New Zealand’s housing market obsession, the Reserve Bank’s response to Covid-19 and the ramifications of Trump’s imminent presidency were on the agenda as three of the country’s leading journalists sat down to discuss the political and economic state of the year.
In this episode of Roundtable, a three-part series on TVNZ+ hosted by John Campbell, he was joined by Q+A host Jack Tame and 1News’ business correspondent Katie Bradford for a chat on all things economy.
A major point of concern for many New Zealanders in 2024 remains the housing market, particularly the impact of high, though falling, interest rates.
Two-thirds of Kiwi household wealth is equity in a home and Bradford said interest rates had become a “national obsession” as a result.
“I get asked multiple times a day, what should I do with my interest rates? What’s happening? Should I lock in now? Should I go for floating?”
She said while some homeowners have chosen to lock in their rates, some like Tame have opted to float in the hope of a lower rate.
“I rolled the dice,” he said.
Bradford recently interviewed Reserve Bank governor Adrian Orr for Q+A, and he told her that he had no regrets about his Covid-era decisions which included large-scale asset purchases, funding for lending programme and “conventional” cuts to the OCR to keep money flowing into the economy.
She said Orr had faced a lot of criticism about the decision to put “too much” money into the economy.
“That created a huge boom in the housing market but also helped contribute to inflation as well. They have to take some responsibility.”
Tame wondered if behind closed doors the members of the monetary policy committee might say: “You know what, we probably should have started hiking rates a whole lot sooner, and maybe we could have started bringing those rates down a whole lot sooner as well.”
Campbell also touched on the international dimension of the economy discussion, particularly the impact of Donald Trump’s victory in the US presidential election.
Tame, who covered this election as well as Trump’s 2016 victory, said there was “no sense of surprise” this time around.
“The fact that Americans have experienced life under a Trump presidency, they’ve gone back to the status quo, and then they’ve said ‘you know what, actually we want the disruptor, we want the guy who sticks his middle finger to the Washington DC consensus and we’re going to have him as our president.'”
He said Trump’s tariff threats seem like a “great opportunity for New Zealand to keep a really low profile”.
“You can imagine a world in which he might say, maybe we’ll let New Zealand slip one through to the keeper here and get away without paying additional tariffs because we want them for Five Eyes and we’re hoping they might join AUKUS.”
Bradford said no one really knows what Trump is going to do.
“All we can do is prepare ourselves for whatever it might be.”
