Of Interest

Gareth Vaughan
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  • BUSINESS NEWS

Longform interviews with key opinion makers about the New Zealand economy

  1. David Cay Johnston: NZ's objective with Trump should be 'to not become the focus of his wrath'

    4D AGO

    David Cay Johnston: NZ's objective with Trump should be 'to not become the focus of his wrath'

    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.

    35 min
  2. Mark Laurence: 'Flabbergasted that AI hasn't become a political talking point'

    FEB 23

    Mark Laurence: 'Flabbergasted that AI hasn't become a political talking point'

    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.

    33 min
  3. Imre Speizer: Differing levels of 'assertiveness' between RBNZ & RBA the reason for big cash rate difference

    FEB 6

    Imre Speizer: Differing levels of 'assertiveness' between RBNZ & RBA the reason for big cash rate difference

    ​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.​

    35 min

  4. JAN 30

    Steve Symon: Following the money while playing whack-a-mole against the large commercial enterprises of organised crime

    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.

    40 min
  5. Anna Breman: The new RBNZ Governor on inflation, being told off by Winston Peters & more

    JAN 23

    Anna Breman: The new RBNZ Governor on inflation, being told off by Winston Peters & more

    ​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.​

    23 min
  6. David Mahon: China, a country 'full of DeepSeeks,' now sees NZ as 'a country of diplomatic infidelity'

    02/19/2025

    David Mahon: China, a country 'full of DeepSeeks,' now sees NZ as 'a country of diplomatic infidelity'

    Prime Minister Christopher Luxon visiting India before China could be seen as an insult in China, Beijing-based New Zealander David Mahon says. But he says China's recently announced strategic partnership with the Cook Islands, through which NZ was kept in the dark, shouldn't be viewed as insult to, or provocation of, NZ. Mahon, who is Managing Director of Mahon China Investment Management and has lived in China since 1984, spoke to interest.co.nz in a new episode of the Of Interest podcast. Luxon, who before the 2023 election said achieving a free trade agreement with India would be a major strategic priority for a National government, is set to visit India next month. He's yet to visit China as Prime Minister, but is expected to do so this year. "If the Prime Minister had gone to China and conferred upon it as a great power the respect it deserved in the last year or so of his tenure, it'd be fine. But it's almost a statement of a diplomatic insult not going to China before going to India," Mahon said. He said potentially the prospects for NZ products in China over the next two to three years are very good, with China retaining a great need for protein, wanting to buy seafood, and NZ logs still selling reasonably well. However, Mahon suggested after a good relationship with China for many years, highlighted by the 2008 Free Trade Agreement (FTA), NZ is now seen as "a country of diplomatic infidelity." "And for most of my life, we've been the opposite of that. Under Helen Clark, John Key, Jim Bolger, we were the country that was respected. Now people are scratching their heads and saying, what's wrong with New Zealand? It seems to have lost its sincerity, its sense of loyalty." The recent signing of a China-Cook Islands comprehensive strategic partnership, which the NZ Government was kept in the dark over, shouldn't be viewed by NZ as an insult or provocation from China, Mahon said. The Cook Islands is a self-governing state in ‘free association’ with NZ with its citizens having NZ passports. "...what China is determined to do is to make sure that it retains this relationship with New Zealand, although New Zealand is struggling in many ways to hold up its end." "We shouldn't be too peevish that they [the Cook Islands] want to do a deal with someone with more money than us," Mahon said. "In the end, China is going to invest throughout the Pacific, where it can. Part of it is that it wants to express its influence." The Cook Islands-China agreement reportedly includes plans for co-operation on seabed mining, the establishment of diplomatic missions and preferential treatment in regional and multi-lateral forums, but excludes security ties. An attraction of the Cook Islands deal for China will "definitely" be minerals, Mahon said. "If you go back to the technological revolution, which is really what's occurring in Chinese manufacturing, they need these minerals very much," said Mahon. "China is actually very poor in resources." 'China is full of Deep Seeks' Meanwhile, Mahon said recent surprise around Chinese artificial intelligence (AI) company Deep Seek highlights westerners taking their eye off China and its burgeoning technology sector. "China's full of Deep Seeks. There are companies in China, the names of which we just have never heard of, that are about to change major sectors that influence our lives." So Deep Seek is like the first, I don't want to say shot across the bows because it makes a sort of military metaphor, but it is a flare, a signal." "This is what China's been focused on in the last 10 years. Getting away from making nylon socks and teddy bears and cheap stuff and making really good technology, really sophisticated technology. And so this is what's going to come out of China now in waves and make all our lives cheaper in terms of buying stuff that's important to us," said Mahon. "And it's going to be a major challenge to the major tech companies of the West, creating the kind of competition that markets run on. Innovation's driven by it. So this should be perceived as a positive thing." In the podcast audio Mahon talks about these issues in more detail, plus this week's meeting between President Xi Jinping and Chinese business leaders, the "shameful scandal" of NZ immigration and visas "violating the spirit" of the FTA, China's relationship with the United States in the time of Donald Trump's second presidency, tariffs, trade war, and the "ghastly concept" of potential military conflict between China and the US, possibly over Taiwan. "China doesn't want a war. China doesn't want to invade Taiwan. If China were to invade Taiwan, it would be out of the global financial system within hours. China within six months would face a massive economic crisis," he said. *You can find all episodes of the Of Interest podcast here.

    38 min
  7. Nicola Willis: Growing the economy without spending

    12/20/2024

    Nicola Willis: Growing the economy without spending

    Stats NZ’s final data release for the year revealed the economy has been shrinking at its fastest rate in three decades. While this may not be a very Merry Christmas, there is still hope for a Happy New Year. Treasury, the Reserve Bank, and most economists expect growth to resume in 2025 as interest rates fall. Consumer spending should pick back up and cheaper credit should make business investments more worthwhile.  But while private New Zealanders open up their wallets, the Government will continue to tighten its belt. Core Crown expenses are predicted to fall from almost 34% of GDP in 2025 to 31.5% by the end of the decade. This would be enough to balance the books—if you ignore annual losses at the supposedly self-funded Accident Compensation Corporation—and halt net core Crown debt at 45%. But Finance Minister Nicola Willis told Interest.co.nz this wasn’t her top priority.  “Our view is you can never ignore sensible fiscal policy, and it's irresponsible to indebt future generations to an extent that they won't be able to have the services that we have today,” she said in an interview. “But at the same time, you also need to make sure that you're maintaining today's services, that you're keeping the foundations for productivity, and that you are ensuring that your measures make sense—not just in the short term for coloring the books and making them look pretty—but will actually generate a sustainable basis for growth in the medium term”. Many left-leaning critics of the Finance Minster would like to see greater Government investment to support the growth forecasts next year. They worry a withdrawal in spending will hamstring the recovery and leave the economy less productive in the future. It may surprise you to hear that Willis agrees with them. She says it is “factually incorrect” to accuse her of austerity, as the Coalition’s fiscal policies are still stimulating demand.    “We have a government that is actually continuing to increase its overall levels of spending, both in absolute terms, but also as a proportion of the economy.  And actually, the fiscal impulse will be positive.” “But the point that we are making is this does need to unwind over time, and so we've set out a path of gradual fiscal consolidation, which we think is the responsible way to go”. She says policies which deregulate the economy, open New Zealand up to more foreign investment, and crack down on uncompetitive industries will be more important to future growth than fiscal stimulus.  Banking is one of these uncompetitive sectors in which she wants reform. She's already told Kiwibank to raise $500 million and the Reserve Bank to put more weight on competition when setting regulation policies, and is more than willing to go further.  “When I read through the Commerce Commission report on our banking sector, it couldn't have been any clearer to me that we have a major problem,” she said. “I have put the banks on notice and made it clear that if they want to do more of their nice talk about how they're going to be really good … that won't wash with us. They need to be acting or we will take further action, and there are a lot of options for what we can do there”.   She’s open to charging banks a special levy or tax, like in the United Kingdom and Australia, which recognises they benefit from an implied Crown guarantee and earn very high risk-adjusted returns as a result. Big banks beware!

    29 min
  8. Andrew Coleman: Swapping NZ's gas guzzling Holden government retirement income system for an EV

    10/10/2024

    Andrew Coleman: Swapping NZ's gas guzzling Holden government retirement income system for an EV

    The Government could run a second retirement income scheme alongside NZ Superannuation as part of a transition to a new system, but according to Andrew Coleman, this couldn't be done without an increase in taxes on older people, or more general tax increases. Fresh from his 13 part interest.co.nz series on NZ's government retirement income system and associated taxes, Coleman spoke to myself and Terry Baucher on a combined episode of the Of Interest podcast and the New Zealand Tax Podcast. Coleman is currently a visiting professor at the Asia School of Business in Kuala Lumpur while on extended leave from the Reserve Bank. He has also worked for Treasury and the Productivity Commission. The views expressed are his own. Coleman says the urgency for making change isn't just down to an ageing population and the increasing taxes he says young people will have to pay. It's also because those under 45 are inheriting a very costly system, which might not be what they like or want. He uses an analogy of a 22 year-old who recruits help from their father or uncle to buy a car. "And he says, 'oh, cars, I'm good at cars. You know, when I was a kid we had these great Holdens and you could put six people in them, everyone in the whole family would fit in them. And they had a big six litre engine'... And you say, 'oh, well that's maybe not what I wanted.' But he says 'oh look, I'll go and get you the car, just give me the money and I'll get you the car.' And so you give him ten grand and [he] comes back [with an] old Holden, which is a gas guzzler and not particularly safe." "And you've only got a girlfriend or a boyfriend and no kids and it's nothing like the car that you want and yet you've paid for it. And it's got these high ongoing costs because it's chewing down the petrol," Coleman says. "You wanted a little hybrid or electric car or maybe just a Toyota Corolla, which was quite small and fits in your little parking place. And it's a bit like that. Young people today are inheriting a [retirement income] system designed in the seventies when Holdens ruled. And it may not be what they want and it's very costly." In his series Coleman suggests a new pension system, which he calls KiwiSaver 2.1, which would be a shift from pay-as-you-go funded pensions to save-as-you-go funded pensions. I asked him whether a transition could be made to the new system for those under 45, with the current system kept in place for older people, without higher taxes on older people which he suggested in his series would be required to change to a new system. "There's no reason why you can't have two systems going. And one of the reasons is that your entitlement would depend on your birth date...that's very straightforward. We would just at some point introduce the second system for people under 45 and build it up and keep old people on the current system," says Coleman. "Can we do it without an increase in taxes on older people, or more generally? No." "There is a transition issue. It's like digging a hole. Once you've dug the hole, if you want to get out of the hole, you have to do some work to fill it in again. And so when we adopted a pay as you go system or expanded it significantly back in the 1970s, it meant that to reverse it, some future generations are going to have to be worse off than they otherwise would have been. And that's the political difficulty here. It's like there's this beautiful thing that you want over there, a beautiful island that you can go to, but you can't get there for free." "But there's goodwill out there. I think a lot of people my age... recognise that young people are paying a disproportionate amount of the costs and that if we can find a way of increasing taxes on ourselves in order to make the system better for younger people, that's something that a lot of people would be prepared to do now. It won't have to be a permanent increase in taxes. It's a transitory phenomenon," Coleman says. "Once we've got the new system up and running, taxes would come down and we would have a much better tax system. There should be, if we do this, a statue to the unknown 75 year-old who paid a few more taxes so that all the young New Zealanders of the future could be better off and have a better system." In terms of what tax(es) are used, Coleman says a transitional social security tax on older people is an option. Social security taxes, such as Accident Compensation Corporation levies, are paid on labour income. There's much more detailed discussion in the podcast audio including on taxes. *You can find all episodes of the Of Interest podcast here.

    1h 5m
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About

Longform interviews with key opinion makers about the New Zealand economy

Information

  • Creator
    Gareth Vaughan
  • Years Active
    2022 - 2026
  • Episodes
    110
  • Rating
    Clean
  • Copyright
    © interest.co.nz
  • Show Website
    Of Interest

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