Of Interest

Under the leadership of President Donald Trump there's a danger the United States will become an autocratic nation, not unlike China, Saudi Arabia or Russia, and New Zealand should strive to avoid becoming the focus of Trump's wrath, suggests David Cay Johnston.

Johnston, a Pulitzer Prize winning investigative journalist, co-founder of DCReport and journalism professor at Rochester Institute of Technology, spoke to interest.co.nz in a new episode of the Of Interest podcast.

Johnston first met Trump in Atlantic City in 1988, and has probed and written about the affairs of Trump for decades.

Domestically he says Trump's under pressure from his MAGA (make America great again) base with the economy not doing well, and over the Epstein files and the US attack on Iran. With the US mid-term elections looming in November, Johnston says checks and balances via the likes of Congress, the courts and the Constitution supposed to limit the President's power, are failing.

"The checks and balances system isn't working, plain and simple. He thinks he's the world's dictator. He hasn't

consolidated his power even in the US, but that's his goal, totally consolidate his power, to be totally unaccountable, unfortunately," Johnston says.

He says Trump's presidency could effectively be over if he loses control of the House and Senate in the mid-term elections, which is "weighing on his mind." Against this backdrop Johnston says voter intimidation and suppression is underway.

Asked how the Trump era may end, Johnston says he fears for US democracy.

"At the moment, the United States is a dictatorship. It is not fully consolidated, but it is a dictatorship. Whether we restore our democracy is not clear at this point. We may cease to be a democracy."

Johnston says opposition emerged through the No Kings demonstrations, which he'll be watching closely over the coming US summer. These protests come against the backdrop of danger the US becomes "a huge autocratic nation, not unlike Xi's China, MBS's [Mohammed bin Salman Al Saud's] Saudi Arabia, [and] Putin's Russia.

"And that would be a terrible thing for the whole world."

For NZ, as a small, trading nation, Johnston suggests at this stage we ought to keep our heads down.

"The key objective is to not become the focus of Donald's wrath because he could say, 'well, I'm going to prevent anyone from moving to New Zealand or coming from New Zealand. I'm going to ban Air New Zealand. He could do all sorts of things to make trouble. So my fundamental advice would be just try to stay off his radar, go on living your lives."

In the podcast audio Johnston talks in more detail about why he believes Trump's tariffs are illegal, the US war with Iran, attack on Venezuela and other countries Trump could target, Trump and the Epstein files, the US economy, who Trump listens to and who influences him, the mid-term and primary elections and more.

Johnston previously spoke to interest.co.nz about Trump in 2016 and in 2018.

*You can find all previous episodes of the Of Interest podcast here.

Artificial intelligence (AI) should be a key election year issue especially given the technology has major potential to help improve New Zealand's productivity, says Mark Laurence.

Laurence, founder and CEO of Ten Past Tomorrow which is an AI consultancy and education business, spoke to interest.co.nz in a new episode of the Of Interest podcast.

"I'm kind of flabbergasted that it hasn't become a political talking point," Laurence says, noting AI "has become a really hot political topic" in the United States over the past six months.

He describes AI as "a general purpose technology."

"My focus is how does New Zealand, as a small, educated, economically prosperous and politically stable country, how do we become the best users of this technology where we as a nation, we're very skilled and very literate and know how to use it, know when to use it, know how to use it responsibly and ethically?"

"Because you can scale from the individual productivity to national GDP on a very clear line."

Laurence points out Singapore is spending NZ$1.25 billion over five years with the goal of tripling their AI practitioner workforce. The United Kingdom is investing US$500 million per year over the next five years with the goal of having 10 million AI literate workers by 2030. And Finland is spending €100 million per year for the next four years in AI readiness training.

So does he think getting a more AI literate NZ population needs to be government led?

"I do [think so] and I think importantly it needs to be non-partisan," Laurence says.

" Whichever party wins [the election], this needs to happen. It's like to me, it's that critical to New Zealand productivity challenges. And so yes, it absolutely needs to be publicly led."

However, he adds that in the countries making public investment he cites, private investment generally "floods in behind it."

"We [NZ] have an AI strategy which was released last year. It's pretty flimsy and really if you kind of read between the lines, it's basically saying at the moment we're leaving this to the private sector to kickstart. I do think the stimulus needs to come, the action needs to come, the motivation needs to come, from public sectors," says Laurence.

"Simply, this nation has an obsession with productivity challenges that we've developed in the last number of years. That's why I say sitting still is not a neutral option, it's a decision with consequences. The gap compounds [and] moves from being a gap to actually a chasm."

In the podcast audio Laurence also talks about how NZ businesses are working with and thinking about AI, AI training, education opportunities from AI, guardrails and regulation, the previous technological breakthrough he compares AI with, how the effect and harms of AI on children could be worse than social media, why he says "AI is going to

make lazy people super lazy and it will give dedicated people superpowers," and more.

*You can find all previous episodes of the Of Interest podcast here.

​By Gareth Vaughan
The Reserve Bank of Australia's decision to lift its cash rate 25 basis points this week means it's now 160 basis points higher than the Reserve Bank of New Zealand's official cash rate highlighting differing levels of assertiveness between the two central banks, Imre Speizer, Head of New Zealand Strategy at Westpac, says.
The RBS's cash rate is now at 3.85% with the RBNZ's OCR at 2.25%. Speaking in a new episode of the Of Interest podcast, Speizer says it has been 13 or 14 years since there has been such a gap, with the two economies tending "to cycle together most of the time."
"It comes down to a different central bank approach. The RBA has deliberately maintained a fairly dampened approach to tackling either low inflation or high inflation. So when it has needed to hike or cut, it has done [so] in a very cautious and drawn out manner. And by doing so it hasn't had to flip around as much as the likes of some other countries," says Speizer.
"The central bank of New Zealand has been pretty much an activist in terms of tackling inflation. So when inflation was high in the most recent cycle it went fairly hard and hiked rates a lot to bring it back down again, and that then amongst other things did help to engineer a brief recession."
"It paid a cost to do so but it got inflation under control. Now we're basically coming out of that era and [economic] growth is starting to pick up. And so the Reserve Bank [of NZ] is now faced with the task of thinking well at what point do we need to start thinking about pushing rates up to prevent inflation from running away?"
"I guess it just means the assertiveness of the relative central banks is probably explained [in] why we've ended up with such big differences between New Zealand interest rates and say the Australian interest rate. In time that will rectify itself and will get back to something that looks a bit more normal, I.E. Kiwi rates a little bit higher than Aussie rates. But I think it's going to be some way down the track," Speizer says.
He says lots of people are asking how the cash rate differential between New Zealand and Australia might play out with mortgage rates.
"There shouldn’t be any direct impact if the cause of Australian rate rises is unique to Australia. But much of the time, there is a common global factor at play, so New Zealand rates do follow Australian and US term rates," Speizer says answering a follow-up question to the podcast interview.
"Also, if the strong Australian economy is seen as eventually benefitting New Zealand’s economy, New Zealand term rates could rationally follow Australian rates higher in dampened fashion."
In the podcast audio he also speaks about the direction of swap rates and what it means for mortgage rates, what the yield curve's suggesting at the moment, the outlook for NZ government bonds, the impact the volatility of US President Donald Trump's administration has on the US dollar and financial markets more broadly, incoming Federal Reserve Governor Kevin Warsh, the impact of US government shutdowns on economic data availability, geopolitics and more.​

By Gareth Vaughan
A new all-of-government strategy to tackle organised crime aims to make New Zealand the hardest place in the world for organised criminal groups to do business and following the money is key to the fight, says the Chairman of the Ministerial Advisory Group on Transnational, Serious and Organised Crime.
One of the Ministerial Advisory Group's recommendations is to broaden the legal definition of money laundering, with barrister Steve Symon, who chaired the Advisory Group, saying money is the key driver.
"The reason they operate in New Zealand is money. I'm not saying that we will cure the problem of organised crime globally, but we can make New Zealand the hardest place for organised crime to operate, such that they'll see other markets as more lucrative," Symon says in a new episode of interest.co.nz's Of Interest podcast.
"We're effectively saying 'organised crime don't operate here, go elsewhere to do that.' We have to make it as challenging as possible for organised crime to profit from it, to use money."
"The money laundering regime is a key aspect of that. Obviously there has to be a way for organised crime to take the money that they get from crime and benefit from it. Transfer it, launder it... into a way that they can use it," says Symon.
"The challenges that we have in relation to the current money laundering regime [are] probably best demonstrated by the small number of money laundering cases that go through our courts. We know that the drug trade is driven by organised crime. And...theoretically, for every drug case you should have a money laundering case as well."
Symon says fortunately most New Zealanders won't be aware of the problem of organised crime, but they will see the symptoms of it.
"The methamphetamine use, particularly in our rural communities, [which] is decimating some of our rural communities. The advent of the fraud that is spreading. One in 10 New Zealanders are the victim of fraud and that number is escalating."
"And there'll be touch points that the public are not aware of, where they are interacting with people who are exploited migrants who have been exploited by organised crime," says Symon.
"We will see new and emerging threats through organised crime, such as a black market in tobacco which has been, escalating in New Zealand. And these things are growing and becoming more complex. What we're also seeing is organised crime working in more nefarious ways. So working on corrupting individuals, corrupting New Zealanders going about doing their work to try and maximise the return they can get from their crime."
"Organised crime is working more and more like large commercial enterprises. So when you think of large companies and how they spend their energy on facilitating and maximising the return that they can get for their investors, it's the same logic you should apply to organised crime," says Symon.
In the podcast audiohe also talks about the challenge of cash "the primary currency of organised crime" and the recommendation to stop cash payments in certain industries, why the Advisory Group recommends a dedicated Transnational, Serious and Organised Crime Minister, funding the fight against organised crime, why more is needed from Inland Revenue, working across government agencies, the role of the private sector, cryptocurrency, the need for international cooperation and more.
Just before Christmas Associate Police Minister Casey Costello unveiled a new all-of-government strategy to tackle organised crime. Costello released this strategy document, and this action plan. Details on the Ministerial Advisory Group and all its reports can be found here.
*You can find all episodes of the Of Interest podcast here.

​By Gareth Vaughan
Governor Anna Breman has implied the Reserve Bank's Monetary Policy Committee will increase the Official Cash Rate (OCR) in the run-up to November's election if members believe this is what is required.
"We are statutory independent. We are an independent central bank, like you point out, and we will do what is best for the New Zealand economy and to reach our inflation target," Breman told interest.co.nz in a new episode of the Of Interest podcast.
She was asked if the Reserve Bank believes increasing the OCR is necessary, she would be comfortable doing so in the run up to November's election.
Breman was speaking on Friday, after the release of Statistics NZ's December quarter Consumers Price Index (CPI) showed annual inflation at 3.1%, above the Reserve Bank's 1% to 3% target range.
"We are carefully looking through all the data. It's clear that there are some items in there that typically are very volatile. They can change a lot between different quarters. But of course 3.1% is high and it means that inflation that's been hurting households for many years is still above where we want it to be, but the outlook is still favorable in terms of inflation going forward. So it's also important to stress that we will focus on getting inflation back in the target band and towards the midpoint of the target band," Breman said.
The Reserve Bank reviews the OCR for the first time this year on February 18.
In a note following the CPI release BNZ Head of Research Stephen Toplis said financial markets had almost fully priced in a first OCR increase for the Reserve Bank's September 2 Monetary Policy Statement. And BNZ's economists have brought forward their expectations for a first OCR hike to September 2 from February 2027.
"One thing that needs to be taken into consideration is the General Election on November 7. The Reserve Bank is operationally independent so it can broadly do what it wants when it wants, but central banks are not keen to become embroiled in election campaigns if it can be avoided," said Toplis.
"In our opinion, this means the 28 October Monetary Policy Review would be far from optimal for a first rate hike. Moreover, it’s always easier to tell the full story with a complete Monetary Policy Statement when a hiking cycle, or cutting, begins."
Breman said she doesn't comment directly on market pricing. The OCR is currently at 2.25%, having been reduced from 5.50% since July 2024.
In the podcast audioBreman speaks further about inflation including the challenges facing households, whether she expects help from government with the inflation fight, limits to Reserve Bank monetary policy, her recent support of US Federal Reserve Chairman Jerome Powell and the response from Foreign Minister Winston Peters and Finance Minister Nicola Willis, risks around the Fed becoming less independent when President Donald Trump appoints a new Chairman, what climate change means for the Reserve Bank, her thoughts on a potential central bank digital currency, and more.
*You can find all episodes of the Of Interest podcast here.​