An economist says signs on inflation are finally looking more positive. 

GDP fell 0.3% in the September quarter, a much worse result than most economists predicted. 

The June quarter figures were also revised down from 0.9% to 0.5% growth. 

Former Reserve Bank economist Michael Reddell told Tim Dower that the Finance Minister is right in saying New Zealand needs urgent economic repair, and she's inherited a large fiscal deficit. 

He says a focus on expenditure restraint is important, and it's not the time for tax cuts.

LISTEN ABOVE

An economist says signs on inflation are finally looking more positive.  
GDP fell 0.3% in the September quarter, a much worse result than most economists predicted.  
The June quarter figures were also revised down from 0.9% to 0.5% growth.  
Former Reserve Bank economist Michael Reddell told Tim Dower that the Finance Minister is right in saying New Zealand needs urgent economic repair, and she's inherited a large fiscal deficit.  
He says a focus on expenditure restraint is important, and it's not the time for tax cuts. 
LISTEN ABOVE

A fresh and intelligent start to your day - catch the very latest international and domestic news developments, sport, entertainment and business on Early Edition with Ryan Bridge, on Newstalk ZB.

A fresh and intelligent start to your day - catch the very latest international and domestic news developments, sport, entertainment and business on Early Edition with Ryan Bridge, on Newstalk ZB.

Early Edition with Ryan Bridge

Michael Reddell: Former Reserve Bank Economist on the GDP falling by 0.3 percent in September

ASB chief economist Nick Tuffley says the window for low mortgage rates has closed, with multiple Official Cash Rate hikes expected later this year following the Reserve Bank’s decision to hold the rate at 2.25% yesterday. 

The RBNZ's Monetary Policy Statement said Official Cash Rate (OCR) increases would likely be required this year, predicting inflation would peak at 4.3% in the September quarter before returning to 2% mid-2027. 

Tuffley told Ryan Bridge people had been fixing their mortgages at higher interest rates since it became clear that there would be no further cuts to the OCR and it would soon start increasing. 

The Monetary Policy Committee was predicting the average interest rate on outstanding mortgages would climb to 5.3% over the next year, up from 4.9% in March. Tuffley said that increase was “not too dramatic” although the impacts would show up slowly. 

“Your window for a low mortgage ... really did slam shut late last year, and unfortunately we’ve already seen rates that have climbed to some degree and that will continue.” 

LISTEN ABOVE 

ASB chief economist Nick Tuffley says the window for low mortgage rates has closed, with multiple Official Cash Rate hikes expected later this year following the Reserve Bank’s decision to hold the rate at 2.25% yesterday.&nbsp;
The RBNZ's Monetary Policy Statement said Official Cash Rate (OCR) increases would likely be required this year, predicting inflation would peak at 4.3% in the September quarter before returning to 2% mid-2027.&nbsp;
Tuffley told Ryan Bridge people had been fixing their mortgages at higher interest rates since it became clear that there would be no further cuts to the OCR and it would soon start increasing.&nbsp;
The Monetary Policy Committee was predicting the average interest rate on outstanding mortgages would climb to 5.3% over the next year, up from 4.9% in March. Tuffley said that increase was “not too dramatic” although the impacts would show up slowly.&nbsp;
“Your window for a low mortgage ... really did slam shut late last year, and unfortunately we’ve already seen rates that have climbed to some degree and that will continue.”&nbsp;
LISTEN ABOVE&nbsp;

Nick Tuffley: ASB Chief Economist on the Reserve Bank's decision to hold the OCR at 2.25%

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/b033d894-5e36-465d-a12f-b457017b96bd/transcript

Very few frills or surprises are expected to be in today’s Budget.  

Auckland Business Chamber CEO Simon Bridges predicts a “sensible, prudent, boring, Presbyterian” Budget, with only a few goodies coming from reprioritised spending. 

He told Ryan Bridge he was more interested in the "nuggets" that pointed to the Government's future policy direction. 

He wanted Finance Minister Nicola Willis to “stake some strong positions, defend them and stick with them”, with details on how the Government planned to lift innovation, productivity and growth. 

Bridges believed most people understood restraint was required, but said he wanted to see evidence the Government knew the difference between “frittering” on large social projects and “real investment” that would grow the economy. 

LISTEN ABOVE 

Very few frills or surprises are expected to be in today’s Budget. &nbsp;
Auckland Business Chamber CEO Simon Bridges predicts a “sensible, prudent, boring, Presbyterian” Budget, with only a few goodies coming from reprioritised spending.&nbsp;
He told Ryan Bridge he was more interested in the "nuggets" that pointed to the Government's future policy direction.&nbsp;
He wanted Finance Minister Nicola Willis to “stake some strong positions, defend them and stick with them”, with details on how the Government planned to lift innovation, productivity and growth.&nbsp;
Bridges believed most people understood restraint was required, but said he wanted to see evidence the Government knew the difference between “frittering” on large social projects and “real investment” that would grow the economy.&nbsp;
LISTEN ABOVE&nbsp;

Simon Bridges: Auckland Business Chamber CEO on his expectations for Budget 2026

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/076db849-8647-466b-a7cd-b45701789c48/transcript

The Budget is always a fizzer in the sense that most of it is announced days in advance. 

There are a few sweeteners on the day, but this time, unless there's a rabbit about to be yanked from a hat, even they might be more Werther's Original than chocolate cake. 

The best time to read about the Budget is always the following Monday – that's when you get the real juice. 

All the cuts that pundits missed on the day become clear once the dust has settled. 

This Budget is one of many that's seen Nicola Willis spending more than Grant Robertson did. 

The surplus has been pushed out more times than you can shake a stick at. It's meant to be 2030. Nicola has no choice but to honour that. 

What she should do is come out today and tell us we're going to get there early, otherwise what has all 'cutting', relative term by the way, been for? 

Capital spending will be the aim of the game. 

Not all spending is bad, of course, handouts and made-up ministries? Not great. Roads and hospitals? Good. 

We're up over 40% of debt to GDP, and many people argue we can and should spend more. 

And yes, we can, and yes, we probably should. 

Not on day-to-day stuff – that's dumb. 

We are not America. We are not Europe. We don't have huge domestic demand and are quite prone to earthquakes and weather events. 

Any spending we do must be careful and calculated because let's be honest, our economy is more fragile to shocks, both at home and abroad. 

Which is why the surplus keeps getting pushed out. Which is why we need to unshackle ourselves from a structural deficit, and the sooner we can do that, the better off we'll be. 

The Budget is always a fizzer in the sense that most of it is announced days in advance.&nbsp;
There are a few sweeteners on the day, but this time, unless there's a rabbit about to be yanked from a hat, even they might be more Werther's Original than chocolate cake.&nbsp;
The best time to read about the Budget is always the following Monday – that's when you get the real juice.&nbsp;
All the cuts that pundits missed on the day become clear once the dust has settled.&nbsp;
This Budget is one of many that's seen Nicola Willis spending more than Grant Robertson did.&nbsp;
The surplus has been pushed out more times than you can shake a stick at. It's meant to be 2030. Nicola has no choice but to honour that.&nbsp;
What she should do is come out today and tell us we're going to get there early, otherwise what has all 'cutting', relative term by the way, been for?&nbsp;
Capital spending will be the aim of the game.&nbsp;
Not all spending is bad, of course, handouts and made-up ministries? Not great. Roads and hospitals? Good.&nbsp;
We're up over 40% of debt to GDP, and many people argue we can and should spend more.&nbsp;
And yes, we can, and yes, we probably should.&nbsp;
Not on day-to-day stuff – that's dumb.&nbsp;
We are not America. We are not Europe. We don't have huge domestic demand and are quite prone to earthquakes and weather events.&nbsp;
Any spending we do must be careful and calculated because let's be honest, our economy is more fragile to shocks, both at home and abroad.&nbsp;
Which is why the surplus keeps getting pushed out. Which is why we need to unshackle ourselves from a structural deficit, and the sooner we can do that, the better off we'll be.&nbsp;

Ryan Bridge: Budget spending must be careful and calculated

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/7b18d42c-6dcb-403a-b292-b4570159ea3b/transcript

Michael Reddell: Former Reserve Bank Economist on the GDP falling by 0.3 percent in September

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