Nicola Willis: Economic Growth Minister on the unemployment rate reaching 5.3%

The Economic Growth Minister's confident the economy will turn a corner soon. 

Unemployment's reached 5.3% in the September quarter – the highest it's been since 2016. 

160 thousand Kiwis have been out of work and looking for a job, the most since 1994. 

Nicola Willis told Mike Hosking unemployment may rise further this quarter, but there are positives, like the increase in hours worked and a move from part time to full time work. 

She says these unemployment figures do bounce around a bit, so she certainly won't say unemployment is at its peak. 

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Episode Transcript

Speaker 1 (00:00):
So the job numbers came in as expected five point
three percent for the September quarter, and depending on who's
writing the headline, of course, it's either the highest in
nine years or the bottom of the cycle and better
times or ahead. The Finance Minister Nikola Willis with us,
good morning.

Speaker 2 (00:12):
Good morning mate. We'll give you the bright side up
on this.

Speaker 1 (00:16):
Well, it's the rearview mirror, isn't it.

Speaker 2 (00:20):
Really.

Speaker 1 (00:20):
The job adds are up, so it is at the
bottom are better times coming?

Speaker 2 (00:25):
Well, there were two indicators in there that were positive.
So there was really strong growth in the hours worked
that was up zero point nine percent for the period.
So that's positive because of course when people are working
more hours, that suggests that there's more activity going on
in the economy and they're able to get more income
into their family. Also, there's been a shift away from

(00:47):
part time to full time employment because you had the
full time employment rate up in the part time rate
down a bit. So those are two positive indicators. Of course,
with unemployment figures they can bounce around the little bit.
So I'm not in the camp where I'm confidently saying
that we've absolutely definitely got the highest read at this point.

(01:08):
There are some economists who say it will go back
down next quarter. There are others who are being a
bit more cautious, So we'll see how it plays. What
we are seeing across the economy a lot of signs
that the bottom has been reached and that we are
now very much in recovery. Growing this quarter, expect to
accelerate into more growth next quarter. All of that is consistent.

Speaker 1 (01:29):
Does the underutilization rate worry Well, it's always a sign
that you don't have enough work in the economy to
satisfy the people who are wanting work.

Speaker 2 (01:39):
And so we've always said this is a very simple formula,
which is you first got to get your inflation and
your interest rates under control, which we have lower taxes helps,
and then once you've got that in place, firms will
have the confidence to start investing and hiring again. But
we are ambitious to drive it along. It's not just
enough to do the foundation. So that's why we've been

(02:00):
keen to fast track these private sector developments which have
literally thousands of jobs associated with them, and we've had
four of those approved already, and many of them will
be kicking off well before Christmas. That's why we're driving
along these public infrastructure projects, with seven billion dollars worth
of them starting before Christmas. It's also why we're keen

(02:21):
out there opening new markets through our exporters. You saw
the Prime Minister yesterday with the Indian Trade Minister. That's
why we're welcoming an investment from around the world. Reducing
red tape for businesses. All of those things about are
about giving employers the confidence to take on your workers,
because at the end of the day, you don't just
deal it with a government hiring spree. You actually need

(02:42):
private independent businesses saying I like what's ahead, I'm confident
I'm hiring.

Speaker 1 (02:46):
The related matter is the Reserve Bank report yesterday the
general I mean, do you get anything? What do they
do these reports for? I mean I could have written
it for you and probably a lot cheaper. It says nothing.
Is there any value in this?

Speaker 2 (02:59):
Yes, there is, because it's the classic case of for
three or four land financial stability reports, there could be
one that says, actually, we're seeing some things that are
making us nervous. Whether that's that they're concerned about what's
going on in the housing market with a particular type
of lending, with a sector that's very stressed that could

(03:21):
pose challenges to financial stability, and when they do that
analysis and they find that out, then they've got options
to address it. So yep, it's great when it's positive
and it's generally as you'd expect, but it can be
something that can give us warnings of problems that could
occur in the future. Financial stability. You take it completely
for granted until something goes wrong and then you've got

(03:42):
a GFC and you're wish you knew about it earlier.

Speaker 1 (03:44):
Okay, I appreciate your time. Nicholaulis the Finance Minister with
us this morning. For more from the Mic Asking Breakfast,
listen live to news talks that'd be from six am weekdays,
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