October 19, 2025 • 6 mins
The Deputy Prime Minister, and Act Party leader, comments on the quarterly CPI Inflation Index - 3% up from 2.7% - with the leading contributors being local council rates and energy costs. Plus, with two big farmer votes coming up, why is Winston Peters meddling with his nationalistic views? We also look at politically motivated mega-strikes.
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Episode Transcript
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Speaker 1 (00:00):
Here's the Deputy Prime Minister, Act Party leader. Today's headline
story is the latest quarterly CPI index ie inflation. For
the past twelve months, we have been running at three
percent inflation, up from two point seven percent in the
June quarter. David Seymour, no surprise here, But you think
(00:20):
the Reserve Bank might be surprised. Will this spook them
when it comes to future drops in the ocr.
Speaker 2 (00:27):
Well, you've got to remember people say it's crazy that
we only get information every three months and then make
decisions looking through the rearview mirror. Of course we don't.
There is a bank have their own modeling, they have
lots of sources of data, and so I suspect the
fact that they did a fifty point cut just a
couple of weeks ago suggests that they were ready for
(00:50):
something like this and the price did in. Having said that,
you know, if the Reserve Bank genuinely are surprised by
this two months old data, then you would expect that
they'll be take giving pause for thought and that there
might not be any more interest rate cuts for a while.
Speaker 1 (01:10):
One of your predecessors, ad Act Rodney Hyde, came out
with the idea that local body rates, because that's a
big contributor to this inflation number should be capped to
the rate of inflation ie three percent plus a maximum
of one more percentage point. So that would mean no
one would have to pay more than four percent this
year of an increase in their local body rates. Spell
(01:33):
I'd vote for that.
Speaker 2 (01:34):
David Seymour, Yeah, I learn a lot of economics from Rodney.
He was an award winning economics lecturer via at Lincoln. Actually, however,
I don't think he got everything right, and I think
skeptical and reasonable people should have some doubts about a
rates cap, starting with the basic maxim that of something
(01:57):
sounds too good to be true, it probably is. The
reality we face is years of under investment in infrastructure,
leaky pipes and major problems up and down the country.
Now that's a problem we need to solve, and I
think resource management law reform works. I think reforming the
layer of local government called regional councils works. I think
(02:21):
simplifying the building standards worked. I think there's a lot
of stuff we can be doing to get the costs down.
But if you can't get the costs down, then a
rates cap is not going to work. They're either going
to raise other types of user fees, they are going
to pakon or debt. They're just going to defer the
(02:41):
maintenance and run capital assets down further. Everything but sensible governance.
On the other hand, if you figured out how to
get those costs down, then you may not need a
rates cap anyway. So look, I'm a skeptic on it.
I know Rodney supported it, I know other people in
the government day support it, but I just asked the question,
(03:03):
if you've solved the problem of a cost blowout, do
you still need it? And if you can't solve the
problem of the cost blowout, is it going to work?
Speaker 1 (03:11):
Okay, let's have a look at the two big farmer
votes coming up this week. The Alliance Group vote with
the Dawn Meats deal is happening as we speak. Will
know the result of that one tomorrow. And later this
month we obviously have the Fonterra vote on the divestment
of the consumer brands business. Does ACT have a view
on this or David Seymour should politicians stay the hell
(03:35):
out of it? Because I had a crack at Winston
poking his nationalistic nose into this. Surely it's up to
the farmers who own the co op to decide.
Speaker 2 (03:45):
Well, that is exposition, and I think it comes back
to values. I think that if you make an effort,
you should be rewarded, and if you own something, you
should have control over it, and if you do something wrong,
you should face consequences, and that this is just life
in general. I don't think that people who get up
(04:06):
at five in the morning are to work their way
up from contract milking, perhaps share milking, to eventually own
a farm and be shareholders and Fonterra. I don't think
people like that should lose their decision making power to
a politician interfering. And I say that as somebody who
I lead a party. We've got two actual Fonterra shareholders,
(04:27):
and Mark Cameron and Andrew Hogart, And you think how
crazy it would be if I, as a politician, said guys,
I think this is how you should vote, because you
know I know all about it. Well, I don't, and
I wouldn't dream of telling Mark or Andrew how to
vote as Fonterra shareholders. And I'm not going to start
telling the other thousands of Fonterra shareholders or Alliance shareholders
(04:51):
for that matter how they should vote.
Speaker 1 (04:53):
Let's just finish on politically motivated megastrikes. That's all we're
going to see this week. I cannot believe I may
have read fake news. I don't know that on the agenda.
On the top of the agenda was Palestine for striking teachers.
What the hell's going wrong with this country?
Speaker 2 (05:10):
Well, spare a thought for all the teachers out there
who actually don't believe in all this stuff, but they
join the union because they need protection if they are
ever falsely accused of doing something wrong. And I know
there's teachers out there like this. They don't agree with
the politics of the Post Primary Teachers Association, that is
the union. They signed up because they basically want to
(05:32):
help children reach their full potential, live good lives, and
be good citizens. They have to put up with all
this as just an added burden of being part of
the sector, and so I just think it's crazy. The
stuff about Palestine is true. However, my thoughts go out
to all those students who actually have exams right now,
those parents having to reorganized their lives around it, and
(05:55):
all those teachers who don't actually believe in any of us.
They just want to help children reach their potential and
they can appreciate. But while everyone would like more money,
it's a very tough situation for the entire New Zealand
economy right now. Teachers have had fourteen and a half
percent increase in the last three years. That's more than
the vast majority of the tax payers who are called
(06:16):
on to pay for this stuff, including of course they're
students who will be paying back debt on any extra
money that we borrow right now. So there's just a
need for a bit of realism and I think we're
getting it from actually from most people, but the union
organizes at the top of the union heap. They seem
to be on another planet.
Speaker 1 (06:36):
David Seymour, thanks for your time as always on the Country.
Speaker 2 (06:39):
Yeah, thank you.
Here's the Deputy Prime Minister, Act Party leader. Today's headline
story is the latest quarterly CPI index ie inflation. For
the past twelve months, we have been running at three
percent inflation, up from two point seven percent in the
June quarter. David Seymour, no surprise here, But you think
(00:20):
the Reserve Bank might be surprised. Will this spook them
when it comes to future drops in the ocr.
Speaker 2 (00:27):
Well, you've got to remember people say it's crazy that
we only get information every three months and then make
decisions looking through the rearview mirror. Of course we don't.
There is a bank have their own modeling, they have
lots of sources of data, and so I suspect the
fact that they did a fifty point cut just a
couple of weeks ago suggests that they were ready for
(00:50):
something like this and the price did in. Having said that,
you know, if the Reserve Bank genuinely are surprised by
this two months old data, then you would expect that
they'll be take giving pause for thought and that there
might not be any more interest rate cuts for a while.
Speaker 1 (01:10):
One of your predecessors, ad Act Rodney Hyde, came out
with the idea that local body rates, because that's a
big contributor to this inflation number should be capped to
the rate of inflation ie three percent plus a maximum
of one more percentage point. So that would mean no
one would have to pay more than four percent this
year of an increase in their local body rates. Spell
(01:33):
I'd vote for that.
Speaker 2 (01:34):
David Seymour, Yeah, I learn a lot of economics from Rodney.
He was an award winning economics lecturer via at Lincoln. Actually, however,
I don't think he got everything right, and I think
skeptical and reasonable people should have some doubts about a
rates cap, starting with the basic maxim that of something
(01:57):
sounds too good to be true, it probably is. The
reality we face is years of under investment in infrastructure,
leaky pipes and major problems up and down the country.
Now that's a problem we need to solve, and I
think resource management law reform works. I think reforming the
layer of local government called regional councils works. I think
(02:21):
simplifying the building standards worked. I think there's a lot
of stuff we can be doing to get the costs down.
But if you can't get the costs down, then a
rates cap is not going to work. They're either going
to raise other types of user fees, they are going
to pakon or debt. They're just going to defer the
(02:41):
maintenance and run capital assets down further. Everything but sensible governance.
On the other hand, if you figured out how to
get those costs down, then you may not need a
rates cap anyway. So look, I'm a skeptic on it.
I know Rodney supported it, I know other people in
the government day support it, but I just asked the question,
(03:03):
if you've solved the problem of a cost blowout, do
you still need it? And if you can't solve the
problem of the cost blowout, is it going to work?
Speaker 1 (03:11):
Okay, let's have a look at the two big farmer
votes coming up this week. The Alliance Group vote with
the Dawn Meats deal is happening as we speak. Will
know the result of that one tomorrow. And later this
month we obviously have the Fonterra vote on the divestment
of the consumer brands business. Does ACT have a view
on this or David Seymour should politicians stay the hell
(03:35):
out of it? Because I had a crack at Winston
poking his nationalistic nose into this. Surely it's up to
the farmers who own the co op to decide.
Speaker 2 (03:45):
Well, that is exposition, and I think it comes back
to values. I think that if you make an effort,
you should be rewarded, and if you own something, you
should have control over it, and if you do something wrong,
you should face consequences, and that this is just life
in general. I don't think that people who get up
(04:06):
at five in the morning are to work their way
up from contract milking, perhaps share milking, to eventually own
a farm and be shareholders and Fonterra. I don't think
people like that should lose their decision making power to
a politician interfering. And I say that as somebody who
I lead a party. We've got two actual Fonterra shareholders,
(04:27):
and Mark Cameron and Andrew Hogart, And you think how
crazy it would be if I, as a politician, said guys,
I think this is how you should vote, because you
know I know all about it. Well, I don't, and
I wouldn't dream of telling Mark or Andrew how to
vote as Fonterra shareholders. And I'm not going to start
telling the other thousands of Fonterra shareholders or Alliance shareholders
(04:51):
for that matter how they should vote.
Speaker 1 (04:53):
Let's just finish on politically motivated megastrikes. That's all we're
going to see this week. I cannot believe I may
have read fake news. I don't know that on the agenda.
On the top of the agenda was Palestine for striking teachers.
What the hell's going wrong with this country?
Speaker 2 (05:10):
Well, spare a thought for all the teachers out there
who actually don't believe in all this stuff, but they
join the union because they need protection if they are
ever falsely accused of doing something wrong. And I know
there's teachers out there like this. They don't agree with
the politics of the Post Primary Teachers Association, that is
the union. They signed up because they basically want to
(05:32):
help children reach their full potential, live good lives, and
be good citizens. They have to put up with all
this as just an added burden of being part of
the sector, and so I just think it's crazy. The
stuff about Palestine is true. However, my thoughts go out
to all those students who actually have exams right now,
those parents having to reorganized their lives around it, and
(05:55):
all those teachers who don't actually believe in any of us.
They just want to help children reach their potential and
they can appreciate. But while everyone would like more money,
it's a very tough situation for the entire New Zealand
economy right now. Teachers have had fourteen and a half
percent increase in the last three years. That's more than
the vast majority of the tax payers who are called
(06:16):
on to pay for this stuff, including of course they're
students who will be paying back debt on any extra
money that we borrow right now. So there's just a
need for a bit of realism and I think we're
getting it from actually from most people, but the union
organizes at the top of the union heap. They seem
to be on another planet.
Speaker 1 (06:36):
David Seymour, thanks for your time as always on the Country.
Speaker 2 (06:39):
Yeah, thank you.
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