John Key: Former Prime Minister responds to criticism of the India Free Trade Agreement

Sir John Key isn't holding back on what he thinks about critics of the India Free Trade Agreement – like Winston Peters. 

The New Zealand First Leader has raised fresh concerns about the deal, after Indian Prime Minister Narendra Modi said New Zealand was committed to investing billions into the Indian economy. 

Prime Minister Christopher Luxon says we've only committed to promoting investment. 

Former Prime Minister Key told Mike Hosking while the India FTA isn't perfect, it will open access to one of the world's great economies. 

He says anyone opposed to the Indian FTA is a clown who doesn't know much about economics. 

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Episode Transcript

Speaker 1 (00:00):
So how do we read the study of the economy
right now? With the RB last week? Of course in
part lifting that cash rate. Do not forget this because
they see growth coming through. And then you've got your
manufacturing and services data as well, and that's before you
get the weekends India FDA signing. So John Keys with
us on this Good morning to you morning, Mikey. If
you're running the country in election year, does this give
you a story economically to tell?

Speaker 2 (00:22):
Yeah? You no, absolutely.

Speaker 3 (00:24):
Look I think if you've got a cross section of
people on your show this morning and said how things going,
it would depend a lot. If they're in construction, real estate, retail, hospo,
the protea all feels pretty rough, it's tough, it's bad.
If I'm in farming, horticulture, manufacturing, exporting, tourism.

Speaker 2 (00:42):
It feels good.

Speaker 3 (00:43):
If I live in Auckland, Wellington, it's worse than the GFC.
If I live in the South Island of Provincial New Zealand,
it's great.

Speaker 2 (00:50):
Right, So it really does depend.

Speaker 3 (00:53):
But what that shows you is where are many kind
of speed, many varied economy, even for.

Speaker 2 (00:58):
A relatively small global economy.

Speaker 3 (01:00):
And you can see underneath all of these things where
the optimism is coming. And I think you and Andrew
Kalla are doing pretty good job. I think are pointing
out every morning where there are some green shoots and
bright light. But this is one way to think about it, right.
What makes the economy go faster is when they can
spend money. Consumers can spend money. That's what matters. So
think about housing just for one second. We are a

(01:23):
deeply conservative nation and eighty percent of all mortgages in
New Zealand are borrowed on a fixed rate and they
usually one to two years. So that's the way the
banks look at it. And here are the top line
stats of housing in New Zealand. A third of people
own a home with a mortgage, a third of people
own a home without a mortgage, and a third of
people rent. So of the third of the people that

(01:46):
had a mortgage back two years ago start of twenty four,
their average borrowing rate was seven percent, today it's four
point eighty five. And in fact, actually they're borrowing in
the one year is probably about four and a half percent.
So my point to you would be there's a lot
more cash starting to slosh around. And if you ask
the banks, ask them. What's happening with their prepayments? Like

(02:09):
our consumer's paying off their mortgage faster than we would
be demanding of them. The answer is over half of
them are. So there's a bit of Look it's fragile
and if you're in construction and Auckland trying to sell
a townhouse, it's horrible.

Speaker 2 (02:23):
It's the worst it's.

Speaker 3 (02:24):
Been since in the eighties of real estate. But it
is going to come right and.

Speaker 2 (02:29):
All of that. This picture is growing. That's what I'd say.

Speaker 1 (02:32):
What do you place how much weight do you place
on the d f TA. I mean you were around
at a time when you couldn't quite get it across
the line. You would argue, dairy, I get it. All
that sort of stuff. It's across the line. Now materially
does it help?

Speaker 2 (02:43):
Yeah, Look, I.

Speaker 3 (02:44):
Tell you what people will pose fta's look. People pose things.
They find things to pose.

Speaker 2 (02:50):
You know.

Speaker 3 (02:50):
My favorite when I was in Parliament was you know,
there wasn't enough enough consultation, right, And I used to
say to people, you know what, consultation doesn't agreement. I
consulted with you, I just didn't agree with you, right,
And the point is like, oh, these people get up
and say, oh.

Speaker 2 (03:08):
Oh, there's twenty million dollars that we've got on the
stove the next whatever as a theoretical goal. Here's a clue,
I reckon.

Speaker 3 (03:15):
If you're opposed to the STA, you're a clown and
you don't have much knowledge about economics, because here are
the economics. They are one point four billion people, we
are five million. They have enormous We're going into their market.
We got rid of all of ours under the Douglas
Longey government. We're giving up nothing.

Speaker 2 (03:36):
They might not be giving up everything.

Speaker 3 (03:38):
So of course it would be so much better if
the head better dairy provisions than the likes. But actually
they are giving up a lot. And will it get
better over time.

Speaker 2 (03:47):
Yes.

Speaker 3 (03:48):
And if you close your eyes and wake up in
ten or fifteen years time, you name for me the
superpowers in the world, because I can do it for you.
Right now, the United States, China, and India. They are
growing at seven percent into year in India, if not more.
You tell me that we don't want to hitch ourselves
to that wagon.

Speaker 1 (04:04):
Yeah, exactly, goodnes see, I appreciate it. So John Keith,
former Prime Minister for more from the Mic, asking breakfast
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