Best of Business

• Perspective with Heather duPlessis-Allan: The GDP numbers are the fault of the Reserve Bank, not Nicola Willis

  How is it that we are having a conversation today about whether Nicola Willis needs to quit her portfolio because of yesterday's shock GDP number? This is crazy. What happened yesterday is not Nicola Willis's fault. It is the Reserve Bank's fault. It is not a matter of opinion. It is a fact. The Reserve Bank ratcheted up the official cash rate to slow down the economy and engineer a recession, to quote Adrian Orr. It's what he wanted to do. It is what he has actually done successfully. We now have had an enormous recession, and we are struggling to come out of that. That is not Nicola Willis's fault. Now, sure, I can lay some blame at Nicola Willis's feet. I can blame Nicola Willis for not doing enough to fix the state of the government's books.Probably not doing enough to get rundown places like Auckland Central going again, but that GDP number, that is fair and square, largely the Reserve Bank's problem, so she should not quit over what happened yesterday. However, I am prepared to admit that the fact that this discussion is even happening does speak to the enormous political pressure that she is under at the moment, because it is enormous. She is under a lot of political pressure. She is very much playing at a political disadvantage because a lot has gone wrong for her this year. Buttergate was all Nicola Willis pulling in Miles Hurrell for a chat, Gavin the cameras run after him. She created that. She has only just managed to save herself from being accused of being all talk and no action over the supermarkets, redeemed with a Hail Mary at the last minute. And for all the criticism that she lobbed Grant Robertson for spending too much, she spends more than him every single budget, and here we are two years into this administration, still waiting for their big plan as to how we turn this economy around. That is as finance minister and economic growth minister, her job, but she doesn't need to quit over what happened yesterday. Look, the bar for any minister to quit is very high, but for a finance minister, even more so. Just have a look at how badly Rachel Reeves in the UK is stuffing things up and crying in public. She is still in her job. Nicola Willis is nowhere near that, mainly because the GDP figure out yesterday is not her fault. And the fact that this is actually a discussion is somewhat mind-blowing. LISTEN ABOVESee omnystudio.com/listener for privacy information.

  --------  

  2:23

  --------

  2:23
• Peter Lewis: Asia business correspondent on China's economy slowing due to slump in investment

  China's economy continues to slow down after months of decline, and retail sales and industrial production are at their lowest levels of the year. Falling property prices are also to blame, with house prices in Beijing down 19% from last year. Asia business correspondent Peter Lewis says that despite this downturn and the trade war with the US, China's exports have kept at a steady level. He said that Xi Jinping's focus on expanding markets independent of the US is helping keep the economy moving. LISTEN ABOVESee omnystudio.com/listener for privacy information.

  --------  

  5:24

  --------

  5:24
• Sam Dickie: Fisher Funds expert on the US Federal Reserve moving to cut interest rates

  The US Federal Reserve has cut interest rates for the first time since December. It's a 0.25 point drop, much lower than US President Donald Trump wanted. Sam Dickie from Fisher Funds explained further. LISTEN ABOVESee omnystudio.com/listener for privacy information.

  --------  

  3:20

  --------

  3:20
• Kelly Eckhold: Westpac Chief Economist on what the latest GDP drop means for the economy

  The GDP drop has sparked concern among experts, and it's prompted many to update their economic outlook. GDP's fallen 0.9 percent in the June quarter - much further than the Reserve Bank and all economists had been expecting. Westpac Chief Economist Kelly Eckhold says Q3 indicators are already looking better, but the bank's upgraded their October OCR call. "We upgraded our October call from a 25 point cut to a 50 point cut...the GDP number was quite a bit weaker than everybody's predictions." LISTEN ABOVESee omnystudio.com/listener for privacy information.

  --------  

  4:59

  --------

  4:59
• Perspective with Heather du Plessis-Allan: The pressure's on the RBNZ to fix the economy - fast

  Well, I think it's fair to say that the GDP print has come in at something of a shock. The Reserve Bank was picking a contraction of 0.3 percent. The consensus was a contraction of 0.4 percent. The worst-case prediction from one of the banks was a contraction of 0.5 percent. It's come in at a contraction of 0.9 percent, which is basically twice as bad as most of us thought. Now, the immediate problem that we have is what this is going to do to confidence, because people are already scared. That is why it's taking this country so long to come out of recession, because every single piece of bad news like Trump's tariffs earlier this year freaks us out all over again, so we keep our wallets shut for longer. There are people out there who absolutely can afford to spend more money, but they're choosing not to because they do not know that they can trust that we're through the worst of it. This is part of the reason, if not one of the bigger reasons, why the Reserve Bank's cuts to the OCR are not stimulating the economy like the bank thought that they should be. And this number that we see today, I fear, is going to do this all over again. And it's gonna freak us out all over again. And I think the reason we're going to be freaked out all over again by this is that we think that the people who are in charge, mainly the Reserve Bank, but also the Government who keep telling us that the economy is definitely recovering, really have no idea how bad this is. Now, I think it is a little unfair to blame anyone but the Reserve Bank right now because they really deserve it. The verdict is in on this now, isn't it? They have well and truly stuffed this up, they have no idea what is going on in this economy. In July, which was only one month after Q2 ended, we'd just gone through this massive contraction - and the next month, they decided they didn't need to cut the cash rate anymore. They held the cash rate. That now should blow your mind. Just a month ago, they released their monetary policy statement forecasting the contraction at only 0.3 percent They got it wrong by a factor of 3 percent. Now, what them getting it so badly wrong now means is that the pressure is on them to fix this and fix this fast and do a double cut in October, really more to restore confidence than anything, because confidence is what we are very much lacking at the moment. LISTEN ABOVESee omnystudio.com/listener for privacy information.

  --------  

  2:22

  --------

  2:22

More Business podcasts

Trending Business podcasts

About Best of Business

Best of Business: Podcasts in Family