January 28, 2025 • 61 mins
Leighton is on summer break, so we are highlighting some of his favourite guests from 2024.
He began his tertiary education at the University of Auckland, continued it at London School of Economics and Princeton University,
He was Director of the PhD Program at Imperial College London. He has been awarded numerous prizes along the way, and returned to NZ twelve years ago.
He is Professor of Macroeconomics at Auckland University and publishes widely, including his own site, Down To Earth Kiwi.
And in spite of his career success he appears modest, but with the ability and intent to ruffle feathers.
This was a wide ranging and very enjoyable discussion.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:09):
You're listening to a podcast from news Talks. It be
follow this and our wide range of podcasts now on iHeartRadio.
It's time for all the attitude, all the opinion, all
the information, all the debates of the now the Leighton
Smith Podcast powered by news Talks It be.
Speaker 2 (00:28):
Welcome to the bearest of the Lighton Smith podcast for
the twenty ninth of January, and it is the final
replay in this particular run. We return next week with
some live content. The guest who we're replaying today is
a man named Robert McCulloch, Professor Robert McCulloch from Auckland University.
(00:51):
He has a resume to be envied. He has a
reputation that some people don't envy. In fact, some people
don't like him much because of his well opinions. But
aren't we all like that? He began his tertiary education
at the University of Auckland, continued it at the London
(01:11):
School of Economics and at Princeton University. He was director
of the PhD program at Imperial College, London and he's
been awarded numerous prizes along the way and returned to
New Zealand twelve years ago He is professor of Macroeconomics
at Auckland University and publishes widely, including his own site
(01:32):
Down to Earth Kiwi, which seems to have become more
active recently. I think it coincided with the interview that
we've done that you're about to hear. I may be
presuming too much though, and in spite of his career success,
he appears modest, but with the ability and the intent,
(01:52):
the intent to ruffle feathers. Now. This was a wide
ranging and very enjoyable discussion. A trust that you will
also feel the same Layton Smith. Leverrix is an antihistamine
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(02:56):
the label. Take as directed and if symptoms persist, see
your health professional. Farmer Broker Auckland Robert McCulloch is Professor
of macro Economics at Auckland University. Now he has a
(03:16):
very long resume, but we will stick with the professorship
at the moment because that's all that matters to us.
He is a Kiwi, he's a New Zealander. He's worked
and studied in various universities and places around the world.
Very very impressive. When did you return to By the way,
welcome to the podcast. When did you return to New
(03:37):
Zealand About twelve years ago? Have you been at Auckland
University all that time?
Speaker 3 (03:45):
About a decade?
Speaker 4 (03:46):
And when I left school in university, I work in
Wellington at Reserve Bank of New Zealand for a couple
of years before going abroad.
Speaker 2 (03:55):
How buried are you in the subject of macroeconomics.
Speaker 3 (04:00):
Yeah, well, it's the subject I've been studying for about
twenty thirty years.
Speaker 4 (04:07):
In not just in this country, around around the world,
and I take a great interest not just in economics,
but also.
Speaker 3 (04:17):
Politics as it relates to the subject.
Speaker 4 (04:21):
I used to attend the meetings of the NZET Initiative,
which is this sort of think tank National Party advisor
on behalf of one of their members, the former Bear Baron,
Sir Douglas Myers, who died a number of years ago.
Speaker 3 (04:37):
So I take an interest.
Speaker 4 (04:38):
It's not just sort of public sector but private sector,
quite quite a range as well as politics.
Speaker 2 (04:43):
The Reserve Bank, of course is another interest that you
would have. Yes, so we'll get to the Reserve Bank shortly.
But the state of the country at the moment financially economically,
how do you view it?
Speaker 4 (04:56):
Well, it's not great, of course. Why isn't it great?
A lot of it has to do with how the
country was managed during the COVID years and the finance
minister back then, Robertson, who's popped up as vice chancellor
(05:17):
of Otaga University on six hundred and twenty nine thousand
a year.
Speaker 3 (05:21):
By the way, Grant Robertson assured us.
Speaker 4 (05:25):
That he really staked his reputation on the fact that
he said the COVID policy of the government would create
good health outcomes and good economic outcomes.
Speaker 3 (05:36):
The two went exactly had in hand.
Speaker 4 (05:40):
Well, that's been proven to be false, and that line
was also promoted by Michael Baker at the epidemiologist at
Otaga University.
Speaker 3 (05:52):
That's just not true. As a result.
Speaker 4 (05:55):
Of the policies during the COVID years in which they
Reserve Bank printed fifty billion bucks of cash on top
of a massive fiscal expansion of the government of Robertson
financed by debt, those over the top policies have landed us.
Speaker 3 (06:16):
Have a large part of the responsibility for.
Speaker 4 (06:18):
Landing us in the mess we're currently in, which is
a recession. Westpac economists of predicting it might even be
a triple dip recession.
Speaker 3 (06:29):
And so we're still.
Speaker 4 (06:31):
Emerging from the carnage of those six years of mismanagement
by Grant Robertson. So you know, good luck to Otaga
University because Robinson's been hired by them to sort out
their financial situation, while Grant has left the financial situation
of this country in an utter shambles.
Speaker 2 (06:52):
So you singled him out as far as the government
is concerned, Does the then Prime Minister have a percentage
of responsibility for that?
Speaker 3 (07:02):
Well, of course, because there was this view.
Speaker 4 (07:07):
That they bought into, coming from their advisors like Baker
and Otago. The theme of their government was good health
outcomes go hand in hand with good economic outcomes. They
thought everything they were doing in terms of COVID would
(07:27):
lead to the best.
Speaker 3 (07:29):
Economic outcomes in the world.
Speaker 4 (07:31):
So they argued, we're the best health outcomes and we'd
have the best economic outcomes. Well, funnily enough, America is
currently booming and we're in a recession.
Speaker 3 (07:42):
So heck, that was a bit off, wasn't it?
Speaker 4 (07:45):
And what really stuff the country was towards the end
of twenty twenty one going right Quite recently into twenty
twenty two, Auckland was in a full scale lockdown. So
the city where almost forty percent of the country live,
the hub of much of its economic output, was shut
(08:07):
down and the entire city was locked up. And you
know that, I think took away the mojo of Auckland.
It took away our confidence and Hipkins and a Deern
were largely responsible for that. Seems at some sort of
quite deep level, Hepkins really doesn't like Auckland, and Auckland
(08:29):
doesn't really like him, so it's hard to see how
he could ever really hope being Prime minister again when
he did that to forty percent of the country's population
and stuffed the economy in the process.
Speaker 2 (08:44):
It's a very interesting and I think very accurate take.
But there were other things that contributed to the to
the situation in Auckland. Of course, we'll get onto one
of those. No, we'll get onto a couple of those shortly.
There is another matter that has bugged this country for
a long time, productivity or lack of it. More importantly,
(09:06):
why is it that our product activity has been steamied
for so long and nobody seems to be able to
make what is a worthwhile impact upon it.
Speaker 4 (09:19):
Well, yes, productivity. It's in the news all the time.
It has been for the last twenty odd years. And
my view of that is that the so called experts,
and you know some folks would say, and I'm meant
to be an expert. Well, the government set up the
(09:40):
Productivity Commission, which was focused entirely on that matter, how
to find out what was causing low productivity and how
to fix it, and it's recently been wound up, it's
been abolished by the government. So my view on that is,
if you're briefly honest about it, we still don't know
exactly what has held back productivity growth in the country,
(10:06):
and I think that severe solution. Instead, you have a
different person every week saying they blame red tape. Others
blame how geographic isolation. Some people say there's something wrong
with the tax system and that should be changed. The
(10:31):
Productivity Commission said, where you know, so far away from
our major markets.
Speaker 3 (10:36):
We're a small country.
Speaker 4 (10:37):
But the Productivity Commission ended up listing about twenty different factors,
And in a way, that's unsatisfactory because you really want
to know what's the most important factor, and you know,
a ranking of the factors, what's the thing we should
really focus on.
Speaker 3 (10:55):
Is it, say, red tape?
Speaker 4 (10:56):
And you know David Seymour's going to head up a
new Ministry of regulation to try to cut that. But
is that the main issue or is it something else?
And I think the Productivity Commission failed because it never
really ranked that long list in order of most to
least important. So it is unsatisfactory that for that reason,
(11:21):
because you know, the experts have never definitively identified what
it is. And it's become also confused by the fact
that productivity has been slowing in other countries like the
United States and in Europe that many many of those
countries have been suffering a productivity slow down, and some
(11:43):
of them are pointing to issues like the aging population.
Speaker 3 (11:48):
They're just not as sort of many young.
Speaker 4 (11:50):
People who sort of tend to be more innovative than
older people. So it's incredibly hard to identify exactly what
the cause is. My suspicion in this country over the
last ten or so years is that we've drifted into
(12:11):
not becoming a meritocracy, and the people, the students we have,
the ones who work hardest get the highest grades, they're.
Speaker 3 (12:20):
Not getting the best jobs.
Speaker 4 (12:22):
Other factors are coming into play, and certainly we know
if you try to run a nation where the best
people are not promoted to the top, productivity we know
for a fact in economics is.
Speaker 3 (12:38):
Really going to suffer.
Speaker 4 (12:40):
Market economies are built on rewarding effort and ability. And
so my sort of preferred suspect as to what's holding
us back is we have to get back to a
country where meritocracy is rewarded. And if you look at
the outstanding performance of our athletes, how is the Olympic
team chosen? Is it chosen on sort of other factors
(13:05):
coming into play, on what kind of tea that looks
nice that you want, or is it done on who
got who was the fastest, who was the fastest canoeist,
who was the quickest, who could jump the highest and
high jump. No, they select the team on who was
the best, the highest, the strongest.
Speaker 3 (13:25):
They don't select it on other factors.
Speaker 4 (13:27):
And look at what the Kiwi athletes did, one of
the best performances in the world. So I think I
think as a country we respond to incentives, and I think,
particularly over the last six years, certainly labor virtually destroyed
the idea of meritocracy in the country. I think it's
unforgivable what they did in that respect.
Speaker 3 (13:47):
We have to get back to rewarding merit. That's my view.
Speaker 2 (13:51):
That's I'm not going to prove easy, I feel, but
I very much appreciated you pointing out the dying off
of a certain class of the population. I don't want
to narrow it down, but just the dying off of
an attitude that came out of the Second World War.
If it wasn't there before, uh and and and stayed
(14:14):
for a long time, and then all of us, well
not all of a sudden, but it seemed all of
a sudden you had a different approach from those who
were exiting school going on to to wherever else they
went that lacked lacked an attitude. Now I can I
can point to that in the in the industry or
(14:36):
the business that I've been in, when they've experienced people
are playing for jobs and it's nights or weekends or
a bit of both or whatever. No, no, no, no,
I don't work weekends. I don't work nights. I've got
other things to do. And this has been an attitude.
(14:56):
And the Minuture, the Minuture hear that it's really a
case of I want the corner office. Not did you
have officers anymore in broadcasting, but I want the corner office,
and I want at least three phones and a television,
and by the way, while you're at it, get me
a maid. That's the attitude that has entered the arena,
and I think, I think that's why it's been very
(15:17):
hard to identify it.
Speaker 4 (15:19):
You know, if you're looking at statistics and numbers, it's
very hard to prove it when it's sort of a
cultural change in an attitude. But that's what my suspicion
is it is that kind of attitude change you're changing
or you're describing. You know, I've heard by the way,
it was from the wife whose husband was the former
(15:43):
chief executive of Southern Cross Medical Insurance, so they know
all the sort of doctors in the country. She said,
there is no doctor shortage in the country. That's all
a myth. Apparently the talk is as you say that
a large number of medical school graduates now don't want
to work, you know, five seven days a week. My
(16:07):
dad was a GP works even days a week for
many years when I was growing up. He was on
call frequently in the weekends. Apparently, she said, you know,
a lot of graduates now want to work Tuesday to Thursday,
you know, have these sort of hours of their choosing,
and they're just as an attitude, they don't want to
work like the previous generation did.
Speaker 2 (16:27):
Well, there's another aspect to the medical side of things,
and that is the changes in well the attempted changes
in hospitals by boards of how doctors conduct themselves. And
I have to include, because I can't avoid it, the
(16:49):
racial aspects of it with and I've been shown numerous,
on numerous occasions examples of this where if you are MARI,
then you are entitled to first and more of much
of the health system. And there's no avoiding it. And
I said to very good specialist when he was actually
(17:13):
showing me what he had to deal with, I said,
would you consider leaving the country without breathing? He said yes,
And that probably has led to the belief, well contributed
to the belief that we have a shortage of doctors,
and maybe we have a shortage of specialists. I don't know.
Speaker 4 (17:33):
Yeah, well, the entire health system needs to be changed.
It's not a matter of just changing the person at
the top, like Lester Levy. The entire system has to
be changed. My preferred reform, which I don't think that
the NATS have got the guts to do, is to
keep the single payer structure.
Speaker 3 (17:53):
That we have.
Speaker 4 (17:54):
That as the government pays the bills universal health care
so no one has to worry, but it negotiates prices
at the hospitals for all different procedures. Barmak already does
that with the private drug companies. The medical laboratories are private,
gps are private practices, so the government negotiates prices and
(18:16):
then anyone public or private can offer their services at
those at those prices.
Speaker 3 (18:22):
And if it turns out that.
Speaker 4 (18:25):
Over half of the hill system that people prefer to
go private and over half of it is private suppliers,
and that's fantastic, and the public hospitals maybe become smaller,
or if the public sector is able to outcompete the
private that's great as well. But we need massive influx
(18:47):
of competition, probably a huge expansion of private suppliers. Everyone's covered,
and you can choose whether you go public and private.
But having this system of a single payer, which is fine,
but also essentially single supplier that is the big public hospitals,
you get into all of this mess where them's policies
(19:09):
on all sorts of matters, not just medical help, but
all sorts of ideology of the government creeps into the
supply side, and I think that needs to change.
Speaker 2 (19:21):
I want to back up just a moment, when you
were mentioning the pandemic and the effect that it had
in the reaction to it on both the health and
economic front, what advice would you have because undoubtedly, well
I'm guessing that you woul't ask for any advice, but
what advice would you have given the government if they
(19:43):
if they'd sought it.
Speaker 4 (19:45):
Yeah, well, the government had their chosen advisors. I think
that led to Durn's downfall because she didn't listen to
a range of advice. She just had the advisors who
she loved, and she listened to pretty much everything they
had to say.
Speaker 3 (20:04):
So this isn't with hindsight.
Speaker 4 (20:07):
By the way, Robertson accuse some of us who do
commentary on this as just commenting with the benefit of hindsight.
At the time, I was writing that on the blog
in the papers that given there was such an extraordinary
large fiscal expansion of borrowing financed by borrowing, it was
(20:29):
unnecessary to do such a large monetary expansion as well.
Speaker 3 (20:34):
So at the time my view was that was a
major mistake.
Speaker 4 (20:38):
Of course, the wage substy scheme, that sort of thing
was all good. But when you had the wage substy
scheme in place, why on top of that did you
need to print fifty billion bucks. So I think it's
virtually criminal what the Reserve Bank did. We already had
one of the world's largest fiscal expansions and to put
on top of that one of the world's largest monetary expansions.
(21:00):
So at the time, with all the limited power I have,
which is doing things like your show. I was arguing
one should not do that monetary expansion.
Speaker 3 (21:10):
What did it do?
Speaker 4 (21:11):
It blew up inflation, and then the Reserve Bank governor said,
well we have we have to now engineer recession to
get the inflation I created back down again.
Speaker 3 (21:22):
He actually got that wrong as well. He did an
engineer recession.
Speaker 4 (21:25):
It looks like he's engineered three recessions, and so he
threw the country into a cost of living crisis as
people struggled to pay their mortgages. So I think that
was a fundamental mistake that was made.
Speaker 2 (21:38):
Do you do shopping as in food?
Speaker 3 (21:40):
Yeah? Yeah, yeah.
Speaker 2 (21:41):
Were you constantly aware of the increase in the bill
that you had to pay every time you went shopping?
Speaker 3 (21:50):
Oh?
Speaker 4 (21:50):
Of course, of course. I mean, you know, I have
three children, of course we can. It's just astronomical. The
I think our food bill is probably you know, higher
than the average wage in the in the country. It's
just just for not nomenal and you know that means,
(22:11):
you know, to bring up children now just to pay
the groceries, both parents have to work. You can't you
can't buy grocery bills in a million years in this
country with one parent working on the average wage, you
can't you can't afford food. So of course that was
a Now on that topic, can you believe it that
(22:32):
it's in the news every other day that.
Speaker 3 (22:36):
We have this duopoly with the supermarkets?
Speaker 4 (22:40):
So what did Adarn do in her infinite wisdom during
the lockdowns? He granted the duopoly. The monopoly enshrined in
law that no one else in the country could sell
food during the lockdowns, only the two super big supermarket
(23:01):
chains chain.
Speaker 3 (23:02):
So every small business.
Speaker 4 (23:04):
And grocer got wiped out and that was the law
of the country. So that was another I think economic
policy where a Dern and Hopkins and Robertson enshrined the
power of monopolies in the economy.
Speaker 3 (23:20):
And I still don't think we pulled out of that.
Speaker 2 (23:25):
Do you think that that was just plain ignorance or
did that did that deploy some shall we say socialist approach?
Speaker 4 (23:37):
Yes, I mean the ideology of socialism was there with
just command and control essentially it you know, it's called
an economics command and control regulations that every the idea
was we can sort everything out through by by command.
Speaker 3 (23:58):
And I think in.
Speaker 4 (24:01):
Dern's head the idea was, well, we listened to Baker
at Otago.
Speaker 3 (24:05):
Because he said we should lock down.
Speaker 4 (24:08):
The only practical out of doing that, we grant a
monopoly to the chains. And then, of course, gosh, if
the supermachor chains have made if people like that have
made too much money because of our policy, well we'll
call David Parker and ask him, with mister Pikeaty, how
to design capital and wealth taxes in the country to
get the money back. I mean, this is just a
(24:28):
shambalaquay of conducting, conducting, you know, a country's management.
Speaker 2 (24:35):
Well, shambolic and ignorant.
Speaker 3 (24:37):
Yeah.
Speaker 2 (24:38):
Yeah, I have to slip in here that I did
some economics, and I'm reluctant to do it because I
never finished anything. But I did some economics and my favorite,
my favorite class was comparative economic systems, and it set
(24:59):
me on a path that ended up with me being
in the Soviet Union as it still was in January
of nineteen eighty nine, and I saw firsthand and experience
firsthand as a guest of Navosity Press, all sorts of
aspects of life that we avoided, of course, But how
(25:28):
anybody with the history that socialism has Marxism has I
just don't know how anyone can be a part of it.
It's absurd. Now you want to take any issue with that.
Speaker 4 (25:41):
We'll ask a Dern because she still wildly embraces it,
and of course the Labor Party is wildly embracing it.
So surprisingly, there was some very strong comments earlier this
week anti charter school comments.
Speaker 3 (25:57):
By the Labor Shadow education.
Speaker 4 (26:02):
Spokesperson, and it was sort of a vitriolic spewing of
invector on the idea that privately supplied anything that's privately
supplied was really a sort of horrible idea, and the idea,
even though charter schools are publicly funded, the idea that
(26:22):
private suppliers would run them was just went against everything
the Labor Party stood for, which is amazing to hear
that in twenty twenty four.
Speaker 2 (26:33):
Think that you really think it's amazing, Well maybe not.
Speaker 4 (26:39):
I was surprised because that the only way out of
the mess of not just education but the health system
is that that kind of model of public funding which
ensures equity that regardless whether you're or wealthy, whatever, everyone
can go to a charter school, or regardless of wealth,
(27:02):
you can go to any medical supplier of your choice.
But you, of course, to have competition between public and
private suppliers is a great thing.
Speaker 3 (27:13):
That competition is fantastic.
Speaker 4 (27:16):
So to hear labor coming out anti competition, I find
I find unbelievable.
Speaker 2 (27:22):
Well, I follow the charter school game for the last
few years and done a number of interviews around it,
and it's to me it comes back to the to
the power of the teachers unions essentially.
Speaker 4 (27:38):
Yes, And I mean what struck me was that labor
must really really want the education of young Maori to suffer.
Because President Obama in America, his words were he lauded
charter schools in America as a beacon of hope for
young Black American children. And they also were showing great
(28:01):
results for young Maori children because that model of independence
and you know, you can design the schools policies with
more freedom from the state was showing great results. So
it seems that some level labor really have it in
for the education of young Mari.
Speaker 2 (28:21):
The subject of infrastructure has had a big play in
the last few weeks. It was brought home to me
when I was listening to the radio and heard commentary
with regard to the necessary machinery for infrastructure, and it's
basically all left. All the big stuff has left the
country and getting it back isn't isn't going to be easy.
(28:44):
How much is that going to hinder the development of
well the comeback for this and any other government, let
alone the people.
Speaker 4 (28:55):
Yeah, well, the infrastructure thing has rumbled on, of course for.
Speaker 3 (29:01):
A long time.
Speaker 4 (29:03):
The most important infrastructure is probably the ones of our cities. Surprisingly,
some infrastructure projects like highways can be more controversial.
Speaker 3 (29:16):
In America, there's this.
Speaker 4 (29:19):
Thing called the highway movement, and they want all these
interstate highways to be fantastic, and some urban economists have
been a bit critical of some of that focus. We
invited the world seating urban economists Dead Glazer out here
many years ago, and their priority is to get the
cities right, because the more you have magnificent highways leaving
(29:43):
the cities, that can be responsible for sprawl, you know,
miles out of the cities. It can encourage you know,
less densification. So I think on infrastructure, it's you know,
the cities are vital.
Speaker 3 (29:58):
You know, Auckland's going towards forty percent of.
Speaker 4 (30:02):
The country's population, and the infrastructure of cities like Auckland.
Christ Tish really has to be great to otherwise, if
our big cities fail, the country will fail. So yes,
that's you know, that debate has rumbled on for many years.
Speaker 3 (30:23):
And I mean, what can I do about it?
Speaker 4 (30:26):
A decade ago we invited the world seeding urban economists.
He made all of these points, he met all the
people in government and the council. They ignored every piece
of advice he gave. He told them a decade ago,
you've got to introduce toll roads congestion charges. Now what
ten or twelve years have passed and they're still discussing
(30:47):
congestion charges and tolls.
Speaker 3 (30:51):
I mean, what more can we do?
Speaker 4 (30:52):
We invite the world's experts out, we sit them in
front of Labor and National prime ministers, we carry on
about infrastructure. I used to attend the meetings of the
NZET Initiative.
Speaker 3 (31:04):
I lobbied.
Speaker 4 (31:05):
I remember when John Key was Prime Minister for more
of the spin. They all shut me up. They said,
oh mate, what would you know that? You know, we're
rebuilding christ Church, so we don't have any money for Auckland.
I mean this, whether it's National or Labor, I'm just
I'm just tired of all this bull crap.
Speaker 2 (31:20):
Does that encourage you to think about leaving the country, Oh.
Speaker 3 (31:25):
It doesn't.
Speaker 4 (31:25):
I think it's still a great place to live. Look
the irony of this country in terms of leaving there
is a great almost paradox that we're doing badly on productivity,
but in terms of these quality of life and disease,
which I take quite seriously. How sort of happy people
(31:48):
are in countries, New Zealand has typically been in the
top ten Kiwi's rank is having extremely high levels of
overall quality of life, and you know, thank god that's
the case, even though financially we haven't been doing great
that the overall quality of life is.
Speaker 3 (32:05):
What keeps many of us here.
Speaker 4 (32:09):
And so I think, I think we still have a
very powerful card to play with that overall quality of life.
And if and if our cities are made very you know,
edgy and diverse livabol but also with great opportunities, they're
a real melting pot of innovation and hubs of entrepreneurship
(32:31):
that you know, if we can just get that mix
right with the lifestyle and the proximity to the beaches
and the mild climate, I mean, we still have extraordinary
natural assets, So I think I think that is we
still have reason for hope.
Speaker 2 (32:47):
Well, as somebody said recently, hope isn't the what's the
term hope? Hope is not a plan anyway, Just speaking
of people leaving the country, you must know because you teach,
you must know the number of graduates who are packing
their bags and leaving the country.
Speaker 3 (33:07):
Yeah, that phenomenal.
Speaker 4 (33:09):
I mean most of the ones who've done well typically
say they wouldn't apply for a job here in a
million years, so they're off.
Speaker 3 (33:17):
There is an exodus at that level.
Speaker 4 (33:20):
You know, it's not widely reported in the media sort
of what's driving part of that because it's not even
after people have finished training here. There's an unprecedented move
where people are leaving even after finishing up at school.
So it's not just posh private schools. But if you
look at from McLean's College and Auckland rang A Toto College,
(33:42):
a whole bunch of public and private schools, roughly the
top twenty students from when they're seven eighteen years old
are leaving the country at eighteen and that's a very
young age and they'll probably never come back.
Speaker 3 (33:56):
And so.
Speaker 4 (33:58):
The trend is for increasingly star performers at young ages
to go.
Speaker 3 (34:04):
One of the reasons for that is.
Speaker 4 (34:05):
I think in the name of ecality, even if you
do amazingly at school here, it doesn't really help you
because you can be a star student that everyone just
goes to the local training college, the local university. Everyone
just piles into Victoria or Otago Auckland. Whether you've been
(34:27):
top of your year or Ducks, whether you're a star athlete, whatever, you.
Speaker 3 (34:33):
All just go to the same place.
Speaker 4 (34:34):
The whole point of working hard at school in nearly
every country, from China to India to England to France
the United States, is it sets you up to go
to an amazing college. If you're a sports star in
the US, you get into Stanford because you're an amazing swimmer.
That's the game. So that's what incentivizes people here. You
(34:58):
bust your ass at school, you do great, and then
in the name of egoitarianism, oh, let's just.
Speaker 3 (35:05):
Pretend that never happened.
Speaker 4 (35:06):
Pretend you didn't become a sports star or an academic star.
You know, and if you did, it's probably because you're
from a privileged background. So screw you, and you can
all start the same at university again. Well that I
think that's creating a massive brain grain for the country
because these kids are you know, I think everyone knows
(35:29):
the truth. Now, these are the Ivy League schools in America.
Universities around the world are targeting our star athletes, our
star performances, and they're putting them on full scholarships. So
this isn't happening when they're older. This is happening at eighteen.
We're losing the cream of the country at eighteen years old.
Speaker 2 (35:46):
We are we losing many students to elite universities in
the States. Because I've got to carry I've got it.
Are we losing many.
Speaker 4 (35:55):
Well, I can tell you because the schools I see
are from a range of schools. Now, when they send
their reports, they list down the number of students who
are going to overseas universities, and of the top schools
in Auckland, you'll see roughly the top ten twenty students,
(36:15):
nearly all of them are going to overseas universities.
Speaker 2 (36:18):
See, I've I've got to count you a little, and
I'll be interested in your reaction because there is a
change in America that elite colleges are not worth going
to now. I was reading something just a few days ago,
and let me get this. Right to go to Yale,
(36:40):
for instance, which will cost you something like six hundred
and something on thousand dollars, take that debt, if you've
got to borrow the money, take that debt and work
out how much of your life is going to be
spent repaying that There is a swing away, is what
(37:02):
I'm suggesting from what I've seen in the last few months,
that the kids are kids and their parents recognizing that
the elite universities are now a waste of money because
of their DEI and and all the other alphabet soups.
Speaker 4 (37:19):
Well, the key we kids this top group, this elite group,
which you know, by the way, for a small country
like us, it's devastating. They're they're being offered full scholarships.
They're not paying anything. So if you're a top tennis player,
swimmer row, you know that they are coming out and
(37:41):
fully funding you. So I don't think many would turn
down a full you know, in fact, they've been given
six hundred thousand by the likes of Yale.
Speaker 2 (37:51):
I wouldn't I would, I wouldn't argue with you on
that at all. It's it's just it's the home team
that seems to be seems to be reacting anyway.
Speaker 4 (38:00):
By the way, By the way, a large group, the majority,
are piling into the Australian universities, so that's sort of
a well known fact.
Speaker 3 (38:09):
They're piling into Melbourne and Sydney.
Speaker 4 (38:12):
Melbourne's got a world sort of roughly top ten ranked university,
I don't know, it's sort of sixteenth in the world
or something, and they've become enormously attractive to chew students.
I think Chris Suckson's daughter, he was in the paper
going to her graduation in Melbourne. That's a very large
part of the scene.
Speaker 2 (38:31):
Now interesting because there was another little home event. One
of my boys we went in twenty ten to when
he was stort school. At the end, we went to Melbourne,
we did interviews, he was accepted into law and he
(38:54):
was accepted into the only house that he wanted to
stay in to live in color College, and we were
and looked at it. It was stunning. But in the
end he decided to go to a target. Hm hmm.
I think it had I think it had as much
to do with mates as.
Speaker 3 (39:13):
He might have.
Speaker 4 (39:13):
He might have made he might have made a mistake.
I mean, I call Otago the party university. So I
trust that wasn't his motive.
Speaker 2 (39:20):
No I can. I can tell you it wasn't, But
that doesn't mean he didn't fringe on it. Look expanding
some of the some of the matters that we've already discussed. Infrastructure,
for instance, the state of the of the biggest city
in the country is still disastrous, still appalling. I've forgotten
(39:42):
now how many more years the underground is going to take.
I've also forgotten what the latest pricing is. All I
know is that, as expected from the beginning, it's blown
out of all proportioned to what it was going to
cost in the first place. Anybody with any vision an
experience watching the cost of large scale infrastructure could have
(40:07):
could have told that. But it has anyway. They they're
still in a state of flux. They've ruined Queen Street,
They've ruined Custom Street and Key Street. They've they've screwed
up just about everything and wild there's been a bit
of a reprise for Smith and Coey. The big historic
(40:30):
store is no more and people are not even wanting
to live in the city now. So where does that where?
Does that leave us with regard to our discussion. Let
me make a suggestion. Auckland Transport, which I've termed the
biggest example of the administrative state in this country, has
(40:51):
has contributed to the wreck that Auckland CBD has become.
And they're still not overdoing it. They still want more.
Speaker 4 (41:01):
You say, yeah, look, you know it's it's it's just
leaves your speechless. The Empire State Building, by the way,
from before the spot that was in the nineteen twenties
in America, from before the site even the foundations.
Speaker 3 (41:18):
Were dug, it was just flat land. From the time the.
Speaker 4 (41:24):
Starting date where the foundations were dug to the opening
of the Empire State Building is a completed building.
Speaker 3 (41:30):
Do you know how that take a guess? How long
was that?
Speaker 2 (41:35):
Three years?
Speaker 3 (41:37):
Fifteen months?
Speaker 2 (41:39):
I knew it was now, but I didn't realize it
that quick.
Speaker 3 (41:42):
Yeah.
Speaker 4 (41:42):
So then you take a look at lovely, our lovely
Fletcher Building putting up the Convention Center, which is about
one percent zero point one percent the size of the
Empire State Building coming up for what ten years, coming
up for ten years. Fletchers can't even put up a
tiny little building in ten years. And then they blame
(42:04):
a fire, and everyone blames everyone, and it just descends
into the usual blame game of the leaky home crisis
and god knows what so's It's a disgrace, isn't it.
And Auckland Transport, I mean, what an organization. Obviously in
its current form it should be disbanded. The mirror is
right via the whole board. But the catch crow of
(42:28):
the American Revolution was no taxation without representation.
Speaker 3 (42:33):
So where does it?
Speaker 4 (42:35):
Organ Transport get its money from our taxes? But we're
not represented by it. It's not responsive to what the
people want. We all keepe its guts. It's got an
approval rating of like negative one hundred, and the whole
thing should go. So either it's put more directly under
the control, directly under the control of the mayor, the
(42:56):
council or the minister, and emergency action is taken. You know,
maybe there is some reason for optimism. Although people critique
Chris lux And for being a CEO and knowing more
about sort of management maybe than governing a country, maybe
it's a good thing. Maybe if he can go through
(43:17):
all these organizations with a fine tooth comb, get rid
of the boards. You know, they've done that in the
health end Z and he can look at the way
all of these things are running like divisions of a company,
and he can get things running more efficiently and the
reporting lines changed.
Speaker 3 (43:36):
Maybe, you know, he could prove to be a very
good leader.
Speaker 4 (43:40):
Maybe that is what the country does need, are some
you know, competent manager going through the shambles of these organizations.
If you look at the board of Auckland Transport, a
lot of them seem to be showing off saying we're
on the boards of ten other companies and directors.
Speaker 3 (43:56):
I mean, what is this?
Speaker 4 (43:57):
What is this old style kei we game where you know,
at cocktail parties and social scenes you say, oh, I'm
on the board of ten companies. Well, obviously they don't
have time for any one of them. It's sort of
a social game in this country to be on these boards.
And then you take twenty thirty forty fifty thousand for
each board, and when you multiply it by ten boards,
(44:18):
you're on five hundred thousand dollars a year for doing nothing.
So I think there needs to be a really a
real change in the way that Fletcher's Boards, by the way,
is no better Fletcher Building so there needs to be
a change in the way that the governance has done
and let's trust that Luxon will take aim at all
these places and sort them out in the next couple
(44:40):
of years.
Speaker 2 (44:40):
All right, off the back of people leaving the country,
have got the have we got the intellect left behind
who can achieve the things that you're talking of.
Speaker 4 (44:52):
Well, we've got to fall back on this fact that
we were in the top ten in the world in
quality of life, and so we've got that to back
us up. It's promoting I think, you know, in the
famous words of John F.
Speaker 3 (45:05):
Kennedy, you know, a new generation.
Speaker 4 (45:07):
We've got to take some risks and bets on the
new talent coming through and you know, put them in positions,
often of power, and get the best offer someone who
might be thinking of leaving the country the top position
to sort out these sorts of these sorts of places,
not the usual boring suspects of you know, there's a
(45:30):
chairman of one of New Zealand's largest public companies that
I bought a product from. I can't name his name
or you get sued, but it broke and they blame
me for it. And I went to cirk and after
a month or two I got in touch with the
chairman of this major public company and virtually he'specially uncontactable.
And then I discovered where he's living. He's living in Wanaka,
(45:51):
for God's sake, skiing half the day, barting around. I mean,
is this the new Zealand? We want this old style
thing where you're on the boards of twenty companies. Nothing's
running properly, you're basing yourself online and Wanaka. I think
there does need an added hudent culture shift and let's
trust that Chris Hucksen will try to sort it out.
Speaker 2 (46:13):
Watch this space very carefully. There's a couple of things
that I want to I want to spring on you
and if it's if it's not your field, then just
say so. But I'm first, first of all intrigued with
what your feelings might be about artificial intelligence.
Speaker 4 (46:33):
Well, yeah, my feelings are that it is is probably
going to be a revolutionary technology.
Speaker 3 (46:41):
I'll tell you my sources for this.
Speaker 4 (46:45):
I met about six or seven years ago Shane leg
who's a key we born and rot Rua who's in
charge of Google's worldwide efforts to.
Speaker 3 (46:59):
Advance artificial intelligence.
Speaker 4 (47:01):
And Shane Legg's company, deep Mind was really the company
that started the AI revolution, so remarkable that we have
a kiwi. He sold that to Google one hundred million pounds.
It was backed by Peter Teal, who's a New Zealand citizen.
He was the first investor. So leg is part of
that musk sort of Teal group. He's a classic case
(47:24):
of a talented kiwi who is not returning to the
country and is based in London. But obviously he's no
fool and he's absolutely convinced that this is a revolutionary technology, which, ironically,
going back to your productivity issue, if it is a
lot of those issue issues could melt away to the
(47:47):
extent it transforms our lives. The other point of view,
there is a counterpoint of view. I have a friend,
James Lowry, who was sort of another example of our
brain drain. He was ducks of his school all the
way through New Zealand and then he left. He lives
in New York, also working for Google, and I asked
him about this question. He comes out here a lot.
(48:10):
He was a bit more skeptical. He said that many
people are using it more as a toy. He used
the word toy to describe it. And it's still yet
to prove its sort of practical applicability. And I see
a certain resonance with what James Srry is saying that
you know, many people are saying, oh, isn't it cool
what AI can do? But it's a bit has that aspect.
(48:31):
Isn't it fun? It's like a game, It's like a toy.
So you know you've got shame leg and this other
point of view, but certainly it's a shame New Zealand
can't get more involved in this technology through people like
Shame and also Peter tal But of course the christ
Church judge went and told Eel that she didn't want
(48:53):
to building houses in the South Island and to you.
Speaker 3 (48:56):
Know, go jump in Lake Wanaka. And you know what
a jerk he want.
Speaker 4 (49:00):
For trying to build the most environmentally friendly house in
the South Island. So being a libertarian, I don't think
he'll spend much time here. So good on the christ
Church much he decided to you know, reject his house.
Speaker 2 (49:12):
Well there's another matter we could have discussed. But activist
activist judges, I want to just counter you gently with
something I read this morning. We continually hear from globalists
at the World Economic Forum and other elitist institutions that
AI is the catalyst for the Fourth Industrial Revolution, a
(49:36):
technological singularity that will supposedly change every aspect of our
society forever. I keep waiting for the moment that AI
does something significant in terms of advancing human knowledge or
making our lives better. The moment never comes. In fact,
the globalists keep moving the goldpost for what AI really is.
I would note that the w e f zalots like
(50:01):
Juvel Harari talk about AI like it is the rise
of an all powerful deity. Yet Harari has also recently
downplayed AI as a sentient intelligence. He argues that it
does not need to achieve self awareness or consciousness in
(50:21):
order to be considered a super super being or living entity.
He even suggests that the popular image of a terminator
like AI with individual agency and desire is not a
legitimate expectation. In other words, AI as it stands today
is nothing more than a mindless algorithm, and thus it
(50:43):
is not AI. He goes on for a few pages,
what do you think.
Speaker 4 (50:50):
Well, there is a debate about this, of course, going around,
and because it's so new, it is still a debate.
Of course, we don't know, at least if you fall
back on we fall back on our economics.
Speaker 3 (51:07):
It's not the first time there's been the possibility of
a huge change in technology.
Speaker 4 (51:14):
Because one of the most studied episodes in the subject
of the Industrial Revolution in England and you know, in
the seventeenth eighteenth century, and that did transform life, you know,
so that the Industrial Age is obviously a big part
of our history. It turned Britain into the world's leading
(51:35):
superpower of its time. That was really responsible for the
British Empire. It had the largest GDP in the world,
and the steam engine and all those inventions did transform
a human life. So these things do happen, and you know,
if you listen to I've listened to. My source is
(51:58):
Shane leg who I spoke to a number of years ago,
and he's convinced it amounts to a revolution. He's absolutely convinced.
And he there's a book called Soulful Machines. I think
on the topic of what you were saying of can
these machines.
Speaker 3 (52:13):
Have a soul?
Speaker 4 (52:15):
There is a I'll try to fall back on the
debate because heck, you know, it's not my field of
expertise on specifically a bit more the economic consequences.
Speaker 3 (52:26):
There's a chap that in America who is.
Speaker 4 (52:30):
Sort of the big name economist works in this field
of technological progress and change, and a guy Darren as Moglin's.
Speaker 3 (52:41):
He says he's.
Speaker 4 (52:42):
Concerned about AI because he said they seem to be
designing it to replicate.
Speaker 3 (52:47):
What humans do.
Speaker 4 (52:49):
And he says, the thing is technology should really be
supporting what we do. It should be making human life
better and enabling humans to be more productive. And when
humans work with machines that make them more productive, that
leads to higher wages because your your labor productivity goes
up the more capital you're working with. It enhances what
(53:12):
you can do as a human. And he doesn't like
the idea that sort of the AI people are trying
to not complement what humans do but substitute for them,
almost like say, you know, sucked in, you're a human,
but here this machine can talk better than you, write
better than you, and even the robots, like the Terminator,
(53:33):
they look like you. And he's sort of a bit disturbed,
like what's going on where they're trying to copy and
substitute for what humans do, which could make more humans unemployed.
We asked another economist out about eight years ago called
Larry Popley cough from America. And you may think it's
(53:54):
a bit funny, but he made this comment on what
technology can do.
Speaker 3 (54:00):
By comparing humans with horses.
Speaker 4 (54:02):
Apparently there were apparently one hundred years ago there was
something like a million working horses. I think tens tens
of millions of working horses in America.
Speaker 3 (54:11):
Now there are only a few hundred.
Speaker 4 (54:13):
Thousand, because once they invented the car and all these
sort of technologies, there was nothing for horses to do anymore.
So there's only a handful of horses in America that
are mainly race horses, and there's no other use for
a horse. And he threw up the sideea that maybe
we could go the way of horses. So this is
subject to sort of wild debate and conjecture.
Speaker 2 (54:36):
Then I think finally you mentioned the well, we mentioned
the Reserve Bank, and you mentioned the governor, et cetera.
I want to give you my take very briefly on
central bank digital currencies. And you'd be aware, of course
that the Bank announced that it's goaling it for twenty thirty,
(54:59):
but don't worry about it. It'll be okay, because it'll
still be cash available and you'll still be running in parallel.
Now anybody who believes that, because the only time we've
heard that is after that crash a few weeks back,
and of course that provided a beautiful rebuttal of getting
(55:25):
forgetting a central bank digital currency that they own and control,
and therefore they will have control over each and every
one of our lives in the end. Now that's my feeling.
Freedom is the most important thing in our lives. Without freedom,
forget it. It's all over in my opinion. And I
(55:47):
don't trust Adrian Orr or the next bloke to follow,
or the bank itself in general, or politicians not to
utilize in particularly in cases of emergency, the gradual and
then sped up introduction of a single currency that they
control your thoughts.
Speaker 4 (56:08):
I'm a great fan of cash too, I mean, like you,
it's sort of highly disturbing the idea that the government
and my bank and the accountants virtually know what time
you go to the toilet each day, because they can
trace that you've been to the supermarket and bought some
toilet paper, and every single thing you do is listed
(56:29):
on your godamn you know, set of Internet transactions. So
essentially there's never been a greater loss of privacy as
you know. Ever because of this tracking of of of
all of our habits and and that's the great sort
of story of our age. The Internet companies have available
(56:50):
unprecedented amounts of data and and know exactly what what
what what we're up to. So you know, those are
my thoughts too. That ASH is very important. The Reserve
Bank has said that it supports maintaining ASH. As you said,
the digital currency.
Speaker 3 (57:07):
Is quite a key area in economics.
Speaker 4 (57:10):
Our trading banks West Pakay and z already they have
accounts at the Reserve Bank and they're called the settlements
accounts and that essentially is a digital currency for them.
That's where they hold instead of physical cash that they're
given these accounts that they hold at the central Bank
(57:31):
and the reserve banks. Proposing we can essentially all old
accounts like the trading banks directly.
Speaker 3 (57:38):
At the Reserve bank.
Speaker 4 (57:39):
And maybe that has benefits because then where instead our
accounts at Westpac and Westpac bankrupted, we're up that we
could be up the creek. But if our funds are
held at the Reserve Bank, it's safer.
Speaker 3 (57:52):
So but as you.
Speaker 4 (57:54):
Say, the risk is if that proves to be wildly popular,
maybe it is a move that fear and fewer people
actually sort of even want to have cash, and then
with so few people paying with cash, it just does
gradually disappear, So that could happen.
Speaker 2 (58:10):
I'm very pleased to say that I'm running into more
people who are saying I'm spending cash more than I
used to do because I don't want this coming my way.
Speaker 4 (58:20):
It's interesting, Well, well, of course the banks, if there
is a conspiracy. Of course, the banks probably hate themselves
the idea of cash, because if all key we simply
went to the bank and took out they're spending money
for the week from their check account and just spent
(58:41):
the cash, they wouldn't be paying this godamn rip off
one or two percent of this payWave, a scandal that's
gripping the.
Speaker 3 (58:50):
Nation that they think it's.
Speaker 4 (58:52):
Convenient that every time you flash your card you transfer
a chunk of your money to the banks. So they
just love you paying with plastic and if you paid
with good old fashioned cash, you'd be saving a lot
of your money.
Speaker 2 (59:06):
What a delightful idea, Robert. I've got to say, it's
been a very very pleasant period talking with you, and
maybe we'll do it again sometime. I can only imagine
that when when there is a worthwhile when there is
a worthwhile matter that deserves your attention, you'll say.
Speaker 3 (59:29):
Yes, yes, of course I commit.
Speaker 2 (59:32):
Now, as long as you're not committed there, yeah, committed, Yeah,
all right. I appreciate it was very enjoyable and very informative.
Very good, Thank you, thanks Robert. Now I'm doing it
(01:00:03):
a little differently this year. At the end of the replay,
the usually have a few words to say, and every
year I have to struggle to think up what the
appropriate thing is to put in this particular plot. So
I've decided to give myself a break and do one
that covers all of them. So if you've heard this before,
(01:00:23):
you can turn it off because you've heard it, because
it's going to be the same one for each of
the seven replays. Now, if this is the first one,
then I trust that you're having a wonderful holiday. If
you're not on holiday yet, your time will come. Rest assured.
I have enjoyed doing these because re listening to them myself,
(01:00:44):
I get more out of them and I see things,
or I should say, I hear things that I might
have got slightly wrong or I could have done better,
so it's a learning curve as well. Anyway, we will
be back for the next one a week from this
particular release, unless, of course it's the last one, which
is on the twenty ninth of January, and that'll be
(01:01:07):
the end of this replay series. Add on February five,
we shall return with fresh concept. In the meantime at
any stage, drop us on, drop us on notes if
you've got comment that you'd like to make later at
Newstalks AB dot co dot Enzen and Caroline at NEWSTALKSB
dot co dot enz and we shall talk soon.
Speaker 1 (01:01:34):
Thank you for more from News Talks at B Listen
live on air or online, and keep our shows with
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You're listening to a podcast from news Talks. It be
follow this and our wide range of podcasts now on iHeartRadio.
It's time for all the attitude, all the opinion, all
the information, all the debates of the now the Leighton
Smith Podcast powered by news Talks It be.
Speaker 2 (00:28):
Welcome to the bearest of the Lighton Smith podcast for
the twenty ninth of January, and it is the final
replay in this particular run. We return next week with
some live content. The guest who we're replaying today is
a man named Robert McCulloch, Professor Robert McCulloch from Auckland University.
(00:51):
He has a resume to be envied. He has a
reputation that some people don't envy. In fact, some people
don't like him much because of his well opinions. But
aren't we all like that? He began his tertiary education
at the University of Auckland, continued it at the London
(01:11):
School of Economics and at Princeton University. He was director
of the PhD program at Imperial College, London and he's
been awarded numerous prizes along the way and returned to
New Zealand twelve years ago He is professor of Macroeconomics
at Auckland University and publishes widely, including his own site
(01:32):
Down to Earth Kiwi, which seems to have become more
active recently. I think it coincided with the interview that
we've done that you're about to hear. I may be
presuming too much though, and in spite of his career success,
he appears modest, but with the ability and the intent,
(01:52):
the intent to ruffle feathers. Now. This was a wide
ranging and very enjoyable discussion. A trust that you will
also feel the same Layton Smith. Leverrix is an antihistamine
(02:14):
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(02:35):
is a tiny tablet that unblocks the nose, deals with
itchy eyes, and stops sneezing. Leverrix is an antihistamine made
in Switzerland to the highest quantity, so next time you're
in need of an effective antihistamine, call into the pharmacy
and ask for Leverrix lv Rix Leverrix and always read
(02:56):
the label. Take as directed and if symptoms persist, see
your health professional. Farmer Broker Auckland Robert McCulloch is Professor
of macro Economics at Auckland University. Now he has a
(03:16):
very long resume, but we will stick with the professorship
at the moment because that's all that matters to us.
He is a Kiwi, he's a New Zealander. He's worked
and studied in various universities and places around the world.
Very very impressive. When did you return to By the way,
welcome to the podcast. When did you return to New
(03:37):
Zealand About twelve years ago? Have you been at Auckland
University all that time?
Speaker 3 (03:45):
About a decade?
Speaker 4 (03:46):
And when I left school in university, I work in
Wellington at Reserve Bank of New Zealand for a couple
of years before going abroad.
Speaker 2 (03:55):
How buried are you in the subject of macroeconomics.
Speaker 3 (04:00):
Yeah, well, it's the subject I've been studying for about
twenty thirty years.
Speaker 4 (04:07):
In not just in this country, around around the world,
and I take a great interest not just in economics,
but also.
Speaker 3 (04:17):
Politics as it relates to the subject.
Speaker 4 (04:21):
I used to attend the meetings of the NZET Initiative,
which is this sort of think tank National Party advisor
on behalf of one of their members, the former Bear Baron,
Sir Douglas Myers, who died a number of years ago.
Speaker 3 (04:37):
So I take an interest.
Speaker 4 (04:38):
It's not just sort of public sector but private sector,
quite quite a range as well as politics.
Speaker 2 (04:43):
The Reserve Bank, of course is another interest that you
would have. Yes, so we'll get to the Reserve Bank shortly.
But the state of the country at the moment financially economically,
how do you view it?
Speaker 4 (04:56):
Well, it's not great, of course. Why isn't it great?
A lot of it has to do with how the
country was managed during the COVID years and the finance
minister back then, Robertson, who's popped up as vice chancellor
(05:17):
of Otaga University on six hundred and twenty nine thousand
a year.
Speaker 3 (05:21):
By the way, Grant Robertson assured us.
Speaker 4 (05:25):
That he really staked his reputation on the fact that
he said the COVID policy of the government would create
good health outcomes and good economic outcomes.
Speaker 3 (05:36):
The two went exactly had in hand.
Speaker 4 (05:40):
Well, that's been proven to be false, and that line
was also promoted by Michael Baker at the epidemiologist at
Otaga University.
Speaker 3 (05:52):
That's just not true. As a result.
Speaker 4 (05:55):
Of the policies during the COVID years in which they
Reserve Bank printed fifty billion bucks of cash on top
of a massive fiscal expansion of the government of Robertson
financed by debt, those over the top policies have landed us.
Speaker 3 (06:16):
Have a large part of the responsibility for.
Speaker 4 (06:18):
Landing us in the mess we're currently in, which is
a recession. Westpac economists of predicting it might even be
a triple dip recession.
Speaker 3 (06:29):
And so we're still.
Speaker 4 (06:31):
Emerging from the carnage of those six years of mismanagement
by Grant Robertson. So you know, good luck to Otaga
University because Robinson's been hired by them to sort out
their financial situation, while Grant has left the financial situation
of this country in an utter shambles.
Speaker 2 (06:52):
So you singled him out as far as the government
is concerned, Does the then Prime Minister have a percentage
of responsibility for that?
Speaker 3 (07:02):
Well, of course, because there was this view.
Speaker 4 (07:07):
That they bought into, coming from their advisors like Baker
and Otago. The theme of their government was good health
outcomes go hand in hand with good economic outcomes. They
thought everything they were doing in terms of COVID would
(07:27):
lead to the best.
Speaker 3 (07:29):
Economic outcomes in the world.
Speaker 4 (07:31):
So they argued, we're the best health outcomes and we'd
have the best economic outcomes. Well, funnily enough, America is
currently booming and we're in a recession.
Speaker 3 (07:42):
So heck, that was a bit off, wasn't it?
Speaker 4 (07:45):
And what really stuff the country was towards the end
of twenty twenty one going right Quite recently into twenty
twenty two, Auckland was in a full scale lockdown. So
the city where almost forty percent of the country live,
the hub of much of its economic output, was shut
(08:07):
down and the entire city was locked up. And you
know that, I think took away the mojo of Auckland.
It took away our confidence and Hipkins and a Deern
were largely responsible for that. Seems at some sort of
quite deep level, Hepkins really doesn't like Auckland, and Auckland
(08:29):
doesn't really like him, so it's hard to see how
he could ever really hope being Prime minister again when
he did that to forty percent of the country's population
and stuffed the economy in the process.
Speaker 2 (08:44):
It's a very interesting and I think very accurate take.
But there were other things that contributed to the to
the situation in Auckland. Of course, we'll get onto one
of those. No, we'll get onto a couple of those shortly.
There is another matter that has bugged this country for
a long time, productivity or lack of it. More importantly,
(09:06):
why is it that our product activity has been steamied
for so long and nobody seems to be able to
make what is a worthwhile impact upon it.
Speaker 4 (09:19):
Well, yes, productivity. It's in the news all the time.
It has been for the last twenty odd years. And
my view of that is that the so called experts,
and you know some folks would say, and I'm meant
to be an expert. Well, the government set up the
(09:40):
Productivity Commission, which was focused entirely on that matter, how
to find out what was causing low productivity and how
to fix it, and it's recently been wound up, it's
been abolished by the government. So my view on that is,
if you're briefly honest about it, we still don't know
exactly what has held back productivity growth in the country,
(10:06):
and I think that severe solution. Instead, you have a
different person every week saying they blame red tape. Others
blame how geographic isolation. Some people say there's something wrong
with the tax system and that should be changed. The
(10:31):
Productivity Commission said, where you know, so far away from
our major markets.
Speaker 3 (10:36):
We're a small country.
Speaker 4 (10:37):
But the Productivity Commission ended up listing about twenty different factors,
And in a way, that's unsatisfactory because you really want
to know what's the most important factor, and you know,
a ranking of the factors, what's the thing we should
really focus on.
Speaker 3 (10:55):
Is it, say, red tape?
Speaker 4 (10:56):
And you know David Seymour's going to head up a
new Ministry of regulation to try to cut that. But
is that the main issue or is it something else?
And I think the Productivity Commission failed because it never
really ranked that long list in order of most to
least important. So it is unsatisfactory that for that reason,
(11:21):
because you know, the experts have never definitively identified what
it is. And it's become also confused by the fact
that productivity has been slowing in other countries like the
United States and in Europe that many many of those
countries have been suffering a productivity slow down, and some
(11:43):
of them are pointing to issues like the aging population.
Speaker 3 (11:48):
They're just not as sort of many young.
Speaker 4 (11:50):
People who sort of tend to be more innovative than
older people. So it's incredibly hard to identify exactly what
the cause is. My suspicion in this country over the
last ten or so years is that we've drifted into
(12:11):
not becoming a meritocracy, and the people, the students we have,
the ones who work hardest get the highest grades, they're.
Speaker 3 (12:20):
Not getting the best jobs.
Speaker 4 (12:22):
Other factors are coming into play, and certainly we know
if you try to run a nation where the best
people are not promoted to the top, productivity we know
for a fact in economics is.
Speaker 3 (12:38):
Really going to suffer.
Speaker 4 (12:40):
Market economies are built on rewarding effort and ability. And
so my sort of preferred suspect as to what's holding
us back is we have to get back to a
country where meritocracy is rewarded. And if you look at
the outstanding performance of our athletes, how is the Olympic
team chosen? Is it chosen on sort of other factors
(13:05):
coming into play, on what kind of tea that looks
nice that you want, or is it done on who
got who was the fastest, who was the fastest canoeist,
who was the quickest, who could jump the highest and
high jump. No, they select the team on who was
the best, the highest, the strongest.
Speaker 3 (13:25):
They don't select it on other factors.
Speaker 4 (13:27):
And look at what the Kiwi athletes did, one of
the best performances in the world. So I think I
think as a country we respond to incentives, and I think,
particularly over the last six years, certainly labor virtually destroyed
the idea of meritocracy in the country. I think it's
unforgivable what they did in that respect.
Speaker 3 (13:47):
We have to get back to rewarding merit. That's my view.
Speaker 2 (13:51):
That's I'm not going to prove easy, I feel, but
I very much appreciated you pointing out the dying off
of a certain class of the population. I don't want
to narrow it down, but just the dying off of
an attitude that came out of the Second World War.
If it wasn't there before, uh and and and stayed
(14:14):
for a long time, and then all of us, well
not all of a sudden, but it seemed all of
a sudden you had a different approach from those who
were exiting school going on to to wherever else they
went that lacked lacked an attitude. Now I can I
can point to that in the in the industry or
(14:36):
the business that I've been in, when they've experienced people
are playing for jobs and it's nights or weekends or
a bit of both or whatever. No, no, no, no,
I don't work weekends. I don't work nights. I've got
other things to do. And this has been an attitude.
(14:56):
And the Minuture, the Minuture hear that it's really a
case of I want the corner office. Not did you
have officers anymore in broadcasting, but I want the corner office,
and I want at least three phones and a television,
and by the way, while you're at it, get me
a maid. That's the attitude that has entered the arena,
and I think, I think that's why it's been very
(15:17):
hard to identify it.
Speaker 4 (15:19):
You know, if you're looking at statistics and numbers, it's
very hard to prove it when it's sort of a
cultural change in an attitude. But that's what my suspicion
is it is that kind of attitude change you're changing
or you're describing. You know, I've heard by the way,
it was from the wife whose husband was the former
(15:43):
chief executive of Southern Cross Medical Insurance, so they know
all the sort of doctors in the country. She said,
there is no doctor shortage in the country. That's all
a myth. Apparently the talk is as you say that
a large number of medical school graduates now don't want
to work, you know, five seven days a week. My
(16:07):
dad was a GP works even days a week for
many years when I was growing up. He was on
call frequently in the weekends. Apparently, she said, you know,
a lot of graduates now want to work Tuesday to Thursday,
you know, have these sort of hours of their choosing,
and they're just as an attitude, they don't want to
work like the previous generation did.
Speaker 2 (16:27):
Well, there's another aspect to the medical side of things,
and that is the changes in well the attempted changes
in hospitals by boards of how doctors conduct themselves. And
I have to include, because I can't avoid it, the
(16:49):
racial aspects of it with and I've been shown numerous,
on numerous occasions examples of this where if you are MARI,
then you are entitled to first and more of much
of the health system. And there's no avoiding it. And
I said to very good specialist when he was actually
(17:13):
showing me what he had to deal with, I said,
would you consider leaving the country without breathing? He said yes,
And that probably has led to the belief, well contributed
to the belief that we have a shortage of doctors,
and maybe we have a shortage of specialists. I don't know.
Speaker 4 (17:33):
Yeah, well, the entire health system needs to be changed.
It's not a matter of just changing the person at
the top, like Lester Levy. The entire system has to
be changed. My preferred reform, which I don't think that
the NATS have got the guts to do, is to
keep the single payer structure.
Speaker 3 (17:53):
That we have.
Speaker 4 (17:54):
That as the government pays the bills universal health care
so no one has to worry, but it negotiates prices
at the hospitals for all different procedures. Barmak already does
that with the private drug companies. The medical laboratories are private,
gps are private practices, so the government negotiates prices and
(18:16):
then anyone public or private can offer their services at
those at those prices.
Speaker 3 (18:22):
And if it turns out that.
Speaker 4 (18:25):
Over half of the hill system that people prefer to
go private and over half of it is private suppliers,
and that's fantastic, and the public hospitals maybe become smaller,
or if the public sector is able to outcompete the
private that's great as well. But we need massive influx
(18:47):
of competition, probably a huge expansion of private suppliers. Everyone's covered,
and you can choose whether you go public and private.
But having this system of a single payer, which is fine,
but also essentially single supplier that is the big public hospitals,
you get into all of this mess where them's policies
(19:09):
on all sorts of matters, not just medical help, but
all sorts of ideology of the government creeps into the
supply side, and I think that needs to change.
Speaker 2 (19:21):
I want to back up just a moment, when you
were mentioning the pandemic and the effect that it had
in the reaction to it on both the health and
economic front, what advice would you have because undoubtedly, well
I'm guessing that you woul't ask for any advice, but
what advice would you have given the government if they
(19:43):
if they'd sought it.
Speaker 4 (19:45):
Yeah, well, the government had their chosen advisors. I think
that led to Durn's downfall because she didn't listen to
a range of advice. She just had the advisors who
she loved, and she listened to pretty much everything they
had to say.
Speaker 3 (20:04):
So this isn't with hindsight.
Speaker 4 (20:07):
By the way, Robertson accuse some of us who do
commentary on this as just commenting with the benefit of hindsight.
At the time, I was writing that on the blog
in the papers that given there was such an extraordinary
large fiscal expansion of borrowing financed by borrowing, it was
(20:29):
unnecessary to do such a large monetary expansion as well.
Speaker 3 (20:34):
So at the time my view was that was a
major mistake.
Speaker 4 (20:38):
Of course, the wage substy scheme, that sort of thing
was all good. But when you had the wage substy
scheme in place, why on top of that did you
need to print fifty billion bucks. So I think it's
virtually criminal what the Reserve Bank did. We already had
one of the world's largest fiscal expansions and to put
on top of that one of the world's largest monetary expansions.
(21:00):
So at the time, with all the limited power I have,
which is doing things like your show. I was arguing
one should not do that monetary expansion.
Speaker 3 (21:10):
What did it do?
Speaker 4 (21:11):
It blew up inflation, and then the Reserve Bank governor said,
well we have we have to now engineer recession to
get the inflation I created back down again.
Speaker 3 (21:22):
He actually got that wrong as well. He did an
engineer recession.
Speaker 4 (21:25):
It looks like he's engineered three recessions, and so he
threw the country into a cost of living crisis as
people struggled to pay their mortgages. So I think that
was a fundamental mistake that was made.
Speaker 2 (21:38):
Do you do shopping as in food?
Speaker 3 (21:40):
Yeah? Yeah, yeah.
Speaker 2 (21:41):
Were you constantly aware of the increase in the bill
that you had to pay every time you went shopping?
Speaker 3 (21:50):
Oh?
Speaker 4 (21:50):
Of course, of course. I mean, you know, I have
three children, of course we can. It's just astronomical. The
I think our food bill is probably you know, higher
than the average wage in the in the country. It's
just just for not nomenal and you know that means,
(22:11):
you know, to bring up children now just to pay
the groceries, both parents have to work. You can't you
can't buy grocery bills in a million years in this
country with one parent working on the average wage, you
can't you can't afford food. So of course that was
a Now on that topic, can you believe it that
(22:32):
it's in the news every other day that.
Speaker 3 (22:36):
We have this duopoly with the supermarkets?
Speaker 4 (22:40):
So what did Adarn do in her infinite wisdom during
the lockdowns? He granted the duopoly. The monopoly enshrined in
law that no one else in the country could sell
food during the lockdowns, only the two super big supermarket
(23:01):
chains chain.
Speaker 3 (23:02):
So every small business.
Speaker 4 (23:04):
And grocer got wiped out and that was the law
of the country. So that was another I think economic
policy where a Dern and Hopkins and Robertson enshrined the
power of monopolies in the economy.
Speaker 3 (23:20):
And I still don't think we pulled out of that.
Speaker 2 (23:25):
Do you think that that was just plain ignorance or
did that did that deploy some shall we say socialist approach?
Speaker 4 (23:37):
Yes, I mean the ideology of socialism was there with
just command and control essentially it you know, it's called
an economics command and control regulations that every the idea
was we can sort everything out through by by command.
Speaker 3 (23:58):
And I think in.
Speaker 4 (24:01):
Dern's head the idea was, well, we listened to Baker
at Otago.
Speaker 3 (24:05):
Because he said we should lock down.
Speaker 4 (24:08):
The only practical out of doing that, we grant a
monopoly to the chains. And then, of course, gosh, if
the supermachor chains have made if people like that have
made too much money because of our policy, well we'll
call David Parker and ask him, with mister Pikeaty, how
to design capital and wealth taxes in the country to
get the money back. I mean, this is just a
(24:28):
shambalaquay of conducting, conducting, you know, a country's management.
Speaker 2 (24:35):
Well, shambolic and ignorant.
Speaker 3 (24:37):
Yeah.
Speaker 2 (24:38):
Yeah, I have to slip in here that I did
some economics, and I'm reluctant to do it because I
never finished anything. But I did some economics and my favorite,
my favorite class was comparative economic systems, and it set
(24:59):
me on a path that ended up with me being
in the Soviet Union as it still was in January
of nineteen eighty nine, and I saw firsthand and experience
firsthand as a guest of Navosity Press, all sorts of
aspects of life that we avoided, of course, But how
(25:28):
anybody with the history that socialism has Marxism has I
just don't know how anyone can be a part of it.
It's absurd. Now you want to take any issue with that.
Speaker 4 (25:41):
We'll ask a Dern because she still wildly embraces it,
and of course the Labor Party is wildly embracing it.
So surprisingly, there was some very strong comments earlier this
week anti charter school comments.
Speaker 3 (25:57):
By the Labor Shadow education.
Speaker 4 (26:02):
Spokesperson, and it was sort of a vitriolic spewing of
invector on the idea that privately supplied anything that's privately
supplied was really a sort of horrible idea, and the idea,
even though charter schools are publicly funded, the idea that
(26:22):
private suppliers would run them was just went against everything
the Labor Party stood for, which is amazing to hear
that in twenty twenty four.
Speaker 2 (26:33):
Think that you really think it's amazing, Well maybe not.
Speaker 4 (26:39):
I was surprised because that the only way out of
the mess of not just education but the health system
is that that kind of model of public funding which
ensures equity that regardless whether you're or wealthy, whatever, everyone
can go to a charter school, or regardless of wealth,
(27:02):
you can go to any medical supplier of your choice.
But you, of course, to have competition between public and
private suppliers is a great thing.
Speaker 3 (27:13):
That competition is fantastic.
Speaker 4 (27:16):
So to hear labor coming out anti competition, I find
I find unbelievable.
Speaker 2 (27:22):
Well, I follow the charter school game for the last
few years and done a number of interviews around it,
and it's to me it comes back to the to
the power of the teachers unions essentially.
Speaker 4 (27:38):
Yes, And I mean what struck me was that labor
must really really want the education of young Maori to suffer.
Because President Obama in America, his words were he lauded
charter schools in America as a beacon of hope for
young Black American children. And they also were showing great
(28:01):
results for young Maori children because that model of independence
and you know, you can design the schools policies with
more freedom from the state was showing great results. So
it seems that some level labor really have it in
for the education of young Mari.
Speaker 2 (28:21):
The subject of infrastructure has had a big play in
the last few weeks. It was brought home to me
when I was listening to the radio and heard commentary
with regard to the necessary machinery for infrastructure, and it's
basically all left. All the big stuff has left the
country and getting it back isn't isn't going to be easy.
(28:44):
How much is that going to hinder the development of
well the comeback for this and any other government, let
alone the people.
Speaker 4 (28:55):
Yeah, well, the infrastructure thing has rumbled on, of course for.
Speaker 3 (29:01):
A long time.
Speaker 4 (29:03):
The most important infrastructure is probably the ones of our cities. Surprisingly,
some infrastructure projects like highways can be more controversial.
Speaker 3 (29:16):
In America, there's this.
Speaker 4 (29:19):
Thing called the highway movement, and they want all these
interstate highways to be fantastic, and some urban economists have
been a bit critical of some of that focus. We
invited the world seating urban economists Dead Glazer out here
many years ago, and their priority is to get the
cities right, because the more you have magnificent highways leaving
(29:43):
the cities, that can be responsible for sprawl, you know,
miles out of the cities. It can encourage you know,
less densification. So I think on infrastructure, it's you know,
the cities are vital.
Speaker 3 (29:58):
You know, Auckland's going towards forty percent of.
Speaker 4 (30:02):
The country's population, and the infrastructure of cities like Auckland.
Christ Tish really has to be great to otherwise, if
our big cities fail, the country will fail. So yes,
that's you know, that debate has rumbled on for many years.
Speaker 3 (30:23):
And I mean, what can I do about it?
Speaker 4 (30:26):
A decade ago we invited the world seeding urban economists.
He made all of these points, he met all the
people in government and the council. They ignored every piece
of advice he gave. He told them a decade ago,
you've got to introduce toll roads congestion charges. Now what
ten or twelve years have passed and they're still discussing
(30:47):
congestion charges and tolls.
Speaker 3 (30:51):
I mean, what more can we do?
Speaker 4 (30:52):
We invite the world's experts out, we sit them in
front of Labor and National prime ministers, we carry on
about infrastructure. I used to attend the meetings of the
NZET Initiative.
Speaker 3 (31:04):
I lobbied.
Speaker 4 (31:05):
I remember when John Key was Prime Minister for more
of the spin. They all shut me up. They said,
oh mate, what would you know that? You know, we're
rebuilding christ Church, so we don't have any money for Auckland.
I mean this, whether it's National or Labor, I'm just
I'm just tired of all this bull crap.
Speaker 2 (31:20):
Does that encourage you to think about leaving the country, Oh.
Speaker 3 (31:25):
It doesn't.
Speaker 4 (31:25):
I think it's still a great place to live. Look
the irony of this country in terms of leaving there
is a great almost paradox that we're doing badly on productivity,
but in terms of these quality of life and disease,
which I take quite seriously. How sort of happy people
(31:48):
are in countries, New Zealand has typically been in the
top ten Kiwi's rank is having extremely high levels of
overall quality of life, and you know, thank god that's
the case, even though financially we haven't been doing great
that the overall quality of life is.
Speaker 3 (32:05):
What keeps many of us here.
Speaker 4 (32:09):
And so I think, I think we still have a
very powerful card to play with that overall quality of life.
And if and if our cities are made very you know,
edgy and diverse livabol but also with great opportunities, they're
a real melting pot of innovation and hubs of entrepreneurship
(32:31):
that you know, if we can just get that mix
right with the lifestyle and the proximity to the beaches
and the mild climate, I mean, we still have extraordinary
natural assets, So I think I think that is we
still have reason for hope.
Speaker 2 (32:47):
Well, as somebody said recently, hope isn't the what's the
term hope? Hope is not a plan anyway, Just speaking
of people leaving the country, you must know because you teach,
you must know the number of graduates who are packing
their bags and leaving the country.
Speaker 3 (33:07):
Yeah, that phenomenal.
Speaker 4 (33:09):
I mean most of the ones who've done well typically
say they wouldn't apply for a job here in a
million years, so they're off.
Speaker 3 (33:17):
There is an exodus at that level.
Speaker 4 (33:20):
You know, it's not widely reported in the media sort
of what's driving part of that because it's not even
after people have finished training here. There's an unprecedented move
where people are leaving even after finishing up at school.
So it's not just posh private schools. But if you
look at from McLean's College and Auckland rang A Toto College,
(33:42):
a whole bunch of public and private schools, roughly the
top twenty students from when they're seven eighteen years old
are leaving the country at eighteen and that's a very
young age and they'll probably never come back.
Speaker 3 (33:56):
And so.
Speaker 4 (33:58):
The trend is for increasingly star performers at young ages
to go.
Speaker 3 (34:04):
One of the reasons for that is.
Speaker 4 (34:05):
I think in the name of ecality, even if you
do amazingly at school here, it doesn't really help you
because you can be a star student that everyone just
goes to the local training college, the local university. Everyone
just piles into Victoria or Otago Auckland. Whether you've been
(34:27):
top of your year or Ducks, whether you're a star athlete, whatever, you.
Speaker 3 (34:33):
All just go to the same place.
Speaker 4 (34:34):
The whole point of working hard at school in nearly
every country, from China to India to England to France
the United States, is it sets you up to go
to an amazing college. If you're a sports star in
the US, you get into Stanford because you're an amazing swimmer.
That's the game. So that's what incentivizes people here. You
(34:58):
bust your ass at school, you do great, and then
in the name of egoitarianism, oh, let's just.
Speaker 3 (35:05):
Pretend that never happened.
Speaker 4 (35:06):
Pretend you didn't become a sports star or an academic star.
You know, and if you did, it's probably because you're
from a privileged background. So screw you, and you can
all start the same at university again. Well that I
think that's creating a massive brain grain for the country
because these kids are you know, I think everyone knows
(35:29):
the truth. Now, these are the Ivy League schools in America.
Universities around the world are targeting our star athletes, our
star performances, and they're putting them on full scholarships. So
this isn't happening when they're older. This is happening at eighteen.
We're losing the cream of the country at eighteen years old.
Speaker 2 (35:46):
We are we losing many students to elite universities in
the States. Because I've got to carry I've got it.
Are we losing many.
Speaker 4 (35:55):
Well, I can tell you because the schools I see
are from a range of schools. Now, when they send
their reports, they list down the number of students who
are going to overseas universities, and of the top schools
in Auckland, you'll see roughly the top ten twenty students,
(36:15):
nearly all of them are going to overseas universities.
Speaker 2 (36:18):
See, I've I've got to count you a little, and
I'll be interested in your reaction because there is a
change in America that elite colleges are not worth going
to now. I was reading something just a few days ago,
and let me get this. Right to go to Yale,
(36:40):
for instance, which will cost you something like six hundred
and something on thousand dollars, take that debt, if you've
got to borrow the money, take that debt and work
out how much of your life is going to be
spent repaying that There is a swing away, is what
(37:02):
I'm suggesting from what I've seen in the last few months,
that the kids are kids and their parents recognizing that
the elite universities are now a waste of money because
of their DEI and and all the other alphabet soups.
Speaker 4 (37:19):
Well, the key we kids this top group, this elite group,
which you know, by the way, for a small country
like us, it's devastating. They're they're being offered full scholarships.
They're not paying anything. So if you're a top tennis player,
swimmer row, you know that they are coming out and
(37:41):
fully funding you. So I don't think many would turn
down a full you know, in fact, they've been given
six hundred thousand by the likes of Yale.
Speaker 2 (37:51):
I wouldn't I would, I wouldn't argue with you on
that at all. It's it's just it's the home team
that seems to be seems to be reacting anyway.
Speaker 4 (38:00):
By the way, By the way, a large group, the majority,
are piling into the Australian universities, so that's sort of
a well known fact.
Speaker 3 (38:09):
They're piling into Melbourne and Sydney.
Speaker 4 (38:12):
Melbourne's got a world sort of roughly top ten ranked university,
I don't know, it's sort of sixteenth in the world
or something, and they've become enormously attractive to chew students.
I think Chris Suckson's daughter, he was in the paper
going to her graduation in Melbourne. That's a very large
part of the scene.
Speaker 2 (38:31):
Now interesting because there was another little home event. One
of my boys we went in twenty ten to when
he was stort school. At the end, we went to Melbourne,
we did interviews, he was accepted into law and he
(38:54):
was accepted into the only house that he wanted to
stay in to live in color College, and we were
and looked at it. It was stunning. But in the
end he decided to go to a target. Hm hmm.
I think it had I think it had as much
to do with mates as.
Speaker 3 (39:13):
He might have.
Speaker 4 (39:13):
He might have made he might have made a mistake.
I mean, I call Otago the party university. So I
trust that wasn't his motive.
Speaker 2 (39:20):
No I can. I can tell you it wasn't, But
that doesn't mean he didn't fringe on it. Look expanding
some of the some of the matters that we've already discussed. Infrastructure,
for instance, the state of the of the biggest city
in the country is still disastrous, still appalling. I've forgotten
(39:42):
now how many more years the underground is going to take.
I've also forgotten what the latest pricing is. All I
know is that, as expected from the beginning, it's blown
out of all proportioned to what it was going to
cost in the first place. Anybody with any vision an
experience watching the cost of large scale infrastructure could have
(40:07):
could have told that. But it has anyway. They they're
still in a state of flux. They've ruined Queen Street,
They've ruined Custom Street and Key Street. They've they've screwed
up just about everything and wild there's been a bit
of a reprise for Smith and Coey. The big historic
(40:30):
store is no more and people are not even wanting
to live in the city now. So where does that where?
Does that leave us with regard to our discussion. Let
me make a suggestion. Auckland Transport, which I've termed the
biggest example of the administrative state in this country, has
(40:51):
has contributed to the wreck that Auckland CBD has become.
And they're still not overdoing it. They still want more.
Speaker 4 (41:01):
You say, yeah, look, you know it's it's it's just
leaves your speechless. The Empire State Building, by the way,
from before the spot that was in the nineteen twenties
in America, from before the site even the foundations.
Speaker 3 (41:18):
Were dug, it was just flat land. From the time the.
Speaker 4 (41:24):
Starting date where the foundations were dug to the opening
of the Empire State Building is a completed building.
Speaker 3 (41:30):
Do you know how that take a guess? How long
was that?
Speaker 2 (41:35):
Three years?
Speaker 3 (41:37):
Fifteen months?
Speaker 2 (41:39):
I knew it was now, but I didn't realize it
that quick.
Speaker 3 (41:42):
Yeah.
Speaker 4 (41:42):
So then you take a look at lovely, our lovely
Fletcher Building putting up the Convention Center, which is about
one percent zero point one percent the size of the
Empire State Building coming up for what ten years, coming
up for ten years. Fletchers can't even put up a
tiny little building in ten years. And then they blame
(42:04):
a fire, and everyone blames everyone, and it just descends
into the usual blame game of the leaky home crisis
and god knows what so's It's a disgrace, isn't it.
And Auckland Transport, I mean, what an organization. Obviously in
its current form it should be disbanded. The mirror is
right via the whole board. But the catch crow of
(42:28):
the American Revolution was no taxation without representation.
Speaker 3 (42:33):
So where does it?
Speaker 4 (42:35):
Organ Transport get its money from our taxes? But we're
not represented by it. It's not responsive to what the
people want. We all keepe its guts. It's got an
approval rating of like negative one hundred, and the whole
thing should go. So either it's put more directly under
the control, directly under the control of the mayor, the
(42:56):
council or the minister, and emergency action is taken. You know,
maybe there is some reason for optimism. Although people critique
Chris lux And for being a CEO and knowing more
about sort of management maybe than governing a country, maybe
it's a good thing. Maybe if he can go through
(43:17):
all these organizations with a fine tooth comb, get rid
of the boards. You know, they've done that in the
health end Z and he can look at the way
all of these things are running like divisions of a company,
and he can get things running more efficiently and the
reporting lines changed.
Speaker 3 (43:36):
Maybe, you know, he could prove to be a very
good leader.
Speaker 4 (43:40):
Maybe that is what the country does need, are some
you know, competent manager going through the shambles of these organizations.
If you look at the board of Auckland Transport, a
lot of them seem to be showing off saying we're
on the boards of ten other companies and directors.
Speaker 3 (43:56):
I mean, what is this?
Speaker 4 (43:57):
What is this old style kei we game where you know,
at cocktail parties and social scenes you say, oh, I'm
on the board of ten companies. Well, obviously they don't
have time for any one of them. It's sort of
a social game in this country to be on these boards.
And then you take twenty thirty forty fifty thousand for
each board, and when you multiply it by ten boards,
(44:18):
you're on five hundred thousand dollars a year for doing nothing.
So I think there needs to be a really a
real change in the way that Fletcher's Boards, by the way,
is no better Fletcher Building so there needs to be
a change in the way that the governance has done
and let's trust that Luxon will take aim at all
these places and sort them out in the next couple
(44:40):
of years.
Speaker 2 (44:40):
All right, off the back of people leaving the country,
have got the have we got the intellect left behind
who can achieve the things that you're talking of.
Speaker 4 (44:52):
Well, we've got to fall back on this fact that
we were in the top ten in the world in
quality of life, and so we've got that to back
us up. It's promoting I think, you know, in the
famous words of John F.
Speaker 3 (45:05):
Kennedy, you know, a new generation.
Speaker 4 (45:07):
We've got to take some risks and bets on the
new talent coming through and you know, put them in positions,
often of power, and get the best offer someone who
might be thinking of leaving the country the top position
to sort out these sorts of these sorts of places,
not the usual boring suspects of you know, there's a
(45:30):
chairman of one of New Zealand's largest public companies that
I bought a product from. I can't name his name
or you get sued, but it broke and they blame
me for it. And I went to cirk and after
a month or two I got in touch with the
chairman of this major public company and virtually he'specially uncontactable.
And then I discovered where he's living. He's living in Wanaka,
(45:51):
for God's sake, skiing half the day, barting around. I mean,
is this the new Zealand? We want this old style
thing where you're on the boards of twenty companies. Nothing's
running properly, you're basing yourself online and Wanaka. I think
there does need an added hudent culture shift and let's
trust that Chris Hucksen will try to sort it out.
Speaker 2 (46:13):
Watch this space very carefully. There's a couple of things
that I want to I want to spring on you
and if it's if it's not your field, then just
say so. But I'm first, first of all intrigued with
what your feelings might be about artificial intelligence.
Speaker 4 (46:33):
Well, yeah, my feelings are that it is is probably
going to be a revolutionary technology.
Speaker 3 (46:41):
I'll tell you my sources for this.
Speaker 4 (46:45):
I met about six or seven years ago Shane leg
who's a key we born and rot Rua who's in
charge of Google's worldwide efforts to.
Speaker 3 (46:59):
Advance artificial intelligence.
Speaker 4 (47:01):
And Shane Legg's company, deep Mind was really the company
that started the AI revolution, so remarkable that we have
a kiwi. He sold that to Google one hundred million pounds.
It was backed by Peter Teal, who's a New Zealand citizen.
He was the first investor. So leg is part of
that musk sort of Teal group. He's a classic case
(47:24):
of a talented kiwi who is not returning to the
country and is based in London. But obviously he's no
fool and he's absolutely convinced that this is a revolutionary technology, which, ironically,
going back to your productivity issue, if it is a
lot of those issue issues could melt away to the
(47:47):
extent it transforms our lives. The other point of view,
there is a counterpoint of view. I have a friend,
James Lowry, who was sort of another example of our
brain drain. He was ducks of his school all the
way through New Zealand and then he left. He lives
in New York, also working for Google, and I asked
him about this question. He comes out here a lot.
(48:10):
He was a bit more skeptical. He said that many
people are using it more as a toy. He used
the word toy to describe it. And it's still yet
to prove its sort of practical applicability. And I see
a certain resonance with what James Srry is saying that
you know, many people are saying, oh, isn't it cool
what AI can do? But it's a bit has that aspect.
(48:31):
Isn't it fun? It's like a game, It's like a toy.
So you know you've got shame leg and this other
point of view, but certainly it's a shame New Zealand
can't get more involved in this technology through people like
Shame and also Peter tal But of course the christ
Church judge went and told Eel that she didn't want
(48:53):
to building houses in the South Island and to you.
Speaker 3 (48:56):
Know, go jump in Lake Wanaka. And you know what
a jerk he want.
Speaker 4 (49:00):
For trying to build the most environmentally friendly house in
the South Island. So being a libertarian, I don't think
he'll spend much time here. So good on the christ
Church much he decided to you know, reject his house.
Speaker 2 (49:12):
Well there's another matter we could have discussed. But activist
activist judges, I want to just counter you gently with
something I read this morning. We continually hear from globalists
at the World Economic Forum and other elitist institutions that
AI is the catalyst for the Fourth Industrial Revolution, a
(49:36):
technological singularity that will supposedly change every aspect of our
society forever. I keep waiting for the moment that AI
does something significant in terms of advancing human knowledge or
making our lives better. The moment never comes. In fact,
the globalists keep moving the goldpost for what AI really is.
I would note that the w e f zalots like
(50:01):
Juvel Harari talk about AI like it is the rise
of an all powerful deity. Yet Harari has also recently
downplayed AI as a sentient intelligence. He argues that it
does not need to achieve self awareness or consciousness in
(50:21):
order to be considered a super super being or living entity.
He even suggests that the popular image of a terminator
like AI with individual agency and desire is not a
legitimate expectation. In other words, AI as it stands today
is nothing more than a mindless algorithm, and thus it
(50:43):
is not AI. He goes on for a few pages,
what do you think.
Speaker 4 (50:50):
Well, there is a debate about this, of course, going around,
and because it's so new, it is still a debate.
Of course, we don't know, at least if you fall
back on we fall back on our economics.
Speaker 3 (51:07):
It's not the first time there's been the possibility of
a huge change in technology.
Speaker 4 (51:14):
Because one of the most studied episodes in the subject
of the Industrial Revolution in England and you know, in
the seventeenth eighteenth century, and that did transform life, you know,
so that the Industrial Age is obviously a big part
of our history. It turned Britain into the world's leading
(51:35):
superpower of its time. That was really responsible for the
British Empire. It had the largest GDP in the world,
and the steam engine and all those inventions did transform
a human life. So these things do happen, and you know,
if you listen to I've listened to. My source is
(51:58):
Shane leg who I spoke to a number of years ago,
and he's convinced it amounts to a revolution. He's absolutely convinced.
And he there's a book called Soulful Machines. I think
on the topic of what you were saying of can
these machines.
Speaker 3 (52:13):
Have a soul?
Speaker 4 (52:15):
There is a I'll try to fall back on the
debate because heck, you know, it's not my field of
expertise on specifically a bit more the economic consequences.
Speaker 3 (52:26):
There's a chap that in America who is.
Speaker 4 (52:30):
Sort of the big name economist works in this field
of technological progress and change, and a guy Darren as Moglin's.
Speaker 3 (52:41):
He says he's.
Speaker 4 (52:42):
Concerned about AI because he said they seem to be
designing it to replicate.
Speaker 3 (52:47):
What humans do.
Speaker 4 (52:49):
And he says, the thing is technology should really be
supporting what we do. It should be making human life
better and enabling humans to be more productive. And when
humans work with machines that make them more productive, that
leads to higher wages because your your labor productivity goes
up the more capital you're working with. It enhances what
(53:12):
you can do as a human. And he doesn't like
the idea that sort of the AI people are trying
to not complement what humans do but substitute for them,
almost like say, you know, sucked in, you're a human,
but here this machine can talk better than you, write
better than you, and even the robots, like the Terminator,
(53:33):
they look like you. And he's sort of a bit disturbed,
like what's going on where they're trying to copy and
substitute for what humans do, which could make more humans unemployed.
We asked another economist out about eight years ago called
Larry Popley cough from America. And you may think it's
(53:54):
a bit funny, but he made this comment on what
technology can do.
Speaker 3 (54:00):
By comparing humans with horses.
Speaker 4 (54:02):
Apparently there were apparently one hundred years ago there was
something like a million working horses. I think tens tens
of millions of working horses in America.
Speaker 3 (54:11):
Now there are only a few hundred.
Speaker 4 (54:13):
Thousand, because once they invented the car and all these
sort of technologies, there was nothing for horses to do anymore.
So there's only a handful of horses in America that
are mainly race horses, and there's no other use for
a horse. And he threw up the sideea that maybe
we could go the way of horses. So this is
subject to sort of wild debate and conjecture.
Speaker 2 (54:36):
Then I think finally you mentioned the well, we mentioned
the Reserve Bank, and you mentioned the governor, et cetera.
I want to give you my take very briefly on
central bank digital currencies. And you'd be aware, of course
that the Bank announced that it's goaling it for twenty thirty,
(54:59):
but don't worry about it. It'll be okay, because it'll
still be cash available and you'll still be running in parallel.
Now anybody who believes that, because the only time we've
heard that is after that crash a few weeks back,
and of course that provided a beautiful rebuttal of getting
(55:25):
forgetting a central bank digital currency that they own and control,
and therefore they will have control over each and every
one of our lives in the end. Now that's my feeling.
Freedom is the most important thing in our lives. Without freedom,
forget it. It's all over in my opinion. And I
(55:47):
don't trust Adrian Orr or the next bloke to follow,
or the bank itself in general, or politicians not to
utilize in particularly in cases of emergency, the gradual and
then sped up introduction of a single currency that they
control your thoughts.
Speaker 4 (56:08):
I'm a great fan of cash too, I mean, like you,
it's sort of highly disturbing the idea that the government
and my bank and the accountants virtually know what time
you go to the toilet each day, because they can
trace that you've been to the supermarket and bought some
toilet paper, and every single thing you do is listed
(56:29):
on your godamn you know, set of Internet transactions. So
essentially there's never been a greater loss of privacy as
you know. Ever because of this tracking of of of
all of our habits and and that's the great sort
of story of our age. The Internet companies have available
(56:50):
unprecedented amounts of data and and know exactly what what
what what we're up to. So you know, those are
my thoughts too. That ASH is very important. The Reserve
Bank has said that it supports maintaining ASH. As you said,
the digital currency.
Speaker 3 (57:07):
Is quite a key area in economics.
Speaker 4 (57:10):
Our trading banks West Pakay and z already they have
accounts at the Reserve Bank and they're called the settlements
accounts and that essentially is a digital currency for them.
That's where they hold instead of physical cash that they're
given these accounts that they hold at the central Bank
(57:31):
and the reserve banks. Proposing we can essentially all old
accounts like the trading banks directly.
Speaker 3 (57:38):
At the Reserve bank.
Speaker 4 (57:39):
And maybe that has benefits because then where instead our
accounts at Westpac and Westpac bankrupted, we're up that we
could be up the creek. But if our funds are
held at the Reserve Bank, it's safer.
Speaker 3 (57:52):
So but as you.
Speaker 4 (57:54):
Say, the risk is if that proves to be wildly popular,
maybe it is a move that fear and fewer people
actually sort of even want to have cash, and then
with so few people paying with cash, it just does
gradually disappear, So that could happen.
Speaker 2 (58:10):
I'm very pleased to say that I'm running into more
people who are saying I'm spending cash more than I
used to do because I don't want this coming my way.
Speaker 4 (58:20):
It's interesting, Well, well, of course the banks, if there
is a conspiracy. Of course, the banks probably hate themselves
the idea of cash, because if all key we simply
went to the bank and took out they're spending money
for the week from their check account and just spent
(58:41):
the cash, they wouldn't be paying this godamn rip off
one or two percent of this payWave, a scandal that's
gripping the.
Speaker 3 (58:50):
Nation that they think it's.
Speaker 4 (58:52):
Convenient that every time you flash your card you transfer
a chunk of your money to the banks. So they
just love you paying with plastic and if you paid
with good old fashioned cash, you'd be saving a lot
of your money.
Speaker 2 (59:06):
What a delightful idea, Robert. I've got to say, it's
been a very very pleasant period talking with you, and
maybe we'll do it again sometime. I can only imagine
that when when there is a worthwhile when there is
a worthwhile matter that deserves your attention, you'll say.
Speaker 3 (59:29):
Yes, yes, of course I commit.
Speaker 2 (59:32):
Now, as long as you're not committed there, yeah, committed, Yeah,
all right. I appreciate it was very enjoyable and very informative.
Very good, Thank you, thanks Robert. Now I'm doing it
(01:00:03):
a little differently this year. At the end of the replay,
the usually have a few words to say, and every
year I have to struggle to think up what the
appropriate thing is to put in this particular plot. So
I've decided to give myself a break and do one
that covers all of them. So if you've heard this before,
(01:00:23):
you can turn it off because you've heard it, because
it's going to be the same one for each of
the seven replays. Now, if this is the first one,
then I trust that you're having a wonderful holiday. If
you're not on holiday yet, your time will come. Rest assured.
I have enjoyed doing these because re listening to them myself,
(01:00:44):
I get more out of them and I see things,
or I should say, I hear things that I might
have got slightly wrong or I could have done better,
so it's a learning curve as well. Anyway, we will
be back for the next one a week from this
particular release, unless, of course it's the last one, which
is on the twenty ninth of January, and that'll be
(01:01:07):
the end of this replay series. Add on February five,
we shall return with fresh concept. In the meantime at
any stage, drop us on, drop us on notes if
you've got comment that you'd like to make later at
Newstalks AB dot co dot Enzen and Caroline at NEWSTALKSB
dot co dot enz and we shall talk soon.
Speaker 1 (01:01:34):
Thank you for more from News Talks at B Listen
live on air or online, and keep our shows with
you wherever you go with our podcasts on iHeartRadio
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