There's a belief New Zealand's entering the early stages of an export-led recovery.
Stats NZ data reveals it's at $1.4 billion in April, compared with a $12 million deficit last year.
The dairy sector's been the big winner, up $601 million to $2.2 billion.
Former Finance Minister Steven Joyce told Mike Hosking it's promising on the back of a tough three years in the sector.
He says domestically people aren't spending a lot, so imports aren't coming in, but fortunately the world is buying more from us which is a great point in the cycle.
LISTEN ABOVE
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Upside of our economic story on budget day, if you
grow something, it seems you can do no wrong. At
the moment, primary sector has produced a billion dollar monthly
trade surplus. That's our highest ever dary the big winner
up six hundred and one million to two point two billion. Overall,
we sold seven point eight billion worth of goods. So
when you look at that inn isolation, you think, man,
we must be rolling, which of course we're not. Stephen Joyce,
(00:21):
former finance minister, is with us. Stephen, good morning to
you money, Mike cas I'm well, thank you. Is this
how economies work? From your financial experience? In other words,
at any given point in time, somebody somewhere is doing well.
Thank the Good Lord for that.
Speaker 2 (00:35):
Yeah, well, you'd hope so, wouldn't you, Because after a
top three years, it feels good to see somebody doing well. Now.
I think I think what we're seeing is probably the
beginnings of an export lead recovery in the old term,
which is you've got domestically, people are spending a lot
of money, so imports are coming in. But fortunately for us,
(00:57):
the world is buying us stuff and it's not a subsidy,
just a memo for the US president, and you know,
they want to buy more key fruit, they want to
buy more dairy and that's a great point in the
cycle from our perspective because that will help lead the
recovery over the next year and a year or two
a head.
Speaker 1 (01:16):
What does it tell us if you were finance minister
looking at this when we did the zesbrig got people
before from one sixty million tries to two hundred and twenty.
It's all very well to grow the stuff, but to
sell it and sell it at a better price, somebody
somewhere is buying it. Therefore, all this talk of worried
times can't be that true. I mean, they're either spending
or they're not.
Speaker 2 (01:35):
And they are well, they are spending, which is great.
But the bit that will be making people nervous still
is the potential for rapid policy change out of the US,
and that's the bit that will be giving people pause.
So normally, normally, you know, you get to the stage
of cycle. You know you're a key fruit farmer or
you're a dairy farmer. You're investing in your future. But
(01:58):
there's an element of sitting there going well, this is
all good, but what happens if the Americans do something
weird which you'd have to give reasonable odds on. So
that's the bit that's making people cautious. And I think
the finance ministers acknowledging that that if it hadn't been
for that sort of level of uncertainty out of the US,
then probably our recovery would be a lot further along
(02:20):
by now. But people who have to make investment decisions,
from farmers to businesses to developers, they are all sitting
there going, well, I'll get ready, but I'm not quite
certain that that we're in a period of steady growth
that's going to give us the confidence.
Speaker 1 (02:37):
Slightly out of left field, but the ECB overnight said
they reckon there's a fundamental shift going on in terms
of equities and bonds. In other words, people are looking
at America now and go, I've got better things to
do in better places to be, like Japan, maybe even Europe.
Do you think it's that profound or not?
Speaker 2 (02:51):
Really, I think there's something very significant going on. The
bond market is unhappy with a lot of it's coming
out of the US, and we're about to head into
a tussle. You know, you talk about our budget or
the other big budget that's going on in the world,
much bigger than ours is the US budget, And you know,
(03:13):
they are sort of playing chicken with the bond market
at the moment by saying that they're going to increase
the size of what is an already large deficit one
hundred percent of GDP in the US, costing them a
lot to service it. And they are and you know,
they're threatening to pass a budget that would be expansionary
and increase debt, and the bond market's going I don't
think so. And your schil movies come down on Friday.
(03:37):
So that's the bit I think is where it's probable
that the Trump is going to come up against another
moment where he has to back track. But if he
doesn't backtrack, then definitely we're going to see continued moves
away from US dollar assets into other assets. The trouble
for the world is, you know, that's a big shift,
(03:57):
and there's not as many other places to go as
you like. But you know that people will move, Yes, they.
Speaker 1 (04:02):
Will back home. Is she so constrained today that it's
a little here and a little there, or could she
do something profound?
Speaker 2 (04:13):
It's very difficult to do something profound when you don't
have any dough and I think that's going to make
it constraining. I suspect what we'll see is significant savings
and that'll make some people grumpy, as we've already seen.
But actually I think overall the country will be going, well, yeah,
we had to do something, so even if you don't
(04:35):
like it, you accept it. I think there will be
further spending, there will be further borroing. I know that
you're keen on no further boring, but I think it's
about bending the curve down and they need to show
that they can bend the curve down. But within that
there's not going to be a huge amount of room.
I think what could be the thing that you know,
and it has been starting to be flagged around the place,
(04:56):
is something to give a business confidence. Business is confidence,
particularly small businesses, and how people are talking about tax
breaks and things, and maybe there will be something there
because you do need something to kick start that. New
Zealand small business is still straggling, yes, and there are
a lot of businesses that are sort of waiting for
the upturn and some hanging on by the sort of
(05:19):
tips of their fingernails. So I think they'll be looking
for something there, just to show that the government understands
and is going to encourage them to invest, because business
investment in this country has been low in the last
couple of years, and you can't increase productivity, you can't
increase growth if you're not investing.
Speaker 1 (05:36):
What level of importance would you place a figure that
goes we will return to an annual surplus by X,
and the X is not twenty thirty something, Well.
Speaker 2 (05:47):
You've got to get Yeah, you've got to show a
part down and path back the surface. And then people
will debate whether whether it's soon enough or not. And
there'll be the hawks that's it should happen much faster
and so on, and they'll be the dug that say, oh,
you know, you should be borrowing and getting us through this.
But then they are the same people that said that
through all the way through COVID and look where they
got us. But I think I think people will want it.
(06:10):
You know, the banks and the markets will want to
see a trend down in the latter stages of the
four years. They want to see an improving situation in
the four year projections.
Speaker 1 (06:21):
Okay, the politics you alluded to going into election year
next year, how much political capital can they burn to
go in and say it's still hard, it's still difficult. Yes,
we still get it. The better times are ahead. But
we've said this for three years, give us another three
In other words, is there enough or are there enough
New Zealanders who get it?
Speaker 2 (06:44):
I think there's thing. There's a lot of people that
get it. I think obviously in a political sense, the
economy is really starting to grow, and there's there's lots
of data points and people are feeling better. That would
that would make the next election easier for the government.
What we don't know, though, is whether things will conspire
in that way. I think there was it was hardly
likely that was going to occur with the work they
(07:06):
were doing before the new Trump presidency started and we
had Liberation Day and all that sort of stuff. Now
I think that will receive in importance. It will just
become a lot of noise because what's the way they're
describing them Taco Trump Trump always chickens out as the
way they're talking about them in the financial markets. So
(07:27):
maybe by then or maybe you know, later this year,
people will sort of be parking all of that and
getting on with life, which would then increase the political
chances for the government. But always at the end of
the first three years you were saying it's a work
in progress, because it is. It has to be after
a big probably a series of problems like we've got
now or we had when this government came in. You know,
(07:49):
the idea that you'll fix them within three years is
a bit fanciful. But if you can say we've made
some progress and here is the progress, then you're probably
back yourselves to be really good stuff.
Speaker 1 (08:01):
Always good to talk to you, Stephen Joyce form the
Finance Minister. Of course, coverage on ZI be at two
o'clock this afternoon. For more from the Mic Asking Breakfast,
listen live to News Talk z it B from six
am weekdays, or follow the podcast on iHeartRadio
Upside of our economic story on budget day, if you
grow something, it seems you can do no wrong. At
the moment, primary sector has produced a billion dollar monthly
trade surplus. That's our highest ever dary the big winner
up six hundred and one million to two point two billion. Overall,
we sold seven point eight billion worth of goods. So
when you look at that inn isolation, you think, man,
we must be rolling, which of course we're not. Stephen Joyce,
(00:21):
former finance minister, is with us. Stephen, good morning to
you money, Mike cas I'm well, thank you. Is this
how economies work? From your financial experience? In other words,
at any given point in time, somebody somewhere is doing well.
Thank the Good Lord for that.
Speaker 2 (00:35):
Yeah, well, you'd hope so, wouldn't you, Because after a
top three years, it feels good to see somebody doing well. Now.
I think I think what we're seeing is probably the
beginnings of an export lead recovery in the old term,
which is you've got domestically, people are spending a lot
of money, so imports are coming in. But fortunately for us,
(00:57):
the world is buying us stuff and it's not a subsidy,
just a memo for the US president, and you know,
they want to buy more key fruit, they want to
buy more dairy and that's a great point in the
cycle from our perspective because that will help lead the
recovery over the next year and a year or two
a head.
Speaker 1 (01:16):
What does it tell us if you were finance minister
looking at this when we did the zesbrig got people
before from one sixty million tries to two hundred and twenty.
It's all very well to grow the stuff, but to
sell it and sell it at a better price, somebody
somewhere is buying it. Therefore, all this talk of worried
times can't be that true. I mean, they're either spending
or they're not.
Speaker 2 (01:35):
And they are well, they are spending, which is great.
But the bit that will be making people nervous still
is the potential for rapid policy change out of the US,
and that's the bit that will be giving people pause.
So normally, normally, you know, you get to the stage
of cycle. You know you're a key fruit farmer or
you're a dairy farmer. You're investing in your future. But
(01:58):
there's an element of sitting there going well, this is
all good, but what happens if the Americans do something
weird which you'd have to give reasonable odds on. So
that's the bit that's making people cautious. And I think
the finance ministers acknowledging that that if it hadn't been
for that sort of level of uncertainty out of the US,
then probably our recovery would be a lot further along
(02:20):
by now. But people who have to make investment decisions,
from farmers to businesses to developers, they are all sitting
there going, well, I'll get ready, but I'm not quite
certain that that we're in a period of steady growth
that's going to give us the confidence.
Speaker 1 (02:37):
Slightly out of left field, but the ECB overnight said
they reckon there's a fundamental shift going on in terms
of equities and bonds. In other words, people are looking
at America now and go, I've got better things to
do in better places to be, like Japan, maybe even Europe.
Do you think it's that profound or not?
Speaker 2 (02:51):
Really, I think there's something very significant going on. The
bond market is unhappy with a lot of it's coming
out of the US, and we're about to head into
a tussle. You know, you talk about our budget or
the other big budget that's going on in the world,
much bigger than ours is the US budget, And you know,
(03:13):
they are sort of playing chicken with the bond market
at the moment by saying that they're going to increase
the size of what is an already large deficit one
hundred percent of GDP in the US, costing them a
lot to service it. And they are and you know,
they're threatening to pass a budget that would be expansionary
and increase debt, and the bond market's going I don't
think so. And your schil movies come down on Friday.
(03:37):
So that's the bit I think is where it's probable
that the Trump is going to come up against another
moment where he has to back track. But if he
doesn't backtrack, then definitely we're going to see continued moves
away from US dollar assets into other assets. The trouble
for the world is, you know, that's a big shift,
(03:57):
and there's not as many other places to go as
you like. But you know that people will move, Yes, they.
Speaker 1 (04:02):
Will back home. Is she so constrained today that it's
a little here and a little there, or could she
do something profound?
Speaker 2 (04:13):
It's very difficult to do something profound when you don't
have any dough and I think that's going to make
it constraining. I suspect what we'll see is significant savings
and that'll make some people grumpy, as we've already seen.
But actually I think overall the country will be going, well, yeah,
we had to do something, so even if you don't
(04:35):
like it, you accept it. I think there will be
further spending, there will be further borroing. I know that
you're keen on no further boring, but I think it's
about bending the curve down and they need to show
that they can bend the curve down. But within that
there's not going to be a huge amount of room.
I think what could be the thing that you know,
and it has been starting to be flagged around the place,
(04:56):
is something to give a business confidence. Business is confidence,
particularly small businesses, and how people are talking about tax
breaks and things, and maybe there will be something there
because you do need something to kick start that. New
Zealand small business is still straggling, yes, and there are
a lot of businesses that are sort of waiting for
the upturn and some hanging on by the sort of
(05:19):
tips of their fingernails. So I think they'll be looking
for something there, just to show that the government understands
and is going to encourage them to invest, because business
investment in this country has been low in the last
couple of years, and you can't increase productivity, you can't
increase growth if you're not investing.
Speaker 1 (05:36):
What level of importance would you place a figure that
goes we will return to an annual surplus by X,
and the X is not twenty thirty something, Well.
Speaker 2 (05:47):
You've got to get Yeah, you've got to show a
part down and path back the surface. And then people
will debate whether whether it's soon enough or not. And
there'll be the hawks that's it should happen much faster
and so on, and they'll be the dug that say, oh,
you know, you should be borrowing and getting us through this.
But then they are the same people that said that
through all the way through COVID and look where they
got us. But I think I think people will want it.
(06:10):
You know, the banks and the markets will want to
see a trend down in the latter stages of the
four years. They want to see an improving situation in
the four year projections.
Speaker 1 (06:21):
Okay, the politics you alluded to going into election year
next year, how much political capital can they burn to
go in and say it's still hard, it's still difficult. Yes,
we still get it. The better times are ahead. But
we've said this for three years, give us another three
In other words, is there enough or are there enough
New Zealanders who get it?
Speaker 2 (06:44):
I think there's thing. There's a lot of people that
get it. I think obviously in a political sense, the
economy is really starting to grow, and there's there's lots
of data points and people are feeling better. That would
that would make the next election easier for the government.
What we don't know, though, is whether things will conspire
in that way. I think there was it was hardly
likely that was going to occur with the work they
(07:06):
were doing before the new Trump presidency started and we
had Liberation Day and all that sort of stuff. Now
I think that will receive in importance. It will just
become a lot of noise because what's the way they're
describing them Taco Trump Trump always chickens out as the
way they're talking about them in the financial markets. So
(07:27):
maybe by then or maybe you know, later this year,
people will sort of be parking all of that and
getting on with life, which would then increase the political
chances for the government. But always at the end of
the first three years you were saying it's a work
in progress, because it is. It has to be after
a big probably a series of problems like we've got
now or we had when this government came in. You know,
(07:49):
the idea that you'll fix them within three years is
a bit fanciful. But if you can say we've made
some progress and here is the progress, then you're probably
back yourselves to be really good stuff.
Speaker 1 (08:01):
Always good to talk to you, Stephen Joyce form the
Finance Minister. Of course, coverage on ZI be at two
o'clock this afternoon. For more from the Mic Asking Breakfast,
listen live to News Talk z it B from six
am weekdays, or follow the podcast on iHeartRadio
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Amy Robach & T.J. Holmes present: Aubrey O’Day, Covering the Diddy Trial
Introducing… Aubrey O’Day Diddy’s former protege, television personality, platinum selling music artist, Danity Kane alum Aubrey O’Day joins veteran journalists Amy Robach and TJ Holmes to provide a unique perspective on the trial that has captivated the attention of the nation. Join them throughout the trial as they discuss, debate, and dissect every detail, every aspect of the proceedings. Aubrey will offer her opinions and expertise, as only she is qualified to do given her first-hand knowledge. From her days on Making the Band, as she emerged as the breakout star, the truth of the situation would be the opposite of the glitz and glamour. Listen throughout every minute of the trial, for this exclusive coverage. Amy Robach and TJ Holmes present Aubrey O’Day, Covering the Diddy Trial, an iHeartRadio podcast.
Good Hang with Amy Poehler
Come hang with Amy Poehler. Each week on her podcast, she'll welcome celebrities and fun people to her studio. They'll share stories about their careers, mutual friends, shared enthusiasms, and most importantly, what's been making them laugh. This podcast is not about trying to make you better or giving advice. Amy just wants to have a good time.