with that OCR review.
There's more and more pressure, it would seem politically, And
even though it's not me, he's not meant to have
political pressure on them politically coming on Adrian or to
(03:32):
move sooner rather than later on interest rates. Once again,
it's like American politics. You can't comment, but a couple
of your offsiders have Winston and David Seymour.
Speaker 2 (03:42):
Well, what I'd say about it is the constructs really simple, right,
everyone understands this, and this is a lesson of economics.
If you get government's spending out of control, you drive
up domestic inflation. When you drive up tomestic completion, you
have to lift interest rates. When you lift interest rates,
your economy goes into recession and then it slows down,
and then that means you've got rising levels of unemployment.
And that is exactly what we're dealing with, given mismanagement
(04:05):
from the last crowd. So what I'm focused on, and
what Nichola Willison and I and our government's focused on,
is making sure we get inflation back under three percent.
Pretty encouraging last week see we're can close at three
point three percent, but as soon as we get it
in the band, then yes, we expect interest rates to
fall because that's what we'll then encourage people to invest.
I have more money to actually put investments in to
(04:26):
expand their businesses, to grow their companies, hire more people,
and drive economic growth. And if you're on farm at
the moment, you've dealt with huge amounts of farm inflation,
you've got this massive interest bill that's coming at you
because of high interest rates. So I'm doing everything I
can and what's called the fiscal settings to make sure
I get inflation down fast. I'm really pleased to see
the progress that we're making. It's still damned tough and
(04:49):
difficult for people. We have to go through that part
of the cycle to be able to come out the
other piece, but we're going through it. We've also got
relief coming in a week's time with tax relief for
low and middle and workers, which will help support them
getting through this next week. But yes, once we get inflation,
our goal with get inflation back to under three percent,
and then we expect interest rates to drop, and then
(05:10):
that all that will give us economic growth and keep
people unemployment.
Speaker 1 (05:13):
You were at the Red Meat Sector conference last night.
One of the interesting take homes from the Australian representative
I was speaking to on the show yesterday, Sue McCluskey,
was that under no shape, form or other is the
Australian government going to charge Australian farmers for their emissions.
We're not on that page. We're going to start charging
from twenty thirty. Who's right and who's wrong?
Speaker 2 (05:36):
Well, I'd just say to you what we're versly doing
is making sure we remove all the irritant and the
red tape and the green tape that's starting the farming
sector down and stopping our farmers from farming. The second
thing is we've got and they've got to get credit
for all the good stuff that they're doing on farm
in an a mission sense. The second thing is we've
got to make available much more technology to manage farmer
missions down. And thirdly, yes, we ultimately get to pricing
(05:59):
for emissions, but there's a long way to go before
we get to that point and we need to see
and we're also not going to have a situation where
we're closing farm production down in New Zealand and shipping
it off overseas only to worse in global greenhouse gas emissions.
We have the best farmers in the world. We have
the most carbon efficient farmers in the world, and it's
insane to actually shut down farming and as the previous
(06:20):
administration wanted to do, to ship it off overseas, only
to make global greenhouse gas emissions worse. So we're hyper
sensitive to all of that, and I think we're going
through it, and I think the farming sector is starting
to acknowledge that we are doing the right things. We're
getting rid of red and green tape, We're making sure
we're expanding trade opportunities. We need to double our trade exports.
We want to power up the agricultural primary industry sector
(06:41):
big time. There's nothing more important for us. And we've
got to keep working through making sure the technology comes
and is applied into the sector. And that has actually
been the success of the sector over the last one
hundred and fifty years. The reasoning our farmers are so
good is that we've been innovative and we continue to
adopt technology. So we've just got to power that up
again and we're continuing to do that.
Speaker 1 (07:00):
Final question for you, have you watched the movie Hillbilly Allergy.
I'm sure you would have read the book. Ron Howard
made the movie, Glenn Close, Amy Adams, what did you
make of it? And I'll skin the cat another way. Well,
after watching the movie, would that encourage you to vote
for J. D. Varnes?
Speaker 2 (07:16):
Well, you're going to get me commenting on US politics again.
But it's an incredible story. And if you don't want
to read the book, just go watch the movie on
Netflix because it's a great cast. But also it's a
great story, and it is an incredible story of J. D.
Varnes who's now the vice presidential candidate. He's only come
into politics as a senator I think in the last
eighteen months almost two years and so, but he understands
(07:40):
the challenges I think that you know, and that's partly
why we've have seen the shift and the trade global
trade policy from the US is that you know, when
you come from towns that have actually they feel they've
lost their jobs to other countries and those jobs have
been shipped off overseas, and that's driven some of the
psychology around US policy as a result. So they look
(08:01):
a great, great story, incredible story, you know, Mother who
had addiction issues his grandmother, coming from a challenging background,
and to then go on to Yale, to the law,
to then make a movie, to then go on and
become a great senator and now be the Vice President
of Canadates. It's the American dream.
Speaker 1 (08:20):
It's a good movie, well worth a look. Christopher Lux
And thanks for your time.
Speaker 2 (08:23):
Great to be with you, Jamie. You take care of
a good week.
Good to have the Prime Minister kicking off the country
on a Wednesday. We've missed him for the past couple
of weeks because he's been taking some well earned leave,
and before that he was at the NATO summit. Christopher Luxon,
I want to talk to you about trade and Trump
and also trade and Harris. Now, when we look at
the numbers, Donald's threatening to put a ten percent tariff
(00:22):
on imports from the rest of the world and threatening
to impose a sixty percent tariff on all imports from China.
And then when we look at Joe Biden, the late
Joe Biden, I might say he'd already slapped one hundred
percent tariff on imported vehicles from China. So is this
going to create a trade war? Is ultimately whoever wins
the White House going to be bad for us?
Speaker 2 (00:44):
Well, first, Joe, good to be with you. But yes,
it was assassinating week in Washington because obviously we had
the NATO summit going on. But for me, it was
also a big opportunity to deepen the relationships across the
US political system. So I met with US senators of
Republican and Democrat persul with a range of senior officials.
What's interesting is that whether you're a Democrat or a Republican,
(01:05):
actually both sides of politics are very united around trade policy,
which has moved away from you know, free trade agreements
for example, and sort of more a more global trading
orientation now that decrabs more challenges for New Zealand. Having
said that, New Zealand exports into the US, despite not
having a free trade agreement, have actually been growing very strongly.
(01:29):
So look, it's conjecture as to what happens and who
you know, and what the implications are with respective trade policy,
with whoever wins in November five. What I'd say to
you is actually both parties are actually quite united over
the last four to six years. You think about the
US under Obama was up for joining TPP. Under Clinton
(01:51):
and Biden it isn't And under the Republican Republican leaders
and politicians on the other side are also against it
as well. So you know, we just have to do
trade in a different way in the US, but our
exporters are finding a way to do that clearly are
given the growth that we've been seeing since.
Speaker 1 (02:06):
We've last chatted, We've seen one of the most fascinating
weeks ten days in American political history, and I know
that you're an absolute student of it. The Trump assassination,
I thought, once that happened, there's no way he wouldn't
get to the White House. And yet this morning our
time was seeing Kamala Harris having a rollicking rally if
you want, in Milwaukee, And is she going to kind
(02:28):
of be the shiny new thing even though she's not
new and shiny.
Speaker 2 (02:33):
Look, I just think it's really close over there is
my personal observation. I think the reality is the country
is quite polarized, and you're seeing that where people are
either locked in with one side or the other. So look,
I really wouldn't want to pass conjecture again as to
what will be the final outcome again, you know what,
It's a reminder I think in some ways that we
(02:54):
must maintain this ability in our politics. Yes we have
an MMP environment, Yes we have part political parties with
lots of different political views. Here in his Zeland, we
want to disagree strongly, but we want to maintain this
ability because I think that's really important for us now
democraty going forward.
Speaker 1 (03:10):
Well, I respectfully respect you playing Switzerland on this one. Look,
let's move on to domestic politics. Also, while you were away,
the Reserve Bank last week came out with that OCR review.
There's more and more pressure, it would seem politically, And
even though it's not me, he's not meant to have
political pressure on them politically coming on Adrian or to
(03:32):
move sooner rather than later on interest rates. Once again,
it's like American politics. You can't comment, but a couple
of your offsiders have Winston and David Seymour.
Speaker 2 (03:42):
Well, what I'd say about it is the constructs really simple, right,
everyone understands this, and this is a lesson of economics.
If you get government's spending out of control, you drive
up domestic inflation. When you drive up tomestic completion, you
have to lift interest rates. When you lift interest rates,
your economy goes into recession and then it slows down,
and then that means you've got rising levels of unemployment.
And that is exactly what we're dealing with, given mismanagement
(04:05):
from the last crowd. So what I'm focused on, and
what Nichola Willison and I and our government's focused on,
is making sure we get inflation back under three percent.
Pretty encouraging last week see we're can close at three
point three percent, but as soon as we get it
in the band, then yes, we expect interest rates to
fall because that's what we'll then encourage people to invest.
I have more money to actually put investments in to
(04:26):
expand their businesses, to grow their companies, hire more people,
and drive economic growth. And if you're on farm at
the moment, you've dealt with huge amounts of farm inflation,
you've got this massive interest bill that's coming at you
because of high interest rates. So I'm doing everything I
can and what's called the fiscal settings to make sure
I get inflation down fast. I'm really pleased to see
the progress that we're making. It's still damned tough and
(04:49):
difficult for people. We have to go through that part
of the cycle to be able to come out the
other piece, but we're going through it. We've also got
relief coming in a week's time with tax relief for
low and middle and workers, which will help support them
getting through this next week. But yes, once we get inflation,
our goal with get inflation back to under three percent,
and then we expect interest rates to drop, and then
(05:10):
that all that will give us economic growth and keep
people unemployment.
Speaker 1 (05:13):
You were at the Red Meat Sector conference last night.
One of the interesting take homes from the Australian representative
I was speaking to on the show yesterday, Sue McCluskey,
was that under no shape, form or other is the
Australian government going to charge Australian farmers for their emissions.
We're not on that page. We're going to start charging
from twenty thirty. Who's right and who's wrong?
Speaker 2 (05:36):
Well, I'd just say to you what we're versly doing
is making sure we remove all the irritant and the
red tape and the green tape that's starting the farming
sector down and stopping our farmers from farming. The second
thing is we've got and they've got to get credit
for all the good stuff that they're doing on farm
in an a mission sense. The second thing is we've
got to make available much more technology to manage farmer
missions down. And thirdly, yes, we ultimately get to pricing
(05:59):
for emissions, but there's a long way to go before
we get to that point and we need to see
and we're also not going to have a situation where
we're closing farm production down in New Zealand and shipping
it off overseas only to worse in global greenhouse gas emissions.
We have the best farmers in the world. We have
the most carbon efficient farmers in the world, and it's
insane to actually shut down farming and as the previous
(06:20):
administration wanted to do, to ship it off overseas, only
to make global greenhouse gas emissions worse. So we're hyper
sensitive to all of that, and I think we're going
through it, and I think the farming sector is starting
to acknowledge that we are doing the right things. We're
getting rid of red and green tape, We're making sure
we're expanding trade opportunities. We need to double our trade exports.
We want to power up the agricultural primary industry sector
(06:41):
big time. There's nothing more important for us. And we've
got to keep working through making sure the technology comes
and is applied into the sector. And that has actually
been the success of the sector over the last one
hundred and fifty years. The reasoning our farmers are so
good is that we've been innovative and we continue to
adopt technology. So we've just got to power that up
again and we're continuing to do that.
Speaker 1 (07:00):
Final question for you, have you watched the movie Hillbilly Allergy.
I'm sure you would have read the book. Ron Howard
made the movie, Glenn Close, Amy Adams, what did you
make of it? And I'll skin the cat another way. Well,
after watching the movie, would that encourage you to vote
for J. D. Varnes?
Speaker 2 (07:16):
Well, you're going to get me commenting on US politics again.
But it's an incredible story. And if you don't want
to read the book, just go watch the movie on
Netflix because it's a great cast. But also it's a
great story, and it is an incredible story of J. D.
Varnes who's now the vice presidential candidate. He's only come
into politics as a senator I think in the last
eighteen months almost two years and so, but he understands
(07:40):
the challenges I think that you know, and that's partly
why we've have seen the shift and the trade global
trade policy from the US is that you know, when
you come from towns that have actually they feel they've
lost their jobs to other countries and those jobs have
been shipped off overseas, and that's driven some of the
psychology around US policy as a result. So they look
(08:01):
a great, great story, incredible story, you know, Mother who
had addiction issues his grandmother, coming from a challenging background,
and to then go on to Yale, to the law,
to then make a movie, to then go on and
become a great senator and now be the Vice President
of Canadates. It's the American dream.
Speaker 1 (08:20):
It's a good movie, well worth a look. Christopher Lux
And thanks for your time.
Speaker 2 (08:23):
Great to be with you, Jamie. You take care of
a good week.
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