December 5, 2025 • 6 mins
HSBC Chief Economist Paul Bloxham joined Heather du Plessis-Allan to consider the question, will New Zealand ever be a rockstar economy again?
The phrase 'survive until 25' promised economic prosperity this year, but in reality little growth was seen.
But, Bloxham says the key is to "aspire to try and be a rock star."
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Episode Transcript
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Speaker 1 (00:00):
Now, I think we can all agree that survived till
twenty five turned out to be a bit of a
dud slogan as the economy struggled all along along all
of this year. So we'll stay in the mix until
twenty six turn into a dud as well. Or do
we actually believe these green shoots stories. Paul Bloxham as
hspc's chief economist, regular on the show. He's been traveling
the country all week high Paul, Welcome.
Speaker 2 (00:17):
To the studio.
Speaker 3 (00:19):
Great to be here.
Speaker 2 (00:19):
It's lovely to have you, now, are you? I mean
you are pretty confident about next year. We've been talking
about this all year, right, that's right.
Speaker 4 (00:25):
Well, we thought in New Zealand's economy would pick up
a little bit more strongly this year. It's taken just
a bit longer to arrive than we had in mind,
and of course the RBNZ and because of that has
ended up delivering more easy cutting by another seventy five
basis points. But that just adds a bit more fuel
to this story as far as we see, and we
do think that growth will pick up fairly solidly into
the last part of this year and running into twenty
(00:47):
twenty six.
Speaker 3 (00:47):
As well.
Speaker 4 (00:48):
Think we think the green shoots are there and things
are looking a bit brighter in New.
Speaker 5 (00:52):
Zealand, matching Australia.
Speaker 4 (00:54):
Look, we think that New Zealand because it has had
such an extended period I mean three years of no
growth in New Zealand. In effect, there's a lot of
scope for things to pick up, and so we're forecasting
that growth will be stronger in New Zealand next year
than than Australia. I mean, Australia's got different issues. Australia
has no lack of demand. We've got plenty of demand.
We just haven't got enough supply. The economy can't grow
(01:16):
a much faster. In fact, it's probably already growing a little.
Speaker 3 (01:19):
Faster than it is sustainable.
Speaker 5 (01:20):
So no, we think New Zealand's going to have a stronger.
Speaker 2 (01:22):
How much faster are we growing than aussy?
Speaker 4 (01:25):
In our forecast next year GDP growth in New Zealand
is about two and a half percent and in Australia
is two point one just over too. So you know,
we're not talking about miles away, but we are talking
about after three years of essentially no growth in New Zealand,
you start to have a better time should.
Speaker 2 (01:41):
At least stop the brain drain type thing.
Speaker 5 (01:43):
Well, you know, so this is the this is one
element of that story.
Speaker 4 (01:47):
Once the economy starts to get going and firms start
to do a bit more hiring and the labor market
starts to tighten up, that'll keep a few more people
here and it will bring back a few more people
from Australia. And if Australia's story is one where actually
it just can't keep growing or needs to even slow
down a bit because well you're already running up against
your capacity constraints, then New Zealand's going to start to
look a bit more attractive.
Speaker 3 (02:07):
And that's the story we've got in mind.
Speaker 2 (02:10):
Do we ever get back to being a rock star
economy again?
Speaker 4 (02:12):
I think, as I said to you maybe before when
you've asked me this question, yeah, I think you need
to aspire to try and be a rock star. I mean,
when we talked about that rockstar idea, which has got
momentum of its own, and this is back in twenty fourteen,
you were the fastest growing economy in the developed world
in that particular year, and so we marked it out early.
We got that call right, and of course it's had
(02:33):
a life of its own. So the question now is
can you have the strongest economy across that set of
countries again?
Speaker 5 (02:39):
And I think, well, we'll see, you should.
Speaker 3 (02:42):
Aspire to it.
Speaker 2 (02:43):
You with a hope you may.
Speaker 4 (02:44):
I think you're in an upswing, as I say, I think,
I think there's some green shoots.
Speaker 3 (02:47):
Things are looking brighter.
Speaker 4 (02:48):
And you know, we'll as we get into next year,
if we get a little bit more menum, we'll have
a think about how much wronger you can be.
Speaker 1 (02:54):
I was at a thing a couple of months ago, right,
and we had a look at our relative There was
a chart up on the projector and it was our
relative prosperity in New Zealand and contrast to you know,
other developed countries. And really in the last probably you
could say six seven decades, we have slipped further and
further back in terms of our GDP per capita or
our relative wealth per person. So it seems to me,
(03:15):
actually the path that we're on is not actually get it.
It's not growing us in the way that we want
to grow per capita. So what do we need to
do here, Paul? Do we need to do something fundamental
in this economy, something like Ireland or Singapore, which are
being talked about.
Speaker 4 (03:28):
You need to do as much reform as you can
that attracts as much investment into the places you need them.
I mean, when you need to work on the supply
side of your economy as well.
Speaker 2 (03:36):
Would you go as hard as slashing the corporate tax
right here?
Speaker 4 (03:38):
I think that it's something should be on the agenda
that tax reforms should definitely be part of part of
the mix.
Speaker 2 (03:43):
I mean, would you go as low as fifteen?
Speaker 4 (03:45):
What you're effectively doing is looking to open up the
economy as much as possible, not just to local investors
but also global investors as well.
Speaker 2 (03:51):
Would you go as low as fifteen?
Speaker 3 (03:52):
I think that, you know, it just depends.
Speaker 4 (03:54):
I mean these the numbers we haven't got sort of
specifics on, but I think you need to look really
hard things like tax reform that could potentially make it
more attractive to invest here. I think infrastructure has still
got to be a focus. I mean, the big one
of the really interesting growth stories that's going on in
Australia that's really just getting started and actually hasn't got
enough attention yet is the data center build out and
(04:15):
the AI story and the software export, software license export story.
So Australia's got this little tech story that's actually still
quite small but growing quite quickly, and there's really no
reason why New Zealand couldn't be on that sort of
story as well. So there are growth engines you can see,
but you need to be attractive to that local and
global industrial So the reason I brought up.
Speaker 1 (04:35):
This chart is that what had showed me was that
we were It felt to me like the tinkering that
we're at at the moment.
Speaker 2 (04:41):
A little bit of.
Speaker 1 (04:41):
Reform here, a little bit of reform cutting some red
tape that's really like what we need. The way that
we're slipping backwards actually needs some fundaments, really bold, really
bold ideas. Am I just getting way over my skis
here or do you agree?
Speaker 3 (04:54):
No?
Speaker 4 (04:55):
You need to do you need to focus on supply
side reform. I think there's been some that's been moving
in the right direct. You describe it as tinkering, but
I think it is moving in the right direction. But
you need to have as bolder ideas as you can
possibly manage to deliver because you've got to attract more investment,
you've got to expand the capital stock, you've got to
focus on lifting productivity in New Zealand as well. I've
spent a lot of time talking about how much Australian
(05:16):
needs to do that, and they're not doing enough and
hence they're hitting their capacity constraints. New Zealand's got that
as an agenda too. But actually the primary agenda for
New Zealand of late has been pump priming demand, actually
getting the economy and getting confidence to improve and getting
things to turn around. I think that's starting to get underway,
and then of course a long way along that, a
long way. At the same time, the simultaneous focus ought
(05:37):
to be on these supply side issues, and as you
head towards an election next year, this ought to be
something that's very much in focus as well, should be.
Speaker 2 (05:43):
Talking about it.
Speaker 1 (05:44):
Yet now this is the last time I'm going to
talk to you before Christmas, So Merry Christmas and what
are you doing.
Speaker 4 (05:48):
I'm going to spend Christmas in Western Australia where I'm from.
Actually I grew up in Perth, and we're going to
go home and spend time with my family. It's going
to be a couple of weeks of hopefully putting down
all the tools and not getting involved.
Speaker 5 (06:02):
It's very hard for me. I really love what I do,
but I.
Speaker 1 (06:04):
Need to get your take on something you said you
take in a couple of weeks off. We discussed this
on the show yesterday whether our summer holidays are getting
too long? Are they getting too long in New Zealand?
Is it a problem for productivity?
Speaker 4 (06:13):
I think it's great that we have a pause and
we get to do a reset. This is important for everyone,
and it's good that we do it collectively. I think
that's an important feature. And like other regions do this too.
Europe it's always, you know, July and August, they have
a long stretch where everyone gets to sort of unwind
and come back fresh. So I think that this is
just a part of what we do down here in
the Antipodeans is have our summer break over.
Speaker 3 (06:34):
A Listmas time.
Speaker 2 (06:35):
That's what I think.
Speaker 1 (06:36):
Merry Christmas, thank you, thank you so much, Paul, appreciate it. Okay,
Paul blocks some agspecies Chief Economists. For more from Hither
Duplessy Alan Drive, listen live to news talks it'd be
from four pm weekdays, or follow the podcast on iHeartRadio.
Now, I think we can all agree that survived till
twenty five turned out to be a bit of a
dud slogan as the economy struggled all along along all
of this year. So we'll stay in the mix until
twenty six turn into a dud as well. Or do
we actually believe these green shoots stories. Paul Bloxham as
hspc's chief economist, regular on the show. He's been traveling
the country all week high Paul, Welcome.
Speaker 2 (00:17):
To the studio.
Speaker 3 (00:19):
Great to be here.
Speaker 2 (00:19):
It's lovely to have you, now, are you? I mean
you are pretty confident about next year. We've been talking
about this all year, right, that's right.
Speaker 4 (00:25):
Well, we thought in New Zealand's economy would pick up
a little bit more strongly this year. It's taken just
a bit longer to arrive than we had in mind,
and of course the RBNZ and because of that has
ended up delivering more easy cutting by another seventy five
basis points. But that just adds a bit more fuel
to this story as far as we see, and we
do think that growth will pick up fairly solidly into
the last part of this year and running into twenty
(00:47):
twenty six.
Speaker 3 (00:47):
As well.
Speaker 4 (00:48):
Think we think the green shoots are there and things
are looking a bit brighter in New.
Speaker 5 (00:52):
Zealand, matching Australia.
Speaker 4 (00:54):
Look, we think that New Zealand because it has had
such an extended period I mean three years of no
growth in New Zealand. In effect, there's a lot of
scope for things to pick up, and so we're forecasting
that growth will be stronger in New Zealand next year
than than Australia. I mean, Australia's got different issues. Australia
has no lack of demand. We've got plenty of demand.
We just haven't got enough supply. The economy can't grow
(01:16):
a much faster. In fact, it's probably already growing a little.
Speaker 3 (01:19):
Faster than it is sustainable.
Speaker 5 (01:20):
So no, we think New Zealand's going to have a stronger.
Speaker 2 (01:22):
How much faster are we growing than aussy?
Speaker 4 (01:25):
In our forecast next year GDP growth in New Zealand
is about two and a half percent and in Australia
is two point one just over too. So you know,
we're not talking about miles away, but we are talking
about after three years of essentially no growth in New Zealand,
you start to have a better time should.
Speaker 2 (01:41):
At least stop the brain drain type thing.
Speaker 5 (01:43):
Well, you know, so this is the this is one
element of that story.
Speaker 4 (01:47):
Once the economy starts to get going and firms start
to do a bit more hiring and the labor market
starts to tighten up, that'll keep a few more people
here and it will bring back a few more people
from Australia. And if Australia's story is one where actually
it just can't keep growing or needs to even slow
down a bit because well you're already running up against
your capacity constraints, then New Zealand's going to start to
look a bit more attractive.
Speaker 3 (02:07):
And that's the story we've got in mind.
Speaker 2 (02:10):
Do we ever get back to being a rock star
economy again?
Speaker 4 (02:12):
I think, as I said to you maybe before when
you've asked me this question, yeah, I think you need
to aspire to try and be a rock star. I mean,
when we talked about that rockstar idea, which has got
momentum of its own, and this is back in twenty fourteen,
you were the fastest growing economy in the developed world
in that particular year, and so we marked it out early.
We got that call right, and of course it's had
(02:33):
a life of its own. So the question now is
can you have the strongest economy across that set of
countries again?
Speaker 5 (02:39):
And I think, well, we'll see, you should.
Speaker 3 (02:42):
Aspire to it.
Speaker 2 (02:43):
You with a hope you may.
Speaker 4 (02:44):
I think you're in an upswing, as I say, I think,
I think there's some green shoots.
Speaker 3 (02:47):
Things are looking brighter.
Speaker 4 (02:48):
And you know, we'll as we get into next year,
if we get a little bit more menum, we'll have
a think about how much wronger you can be.
Speaker 1 (02:54):
I was at a thing a couple of months ago, right,
and we had a look at our relative There was
a chart up on the projector and it was our
relative prosperity in New Zealand and contrast to you know,
other developed countries. And really in the last probably you
could say six seven decades, we have slipped further and
further back in terms of our GDP per capita or
our relative wealth per person. So it seems to me,
(03:15):
actually the path that we're on is not actually get it.
It's not growing us in the way that we want
to grow per capita. So what do we need to
do here, Paul? Do we need to do something fundamental
in this economy, something like Ireland or Singapore, which are
being talked about.
Speaker 4 (03:28):
You need to do as much reform as you can
that attracts as much investment into the places you need them.
I mean, when you need to work on the supply
side of your economy as well.
Speaker 2 (03:36):
Would you go as hard as slashing the corporate tax
right here?
Speaker 4 (03:38):
I think that it's something should be on the agenda
that tax reforms should definitely be part of part of
the mix.
Speaker 2 (03:43):
I mean, would you go as low as fifteen?
Speaker 4 (03:45):
What you're effectively doing is looking to open up the
economy as much as possible, not just to local investors
but also global investors as well.
Speaker 2 (03:51):
Would you go as low as fifteen?
Speaker 3 (03:52):
I think that, you know, it just depends.
Speaker 4 (03:54):
I mean these the numbers we haven't got sort of
specifics on, but I think you need to look really
hard things like tax reform that could potentially make it
more attractive to invest here. I think infrastructure has still
got to be a focus. I mean, the big one
of the really interesting growth stories that's going on in
Australia that's really just getting started and actually hasn't got
enough attention yet is the data center build out and
(04:15):
the AI story and the software export, software license export story.
So Australia's got this little tech story that's actually still
quite small but growing quite quickly, and there's really no
reason why New Zealand couldn't be on that sort of
story as well. So there are growth engines you can see,
but you need to be attractive to that local and
global industrial So the reason I brought up.
Speaker 1 (04:35):
This chart is that what had showed me was that
we were It felt to me like the tinkering that
we're at at the moment.
Speaker 2 (04:41):
A little bit of.
Speaker 1 (04:41):
Reform here, a little bit of reform cutting some red
tape that's really like what we need. The way that
we're slipping backwards actually needs some fundaments, really bold, really
bold ideas. Am I just getting way over my skis
here or do you agree?
Speaker 3 (04:54):
No?
Speaker 4 (04:55):
You need to do you need to focus on supply
side reform. I think there's been some that's been moving
in the right direct. You describe it as tinkering, but
I think it is moving in the right direction. But
you need to have as bolder ideas as you can
possibly manage to deliver because you've got to attract more investment,
you've got to expand the capital stock, you've got to
focus on lifting productivity in New Zealand as well. I've
spent a lot of time talking about how much Australian
(05:16):
needs to do that, and they're not doing enough and
hence they're hitting their capacity constraints. New Zealand's got that
as an agenda too. But actually the primary agenda for
New Zealand of late has been pump priming demand, actually
getting the economy and getting confidence to improve and getting
things to turn around. I think that's starting to get underway,
and then of course a long way along that, a
long way. At the same time, the simultaneous focus ought
(05:37):
to be on these supply side issues, and as you
head towards an election next year, this ought to be
something that's very much in focus as well, should be.
Speaker 2 (05:43):
Talking about it.
Speaker 1 (05:44):
Yet now this is the last time I'm going to
talk to you before Christmas, So Merry Christmas and what
are you doing.
Speaker 4 (05:48):
I'm going to spend Christmas in Western Australia where I'm from.
Actually I grew up in Perth, and we're going to
go home and spend time with my family. It's going
to be a couple of weeks of hopefully putting down
all the tools and not getting involved.
Speaker 5 (06:02):
It's very hard for me. I really love what I do,
but I.
Speaker 1 (06:04):
Need to get your take on something you said you
take in a couple of weeks off. We discussed this
on the show yesterday whether our summer holidays are getting
too long? Are they getting too long in New Zealand?
Is it a problem for productivity?
Speaker 4 (06:13):
I think it's great that we have a pause and
we get to do a reset. This is important for everyone,
and it's good that we do it collectively. I think
that's an important feature. And like other regions do this too.
Europe it's always, you know, July and August, they have
a long stretch where everyone gets to sort of unwind
and come back fresh. So I think that this is
just a part of what we do down here in
the Antipodeans is have our summer break over.
Speaker 3 (06:34):
A Listmas time.
Speaker 2 (06:35):
That's what I think.
Speaker 1 (06:36):
Merry Christmas, thank you, thank you so much, Paul, appreciate it. Okay,
Paul blocks some agspecies Chief Economists. For more from Hither
Duplessy Alan Drive, listen live to news talks it'd be
from four pm weekdays, or follow the podcast on iHeartRadio.
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