July 20, 2025 • 10 mins
Inflation is back on the rise, with an annual inflation rate of 2.7% in the year to June, up from 2.5% in the year to March.
What will be going through the minds of the economics wonks at the Reserve Bank - and are we still in line for another rate cut next month with this news?
Newstalk ZB political editor Jason Walls joined Nick Mills for the Beehive Buzz.
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Speaker 1 (00:07):
You're listening to the Wellington Mornings podcast with Nick Mills
from News Talk.
Speaker 2 (00:11):
Said b.
Speaker 1 (00:13):
Direct from news Talk, said Be's team at tolimans the
Beehive buzzy.
Speaker 2 (00:19):
Bus joining us for the bee Hive Buzzes news Talk,
said Bees political editor Jason Walls Live at the Beehive.
Good morning, Jayce.
Speaker 3 (00:31):
Live at the Beehive. Indeed, Hello, Nick, carry you great?
Speaker 2 (00:34):
Thanks? How was your weekend? You're good?
Speaker 3 (00:37):
I'm good. I'm good. I had a great weekend.
Speaker 4 (00:38):
Actually, a lot of my friends have had babies, so
I've spent the last couple of weeks just cuddling babies,
which is quite nice.
Speaker 3 (00:44):
So they're very cute and once you.
Speaker 4 (00:45):
Get past the whole do not drop it, do not
drop it, stay still and the anxiety of all of that,
it's actually quite nice.
Speaker 3 (00:51):
Although I'd never dropped the baby.
Speaker 4 (00:52):
Of course, I'm always sitting next to always sitting on
a couch or something like that.
Speaker 3 (00:56):
But it's beautiful. It's nice. That's where I'm at with
my life right now.
Speaker 2 (01:00):
I cannot think of as you holding a baby anyway?
Speaker 3 (01:04):
Why not? What's as to mean? I did? Now?
Speaker 2 (01:09):
We have this report on in Cea which we talked
about this morning. What's the government saying, what are they
going to do? It's just you know, to talk at
the moment, isn't it.
Speaker 4 (01:20):
Well, yeah, technically everything's talk till action comes. But you're
right to say that because you know, and Hosking was
making the point with lux in this morning, there is
a lot of talk about things to come, and then
it seems rather a long time that we have to
wait for things to come. But this report was presented
to Erica Stanford by education officials in June and comes
ahead of what is expected to be a somewhat substantial
(01:42):
amount of changes to New Zealand's education system. So among
the red light alerts in this reports to the Minister
is that the flexibility that is in the moment built
into NCEA, including regarding what assessment students sit, means courses
can be structured around those perceived to be quote easier
to accumulate credits, and clearly that is something that they've
(02:05):
identified as concern and the system, it says, also encourages
students to stockpile credit, soften disconnected subjects, you know, at
at the expense of engaging in coherent courses that support
clear pathway for the future. That's according to the briefing.
So there's quite a few concerns on this, So that's
why the Prime Minister was asked about it on Hosking
(02:28):
this morning and here's what he said.
Speaker 5 (02:30):
There's nothing more important than getting our kids well educated.
I speak to a lot of parents, teachers, principles. They
have really serious concerns about NCAA and the danger as
you can go through an exercise where you reassured that
you're getting well educated because you're getting different getting through
the NCAA system. But the thing for me and for
the parents and teachers that I run into is are
(02:50):
our kids at fifteen sixteen as well educated as their
counterparts in Australia or Canada or Ireland or something else
we went to.
Speaker 1 (02:56):
We can't.
Speaker 5 (02:57):
It's got to be globally comparable.
Speaker 4 (02:59):
So that doesn't sound like a man who's keen to
remain with the status quote. So the question is when
will the changes come?
Speaker 2 (03:04):
So it will be announced this yes.
Speaker 3 (03:07):
So that's all we got. Basically, we didn't get anymore.
Speaker 4 (03:10):
Basically, it's a wait and see to when the changes
are announce and what's to follow.
Speaker 3 (03:15):
So your guess is as good as mine. But we'll
have to wait for Erica Stamford.
Speaker 2 (03:18):
You know, I'm getting slightly concerned of a statement. I mean,
just something in my mind has changed for the sake
of change. Now, I want kids to be sitting exams
and I want education to be as strong as possible.
But I don't want to be done that for to
be done just because it's a new policy.
Speaker 3 (03:38):
Yeah.
Speaker 4 (03:38):
I mean, you rest assured though that there are millions
of people at the Ministry of Education who are obviously
working on this, and the Erica Stamford's probably put the
fear of God in them to make sure that it's
a system that is, you know, well structured and robust
for the future going forward. So I look forward to
seeing what that is, because you know, I was doing
NCAA a lot sooner than you were, neck in terms
(03:59):
of my proximity to high school, and I remember, yeah,
it was a bit of a doozy at times.
Speaker 2 (04:04):
Okay, the government's talked up the six billion dollar infrastructure
spend yesterday. How much of this is actually yours? How
much of this is just regurgitated to spend money and
try and get the economy going.
Speaker 4 (04:15):
Yeah, well, I was talking to Azaria this morning in
my office, who was one of the most fantastic reporters
in Wellington, as you well know because you work with her,
and we were just kind of talking about how the
infrastructure stories are really hard because they just keep saying
billions of dollars here, billions of dollars there over this timeframe,
and it doesn't it doesn't really seem no matter what
government it is, there's always announcement of it. But according
(04:37):
to Kieran McNalty, he said that there was nothing new
in the announcement yesterday.
Speaker 3 (04:41):
People. This is him saying this.
Speaker 4 (04:43):
People knew that this was happening, and some of it
was actually started under the previous government. What the infrastructure
sector actually wants is certainty. Then he goes on to
talk about how many construction workers have been lost overseas
and he says today's re announcement isn't going to help
any of those people. So he's making the point that
this was just a strive for a little bit of
(05:04):
some some headlines for the government. I just essentially re
announcing what's already been announced. So I mean, you know,
there was things in there such as the Wellington's Hot
Hot Valley Mental Health Unit in Wellington was now was
you know reference, so was the Parliamentary Library and other
ones across the country as well. So you know, Kieran
isn't happy with this, but you know there was Nikola
(05:25):
Willis and Chris Bishop talking about how was it going
to help the economy, et cetera, et cetera.
Speaker 1 (05:34):
This is news talks end the breaking news.
Speaker 2 (05:39):
In breaking news. Inflation is on the rise again latest stats.
New Zealand figures showed consumer price index rows two point
seven percent in the year to June. That's up from
two point five percent in the year to March. Economists
were expecting today's figures to land between two point six
and two point nine percent. The inflation rate is expected
(06:01):
to rise even higher this quarter before again easing late
in the year. Jason will was your thoughts on.
Speaker 4 (06:09):
That, Yeah, I mean they'll be happy economists around the
country and especially the Reserve Bank that we didn't see
that number nudge above three percent. You'll understand, of course
that the Reserve Bank has within their mandate to keep
inflation between one and three percent, So seeing that it
is not at the top of that band yet, two
point seven is actually sort of the midpoint of where
(06:30):
economists were expecting it to be. It's actually quite good
news there and no need to panic, no need to
get to alarm stations at this point.
Speaker 3 (06:38):
As you mentioned there, there is some.
Speaker 4 (06:40):
Expectation that it's going to continue to rise for a
little bit, but that is not going to get the
Reserve Bank or today's number isn't going to get the
Reserve Bank thinking about maybe easing any potential cuts that
they have to the official cash rate. And it looks
like given this number today, all things are going to
go ahead as expected. And yeah, essentially two point seven.
(07:01):
As you said, it's between what the economists were expecting.
Speaker 2 (07:04):
I heard this morning, and I'm not sure whether it
was Ryan or Mike's show, but I heard this morning
that if this stayed roundabout the same, which it has,
you know, it's not dress thic that the interest rates
still we could still see some cuts, you know, in
the next you know, in the next announcement. Do you
do you agree with that?
Speaker 4 (07:21):
Yeah, I mean we had Sharon Zolner talking to Hosking
this morning saying they were expecting one not just in August,
but in November as well, and sort of the main
caveat around that, of course, was today's consumer price index
aka inflation. If we'd seen today's number be a bit
of a runaway, say over that three percent, you probably
would have seen economists start to soften that position and
(07:43):
say that they were thinking, well, hang on a second,
the Reserve Bank might hold off any of those cuts
just so they can get a clearer picture of.
Speaker 3 (07:51):
What where the economy is running.
Speaker 4 (07:52):
But given today is broadly in line with expectations, in
fact a little bit lower than the market rate, which
is between two point eight and two point nine, I
think then it means that everything is probably going to
proceed as Sharon expects it to.
Speaker 2 (08:05):
You know, feels to me in real life, Jace, it
feels to me that it was higher than that. I
really did, you know. I know, we're in the middle
of winter and tomatoes are extremely expensive and all the
you know, BROCCOLI's expensive and everything's expended. Butter is going through.
I mean, that's nothing to do with winter, but butter's
going up. I thought it was going to be higher.
Speaker 4 (08:24):
Yeah, And I think that there'd be a lot of
people out there thinking the same thing, because we do
get to this time in the year where some of
those staples that you're buying every single week, just like
your tomatoes or your carrots or the butter have gone
up exponentially, and we do get those consistent grocery price
reports that show prices are still going up. But that's
just one part of the consumer Price Index, which is
(08:46):
a basket of goods that the Stats New Zealand measures
every quarter. And I can understand people's inflation expectations probably
will be higher than what it actually is right now.
Same thing when we get to summer, where some of
those more seasonable, seasonable vegetables and fruits that we buy
are a little bit cheaper. So it just goes to show,
you know, it's not as easy peck as some of
(09:07):
us punters like you myself might think.
Speaker 2 (09:09):
Real life people. Jason, in thirty seconds or less, can
you please tell me what's happening in the beehive this week? Please?
Speaker 4 (09:16):
Oh, well, we've got the Prime Minister's press conference later today.
We'll be all across that one as he sort of
previews what's happening for the week, and of course we've
got the usual hustle and bustle of question time, and
we've got a number of bills passing through the House
this week. I usually get a briefing a little bit
the leader and the date to see what those are.
But you can be you can bet your bottom dollar
that it's going to be another week of fun and
(09:37):
another week where we might want to forecast what's happening,
but we actually have no idea.
Speaker 2 (09:41):
They have actually no idea. Let's leave it there, no idea.
Neither of us they've got any idea. Jason Walls, thank
you appreciate. I know that you've got a hell of
a big idea. I know you've got lots of ideas,
so I'm not going to leave it there. Jason Walls,
our news Talk said be political edit. Thank you very much.
Speaker 1 (09:59):
For more from Wellington Mornings with Nick Mills, listen live
to news Talks It'd be Wellington from nine am weekdays,
or follow the podcast on iHeartRadio.
You're listening to the Wellington Mornings podcast with Nick Mills
from News Talk.
Speaker 2 (00:11):
Said b.
Speaker 1 (00:13):
Direct from news Talk, said Be's team at tolimans the
Beehive buzzy.
Speaker 2 (00:19):
Bus joining us for the bee Hive Buzzes news Talk,
said Bees political editor Jason Walls Live at the Beehive.
Good morning, Jayce.
Speaker 3 (00:31):
Live at the Beehive. Indeed, Hello, Nick, carry you great?
Speaker 2 (00:34):
Thanks? How was your weekend? You're good?
Speaker 3 (00:37):
I'm good. I'm good. I had a great weekend.
Speaker 4 (00:38):
Actually, a lot of my friends have had babies, so
I've spent the last couple of weeks just cuddling babies,
which is quite nice.
Speaker 3 (00:44):
So they're very cute and once you.
Speaker 4 (00:45):
Get past the whole do not drop it, do not
drop it, stay still and the anxiety of all of that,
it's actually quite nice.
Speaker 3 (00:51):
Although I'd never dropped the baby.
Speaker 4 (00:52):
Of course, I'm always sitting next to always sitting on
a couch or something like that.
Speaker 3 (00:56):
But it's beautiful. It's nice. That's where I'm at with
my life right now.
Speaker 2 (01:00):
I cannot think of as you holding a baby anyway?
Speaker 3 (01:04):
Why not? What's as to mean? I did? Now?
Speaker 2 (01:09):
We have this report on in Cea which we talked
about this morning. What's the government saying, what are they
going to do? It's just you know, to talk at
the moment, isn't it.
Speaker 4 (01:20):
Well, yeah, technically everything's talk till action comes. But you're
right to say that because you know, and Hosking was
making the point with lux in this morning, there is
a lot of talk about things to come, and then
it seems rather a long time that we have to
wait for things to come. But this report was presented
to Erica Stanford by education officials in June and comes
ahead of what is expected to be a somewhat substantial
(01:42):
amount of changes to New Zealand's education system. So among
the red light alerts in this reports to the Minister
is that the flexibility that is in the moment built
into NCEA, including regarding what assessment students sit, means courses
can be structured around those perceived to be quote easier
to accumulate credits, and clearly that is something that they've
(02:05):
identified as concern and the system, it says, also encourages
students to stockpile credit, soften disconnected subjects, you know, at
at the expense of engaging in coherent courses that support
clear pathway for the future. That's according to the briefing.
So there's quite a few concerns on this, So that's
why the Prime Minister was asked about it on Hosking
(02:28):
this morning and here's what he said.
Speaker 5 (02:30):
There's nothing more important than getting our kids well educated.
I speak to a lot of parents, teachers, principles. They
have really serious concerns about NCAA and the danger as
you can go through an exercise where you reassured that
you're getting well educated because you're getting different getting through
the NCAA system. But the thing for me and for
the parents and teachers that I run into is are
(02:50):
our kids at fifteen sixteen as well educated as their
counterparts in Australia or Canada or Ireland or something else
we went to.
Speaker 1 (02:56):
We can't.
Speaker 5 (02:57):
It's got to be globally comparable.
Speaker 4 (02:59):
So that doesn't sound like a man who's keen to
remain with the status quote. So the question is when
will the changes come?
Speaker 2 (03:04):
So it will be announced this yes.
Speaker 3 (03:07):
So that's all we got. Basically, we didn't get anymore.
Speaker 4 (03:10):
Basically, it's a wait and see to when the changes
are announce and what's to follow.
Speaker 3 (03:15):
So your guess is as good as mine. But we'll
have to wait for Erica Stamford.
Speaker 2 (03:18):
You know, I'm getting slightly concerned of a statement. I mean,
just something in my mind has changed for the sake
of change. Now, I want kids to be sitting exams
and I want education to be as strong as possible.
But I don't want to be done that for to
be done just because it's a new policy.
Speaker 3 (03:38):
Yeah.
Speaker 4 (03:38):
I mean, you rest assured though that there are millions
of people at the Ministry of Education who are obviously
working on this, and the Erica Stamford's probably put the
fear of God in them to make sure that it's
a system that is, you know, well structured and robust
for the future going forward. So I look forward to
seeing what that is, because you know, I was doing
NCAA a lot sooner than you were, neck in terms
(03:59):
of my proximity to high school, and I remember, yeah,
it was a bit of a doozy at times.
Speaker 2 (04:04):
Okay, the government's talked up the six billion dollar infrastructure
spend yesterday. How much of this is actually yours? How
much of this is just regurgitated to spend money and
try and get the economy going.
Speaker 4 (04:15):
Yeah, well, I was talking to Azaria this morning in
my office, who was one of the most fantastic reporters
in Wellington, as you well know because you work with her,
and we were just kind of talking about how the
infrastructure stories are really hard because they just keep saying
billions of dollars here, billions of dollars there over this timeframe,
and it doesn't it doesn't really seem no matter what
government it is, there's always announcement of it. But according
(04:37):
to Kieran McNalty, he said that there was nothing new
in the announcement yesterday.
Speaker 3 (04:41):
People. This is him saying this.
Speaker 4 (04:43):
People knew that this was happening, and some of it
was actually started under the previous government. What the infrastructure
sector actually wants is certainty. Then he goes on to
talk about how many construction workers have been lost overseas
and he says today's re announcement isn't going to help
any of those people. So he's making the point that
this was just a strive for a little bit of
(05:04):
some some headlines for the government. I just essentially re
announcing what's already been announced. So I mean, you know,
there was things in there such as the Wellington's Hot
Hot Valley Mental Health Unit in Wellington was now was
you know reference, so was the Parliamentary Library and other
ones across the country as well. So you know, Kieran
isn't happy with this, but you know there was Nikola
(05:25):
Willis and Chris Bishop talking about how was it going
to help the economy, et cetera, et cetera.
Speaker 1 (05:34):
This is news talks end the breaking news.
Speaker 2 (05:39):
In breaking news. Inflation is on the rise again latest stats.
New Zealand figures showed consumer price index rows two point
seven percent in the year to June. That's up from
two point five percent in the year to March. Economists
were expecting today's figures to land between two point six
and two point nine percent. The inflation rate is expected
(06:01):
to rise even higher this quarter before again easing late
in the year. Jason will was your thoughts on.
Speaker 4 (06:09):
That, Yeah, I mean they'll be happy economists around the
country and especially the Reserve Bank that we didn't see
that number nudge above three percent. You'll understand, of course
that the Reserve Bank has within their mandate to keep
inflation between one and three percent, So seeing that it
is not at the top of that band yet, two
point seven is actually sort of the midpoint of where
(06:30):
economists were expecting it to be. It's actually quite good
news there and no need to panic, no need to
get to alarm stations at this point.
Speaker 3 (06:38):
As you mentioned there, there is some.
Speaker 4 (06:40):
Expectation that it's going to continue to rise for a
little bit, but that is not going to get the
Reserve Bank or today's number isn't going to get the
Reserve Bank thinking about maybe easing any potential cuts that
they have to the official cash rate. And it looks
like given this number today, all things are going to
go ahead as expected. And yeah, essentially two point seven.
(07:01):
As you said, it's between what the economists were expecting.
Speaker 2 (07:04):
I heard this morning, and I'm not sure whether it
was Ryan or Mike's show, but I heard this morning
that if this stayed roundabout the same, which it has,
you know, it's not dress thic that the interest rates
still we could still see some cuts, you know, in
the next you know, in the next announcement. Do you
do you agree with that?
Speaker 4 (07:21):
Yeah, I mean we had Sharon Zolner talking to Hosking
this morning saying they were expecting one not just in August,
but in November as well, and sort of the main
caveat around that, of course, was today's consumer price index
aka inflation. If we'd seen today's number be a bit
of a runaway, say over that three percent, you probably
would have seen economists start to soften that position and
(07:43):
say that they were thinking, well, hang on a second,
the Reserve Bank might hold off any of those cuts
just so they can get a clearer picture of.
Speaker 3 (07:51):
What where the economy is running.
Speaker 4 (07:52):
But given today is broadly in line with expectations, in
fact a little bit lower than the market rate, which
is between two point eight and two point nine, I
think then it means that everything is probably going to
proceed as Sharon expects it to.
Speaker 2 (08:05):
You know, feels to me in real life, Jace, it
feels to me that it was higher than that. I
really did, you know. I know, we're in the middle
of winter and tomatoes are extremely expensive and all the
you know, BROCCOLI's expensive and everything's expended. Butter is going through.
I mean, that's nothing to do with winter, but butter's
going up. I thought it was going to be higher.
Speaker 4 (08:24):
Yeah, And I think that there'd be a lot of
people out there thinking the same thing, because we do
get to this time in the year where some of
those staples that you're buying every single week, just like
your tomatoes or your carrots or the butter have gone
up exponentially, and we do get those consistent grocery price
reports that show prices are still going up. But that's
just one part of the consumer Price Index, which is
(08:46):
a basket of goods that the Stats New Zealand measures
every quarter. And I can understand people's inflation expectations probably
will be higher than what it actually is right now.
Same thing when we get to summer, where some of
those more seasonable, seasonable vegetables and fruits that we buy
are a little bit cheaper. So it just goes to show,
you know, it's not as easy peck as some of
(09:07):
us punters like you myself might think.
Speaker 2 (09:09):
Real life people. Jason, in thirty seconds or less, can
you please tell me what's happening in the beehive this week? Please?
Speaker 4 (09:16):
Oh, well, we've got the Prime Minister's press conference later today.
We'll be all across that one as he sort of
previews what's happening for the week, and of course we've
got the usual hustle and bustle of question time, and
we've got a number of bills passing through the House
this week. I usually get a briefing a little bit
the leader and the date to see what those are.
But you can be you can bet your bottom dollar
that it's going to be another week of fun and
(09:37):
another week where we might want to forecast what's happening,
but we actually have no idea.
Speaker 2 (09:41):
They have actually no idea. Let's leave it there, no idea.
Neither of us they've got any idea. Jason Walls, thank
you appreciate. I know that you've got a hell of
a big idea. I know you've got lots of ideas,
so I'm not going to leave it there. Jason Walls,
our news Talk said be political edit. Thank you very much.
Speaker 1 (09:59):
For more from Wellington Mornings with Nick Mills, listen live
to news Talks It'd be Wellington from nine am weekdays,
or follow the podcast on iHeartRadio.
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