Steven Joyce: former Finance Minister on New Zealand's GDP crashing harder than expected during September quarter

People will have questions, after one of the country's worst quarterly GDP dips in decades.

Stats NZ figures show New Zealand's gross domestic product crashed down one percent in the September quarter.

It's put the country in the deepest recession since the Covid-driven slump in 2020. 

Former Finance Minister Steven Joyce says the Reserve Bank Governor, Adrian Orr, needs to speak up and explain.

"I think there is some legitimate questions to be asked - I can remember, quite recently, him saying he's got it all under control and that this is going to be a soft landing. Well, quite clearly, it wasn't." 

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Episode Transcript

Speaker 1 (00:00):
I just want to know what Raylean found so funny,
obviously not our GDP numbers which are out today, And
I can tell you we fell by a whopping one
percent in Q three. Q two was revised down to
a huge one point one percent. It was point two.
This officially makes this the deepest recession bar lockdowns since
nineteen ninety one. The Reserve Bank Governor Adrian or Well,

(00:21):
we didn't ask him on the program. He's declined our
interview requests. This evening, Former Finance Minster Stephen Joyce is
with me live though.

Speaker 2 (00:27):
Good evening, Hi, Ran, how are you.

Speaker 1 (00:29):
I'm well, thank you. What's your take on today's numbers.

Speaker 2 (00:33):
Well, I think some people have got some questions to answer,
to be honest, including the Reserve Bank Governess. I'm not
surprised you asked him on because what we're really seeing
once again is that he was both heavy footed on
the way up and heavy footed on the way down.
And I think there is some legitimate questions to be asked.

(00:54):
I can remember as quite recently him saying he's got
it all under control and that this is going to
be a soft Well, quite clearly it wasn't. I think
we've none about it for some time. Now we have
the figures to confirm it.

Speaker 1 (01:04):
Yeah, we've all felt it. Do you think he should
what should the government remove him?

Speaker 2 (01:09):
Should he go? I mean, well, no, I don't think
the government should remove him, because I think once you
start removing central bank governance, that's a mistake. But I
think he does over the country an explanation, but not
just him. Frankly, I think we had a couple of
things with the previous government. You know, they were very

(01:30):
very similar on the fiscal side, so we had a
panicked overdoing of the response on both fiscally and monetarily wise,
and now we're reaping the rewards of that, which aren't
very pleasant. And it's been a very, very tough year,
and so there are lots of questions to answer. I
think we've had a six or seven year period where

(01:52):
people have said, oh, well, the economy will just cope
with whatever we throw at it, and that includes the
COVID response, and some of that was necess and some
of it wasn't. And so now the reality is we
need a period of time where we actually focus on
growing this economy because quite clearly, when we treated the
way we did in the last six or seven years,

(02:14):
it gets really damaged and that it hurts every day new.

Speaker 1 (02:18):
We hammered the master Card, no doubt about it. But
to be fear to Adrian and to the previous government.
You look at Australia, Yeah, they're growing at what point
eight percent this year. That's the slowest since the early
nineties for them as well outside of COVID.

Speaker 2 (02:34):
Yeah, but they're growing, which makes it it's a much
more pleasant experience. And I think a lot of people
that have spent time in Australia recently. I haven't, but
I know a lot of people that have would say
it's a different vibe over there than it is in
this country. At the moment, it's quite stark. And we
can see that with the numbers moving to Australia, is
that it's once again seen as quite a big difference

(02:56):
an opportunity for people than here. And there's pretty people
on the left that will seek to blame the current
government for that, but actually, you know, this has been
this has been set up over the last six or
seven years.

Speaker 1 (03:10):
I think when we had the Haifu on Tuesday and
Nicola Willis came on the show, I was asking her
about whether she was going to go deeper and harder
with the cuts given the state of the books. I mean,
we're borrowing, We're not even going to get to start
paying back any of that COVID debt until we get
to surplus, which is not going to be until the
twenty thirties, So why not cut deeper? Does today's numbers

(03:31):
kind of signal why she's got a real balancing act
on her hands here?

Speaker 2 (03:37):
Oh, she absolutely has a you know, I think I've
felt that it's going to end up a bit like
this ever since, ever since she got the job, because
the numbers. I think the numbers were always looking at
being harder to balance than it was for us when
we came in after the GFC, and that was hard enough, frankly,

(03:57):
And I've I thought she's been in a difficult position
ever since she's taken on the job because it was
always going to be worse, and Treasury's projections forward are
always going to deteriorate at the stage of the cycle.
At some point they'll turn and they'll say, oh, well,
things will get better because Treasury. Treasury has a habit
of drawing lines from where we are and saying, oh,

(04:18):
it's just going to get terrible. So I don't think
it necessarily is going to be as bad as they say,
but it's bad enough. And now that we're talking debt
to GDP ratios of getting towards the high forties percent,
the difficulty, Yeah, that's right. And the difficulty with that
is is you can make the argument that that's not
the end of the world, but we're only one big

(04:41):
sort of natural shock away from being another ten percent
on top of that, God forbid something else happens, but
it does tend to happen from time to time in
this country. So we do need to get it under control.
And that means the current government is probably going to
have to push harder than they expected to do some things.
It's not just cutting costs, so that's the significant part

(05:03):
of it. It's moving faster to grow the economy and
to encourage investment. And you know, they've done quite a
lot in this first year, but actually they need to
have a break and come back and go harder again
because we need to, for example, don't just talk about
attracting investment, is take some steps to actually attract some investment.
Now they've done a bit in the rm A space,

(05:24):
but I'm talking about overseas investment as well, because the
infrastructure pipeline can't happen without overseas investment. We don't have
any do and getting a lot of investment in the
in the in the private sector businesses will involve overseas
investment as well. So we need to stop talking about
that and actually doing it. So there's a bunch of
things that they're going to have to move faster on

(05:45):
in the new year. And that's difficult because you're in
a coalition and all the easy stuff has been done
the fact, but you know, everybody's agreed on the things
that have been done so far, and we've seen with
the ferries, the ferries and so on, that Sonali things.
They all have to become on overseas investment.

Speaker 1 (05:59):
And if you Handber in the passenger seat too, thank
you very much for coming on the program. Great to
have you on as always, Stephen Joyce, former Finance Minister.
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