Perspective with Heather du Plessis-Allan: Was Kiwibank's Jarrod Kerr proven right?

The longer that this economic funk that we find ourselves in goes on, the more that Jarrod Kerr of Kiwibank is being proven right, isn't he?

And we had a cut today - it was 25 basis points down to 3 percent - and now there's the expectation that we will maybe get down to 2.5 percent before this thing bottoms out.

2.5 percent is where Jarrod Kerr has been saying for months that we need to get to.

But even though he's been saying it since at least September last year, if not earlier, the Reserve Bank has only just caught up with him. Up til now, they've been talking about 2.75 percent, 3 percent maybe.

Now, what you should take from this is that the Reserve Bank is surprised by what Jarrod Kerr - and you could argue many of us - have been seeing for ages, which is that the economy is properly, properly stuffed.

Like, stuffed enough that they should be cutting a lot more than they are.

Why this is a surprise to them is beyond me, because you just need to look at what's going on with businesses today to see it.

Fletcher: a massive loss.

Spark: profit down massively, huge job cuts there.

Kitchen Things: in receivership.

Now, some of that will be absolutely because of poor decisions, but some of that is because we are in an economic funk - recession - as bad as anything in my entire life.

I mean, the last time we saw anything this bad was the 80s, but some indicators say the 70s.

So why the Reserve Bank hasn't cut more, including today, is baffling. They debated it, by the way - it did occur to them.

Four of them voted for the 25 basis point cut that we got, two of them voted for a double cut of 50 basis points. That mean two of them can see what the rest of us can see, but the four win, unfortunately.

The fact that they cut today and indicated they will cut more than they had previously expected to cut is a sign that they made a mistake when they didn't cut last time and opted to hold instead.

The Reserve Bank is once again caught on the hop, making the economy worse than it needs to be.

If only Jarrod Kerr was running the joint.

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Episode Transcript

Speaker 1 (00:00):
The longer that this economic funk that we find ourselves
and goes on, the more that Jared kurve Kiwi Bank
is being proven right, isn't he? And we had a
cut today it was twenty five basis points down to
three percent now with the expectation that we will maybe
get down to two point five percent before this thing
bottoms out. Two point five percent is where Jared Kerr
has been saying four months that we need to get to.

(00:21):
But even though he's been saying it, eye locked it
and looked like at least September last year, if not earlier,
Even though he's been saying it since then, the Reserve
Bank has only just caught up with him. Up to now,
they've been talking about two point seventy five three percent
maybe Now. What you should take from that is that
the Reserve Bank is surprised by what Jared Kerr and
you could argue many of us have been seeing for ages,

(00:41):
which is that the economy is properly, properly, properly stuffed,
like stuffed enough that they should be cutting a lot
more than they are. Why this is a surprise to
them is beyond me, because you just need to look
at what's going on with business today? To see at
Fletcher a massive loss, spark profit down, massively, huge job cuts,
their kitchen things in receivership. Now, some of that will

(01:04):
be absolutely because of poor decisions, but some of that
is because we are in an economic funk come recession
as bad as anything in my entire life. I mean,
the last time we saw anything this bad was the eighties,
some indicators say the seventies. So why the Reserve Bank
hasn't cut more, including today, is baffling. They debated it,
by the way, it did occur to them. Four of

(01:24):
them voted for the twenty five percent of the twenty
five basis point cut that we got. Two of them
voted for a double cut of fifty basis points. Two
of them can see what the rest of us can see,
but the four wins. Unfortunately, the fact that they cut
today and indicated they will cut more than they had
previously expected to cut is a sign that they made
a mistake when they didn't cut last time and opted

(01:46):
to hold instead. The Reserve Bank is once again caught
on the hop, making the economy worse than it needs
to be. If only Jared Kerr was running the joint.
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