Liam Dann: NZ Herald business editor at large ahead of Nicola Willis' half yearly economic and fiscal update

The Finance Minister's set to update the country on the state of the books next week, and experts aren't feeling too optimistic.

Nicola Willis will reveal whether or not the nation is still on track to reach surplus in 2027-2028.  

NZ Herald business editor at large Liam Dann explains why he's not feeling too hopeful about this target.

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Episode Transcript

Speaker 1 (00:00):
Liam dan Is The Herald's Business editor at large with
me in the studio. Good evening, a right, So it
feels a little bit like the calm before the storm
this week, but next week it's going to get gloomy.
We've got the HIFU on Tuesday, current account deficit Wednesday,
GDP data on Thursday.

Speaker 2 (00:14):
Yeah, and none of it looking great. Like I was thinking,
no tidings of joy, comfort, No good tidings, no joy,
no comfort. Yeah. So, you know, talking about the government
trying to find money for fancy fairies and things. I think,
you know, the Treasury has already given as much away

(00:34):
as it can, but it looks like those Crown accounts
are going to look worse on than hoped on. On Tuesday,
the HIFU half year Fiscal and Economic Update, So I guess,
you know, like it's a tough one, but they knew
it was coming. But it does mean more borrowing. It

(00:56):
does probably mean unless they can really finess things, that
they're going to have to put the surplus, you know,
go further out in terms of looking for the surplus.

Speaker 1 (01:06):
Another year delayed.

Speaker 2 (01:08):
Yeah, So that's tough, and you know it means that
there's going to be more pressure on Nikola Willis's budget
next year. So you know, look, I don't think anybody's
expecting it to be great, but I mean it's because
the tax take hasn't been there, because the economy has
been stuck in recession, as we're going to find out
on Thursday, and it's the growth that's projected actually is

(01:30):
lower and flatter than we'd hoped as well.

Speaker 1 (01:32):
Yeah, and because when you look at that, I saw
of the OECD report was that last week had us
at one point two percent next year growth. Yeah. Yeah,
so it's still not like amazing, it's not a boom.

Speaker 2 (01:42):
And in fact, the Reserve Bank downgraded their forecast. They're
looking at sort of two point four for the year after.
So that's that's the sort of getting back to two
point four. I remember, when you know it used to
be over three was good. But they're saying that if
we get up over three percent, that's going to be
inflationary because our economy doesn't have the capacity anymore. We're
not productive enough. But I don't want to get into

(02:02):
a big discussion about productivity right now. We're actly going
to avoid that before Christmas.

Speaker 1 (02:06):
That'll be great, save it for Christmas Dayeah.

Speaker 2 (02:09):
Yeah, yeah, yeah, yeah, with the cousins and uncles and aunts.

Speaker 1 (02:12):
That will love that. So we'll have us likely have
a surplus delayed, we'll have more borrowing as a result
of that. The quarter three GDP numbers, you did mention
them briefly, but we'll confirm definitely that we're in recession.

Speaker 2 (02:23):
Right, Well, that's the expectation. So the second quarter was negative,
so this will be the third quarter. It will be historic,
so it will say, well, we were in recession. We
knew that though, and per capita, we know that we
have been in recession for a couple of years. So
there's but you know, I suppose if there's a bright
spot and that the economists are starting to say that
this might represent a low point. And so yeah, I

(02:46):
mean it's we're talking about low growth, but growth is
su're going to feel a lot better than no growth
at all. So you know, I'm still still trying to
sort of get a little bit of optimism into the
message for twenty twenty five. It's going to feel better
than twenty twenty four.

Speaker 1 (02:57):
Yeah. It's hard, though, isn't it hard? Trying to get's
like trying to ge blood out of a stone getting
a smile out of a business correspondent.

Speaker 2 (03:04):
Yeah, that's right, you know, yeah, we've got to be
up there.

Speaker 1 (03:05):
Hey, let's go to the Fed over in the States.
They are potentially smiling because they're going to get a
rate cut, well, potentially get a rate cut next week.
It's looking quite good.

Speaker 2 (03:14):
Yeah, because their inflation numbers came in. It I think
it's two point seven, which sounds bad, but given that
their economy is going quite you know, quite well, they
haven't had a recession, they're still growing. Two point seven
inflation was considered okay, on target, and that should give
room for the Fed to do one more cut ahead
of the new year. And you know, look, there's a
lot of a lot of bullishness about the American economy.

(03:36):
Trump coming in and keeping it humming for however long
it till whatever the rest of the economic sketches up
with them. But the markets are very happy. You know,
we're seeing it in our key we saver here, So
I guess for all the turmoil and political chaos over there,
America is kind of a bright spot on the on
the world stage.

Speaker 1 (03:54):
Right now, leam, Thank you very much. Good to see
there's always leam Dan, the Herald's Business editor at large,
with me in studio for more from Hither Duplessy Allen
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