Economists predict the Official Cash Rate will rise today, but opinions differ on whether it'll be a 25 basis point increase, or 50.

Mortgage advisory firm Squirrel Chief Executive, David Cunningham, has penned an open letter to the Reserve Bank Governor saying they shouldn't lift the OCR.

He says the effects of measures already taken are still unrolling.

He told Kerre Woodham his letter is born out of a frustration over economists accepting interest rates must rise more.

LISTEN ABOVE

Economists predict the Official Cash Rate will rise today, but opinions differ on whether it'll be a 25 basis point increase, or 50.
Mortgage advisory firm Squirrel Chief Executive, David Cunningham, has penned an <a href="https://www.squirrel.co.nz/blogs/housing-market/another-ocr-hike-is-not-what-we-need-an-open-letter-to-reserve-bank-governor-orr">open letter</a> to the Reserve Bank Governor saying they shouldn't lift the OCR.
He says the effects of measures already taken are still unrolling.
He told Kerre Woodham his letter is born out of a frustration over economists accepting interest rates must rise more.
LISTEN ABOVE

Join Kerre Woodham one of New Zealand’s best loved personalities as she dishes up a bold, sharp and energetic show Monday to Friday 9am-12md on Newstalk ZB. News, opinion, analysis, lifestyle and entertainment – we’ve got your morning listening covered.

Kerre Woodham Mornings Podcast

David Cunningham: Squirrel Chief Executive on his open letter to Reserve Bank Governor Adrian Orr

The headline in the Herald read “New Zealand population bombshell” – but is the news really that much of a bombshell? We know we have an ageing population. We know that we're not replacing ourselves with babies. And we know that there's going to be a real crunch when it comes to finding sufficient workers in the next 20 odd years.  

According to a report that the Herald quotes from Sir Peter Gluckman and Emeritus Professor Paul Spoonley, their new report People, Place and Prosperity says the colliding trends of a slowing population growth and a reliance on immigration to drive workforce and population growth, an ageing population requiring more public services, and growing ethnic diversity presents both opportunities and challenges. The opportunities include making the most of the skills, innovation, and creativity that such diversity can offer, but this can be undermined by political populism appealing to xenophobic tendencies – looking at you New Zealand First.  

We've known for some time now that we're not having enough babies to replace ourselves. In the late 19th century, women settlers had on average seven children, but this rate halved by the early 20th century. Births per women doubled after the Second World War, then dropped in the 1970s. By December 2017, it had fallen to an average of 1.81 live births per woman, below the 2.01 average maintained between 1980 and 2015 and now annual population growth has dropped from 1.7% in 23/24 to 0.7 in 24/25 and it’s projected to remain below 1% in the coming decades.  

Emeritus Professor Spoonley said the total fertility rate was at replacement level a decade ago, but last year it was the lowest it's ever been. You can't really blame young couples for not having families of five or six. I mean, what was normal a couple of generations ago seems aberrant now. Student loans, cost of housing, cost of living, an uncertain world. It's hardly surprising that families are restricting, that young couples are restricting their families. But the fact remains that even if AI fills some of the worker shortages, we're still going to need real life people to keep the country going. And if we're not making those people ourselves, then we're going to have to import them. And that's where Professor Spoonley says we have to have a reasonable, sensible discussion about what that will look like. 

“Let's have an adult conversation about this. Let's not descend to pointing fingers or making jokes or you know this is a serious issue. So I think we should all be involved and interested in this debate and let's try and keep it up. We're going to need a lot of workers in the future because our population is turning at this point because of declining fertility and ageing. So we're getting people exiting out of the workforce at the top end and we're getting fewer entering the workforce at the bottom end. So immigration becomes super important. I mean you and I rocking up to a hospital today, 40% of our nurses, I don't know what the number is for doctors, are overseas trained.” 

 Yes, quite. I mean what would we do with a number of the essential services without our migrant workers? So less of the not particularly clever jibes from Shane Jones and a bit more respect for the people who do choose to come here and contribute to our country and our wellbeing. Because remember, other countries are facing the same issue, or the same issues – an ageing workforce, a declining population. So we will be in competition with them for migrant workers.  

And it's no good thinking we can bribe or blackmail or entice or lure young women into filling their wombs. That's been tried overseas and it hasn't worked. Poland introduced a zero-income tax law for families with two or more children. Hungary, mothers who have four or more children are exempt from personal income tax. Hungary also offers a state subsidised family housing loan that provides low interest mortgages and partial debt forgiveness for married couples who commit to having children. Imagine. France, anyone who has two or more children receive a means adjusted payout depending on the number of children. Italy, Estonia, Turkey, I mean you name it. South Korea, Japan, they've all tried to entice women, couples to have more babies and it's not working.  

I don't know. Certainly talking to couples in their mid 30s, they would have more children if they felt they could afford them. Would zero income tax do it for you? Low interest mortgages? Would that do it for you? Is it an uncertain world that's putting you off bringing children into it? What is it that has meant that you have stopped at the children you have or chosen not to have children at all? Is it simply a matter of money? And when it comes to enticing people to come and live here, sure AI might fix some of the shortages, we're still going to need people, and we need to welcome them. Otherwise we really will just be a poorly serviced retirement village at the bottom of the South Pacific and that's all we will be. 

The headline in the Herald read “New Zealand population bombshell” – but is the news really that much of a bombshell? We know we have an ageing population. We know that we're not replacing ourselves with babies. And we know that there's going to be a real crunch when it comes to finding sufficient workers in the next 20 odd years. &nbsp;
According to a report that the Herald quotes from Sir Peter Gluckman and Emeritus Professor Paul Spoonley, their new report People, Place and Prosperity says the colliding trends of a slowing population growth and a reliance on immigration to drive workforce and population growth, an ageing population requiring more public services, and growing ethnic diversity presents both opportunities and challenges. The opportunities include making the most of the skills, innovation, and creativity that such diversity can offer, but this can be undermined by political populism appealing to xenophobic tendencies – looking at you New Zealand First. &nbsp;
We've known for some time now that we're not having enough babies to replace ourselves. In the late 19th century, women settlers had on average seven children, but this rate halved by the early 20th century. Births per women doubled after the Second World War, then dropped in the 1970s. By December 2017, it had fallen to an average of 1.81 live births per woman, below the 2.01 average maintained between 1980 and 2015 and now annual population growth has dropped from 1.7% in 23/24 to 0.7 in 24/25 and it’s projected to remain below 1% in the coming decades. &nbsp;
Emeritus Professor Spoonley said the total fertility rate was at replacement level a decade ago, but last year it was the lowest it's ever been. You can't really blame young couples for not having families of five or six. I mean, what was normal a couple of generations ago seems aberrant now. Student loans, cost of housing, cost of living, an uncertain world. It's hardly surprising that families are restricting, that young couples are restricting their families. But the fact remains that even if AI fills some of the worker shortages, we're still going to need real life people to keep the country going. And if we're not making those people ourselves, then we're going to have to import them. And that's where Professor Spoonley says we have to have a reasonable, sensible discussion about what that will look like.&nbsp;
“Let's have an adult conversation about this. Let's not descend to pointing fingers or making jokes or you know this is a serious issue. So I think we should all be involved and interested in this debate and let's try and keep it up. We're going to need a lot of workers in the future because our population is turning at this point because of declining fertility and ageing. So we're getting people exiting out of the workforce at the top end and we're getting fewer entering the workforce at the bottom end. So immigration becomes super important. I mean you and I rocking up to a hospital today, 40% of our nurses, I don't know what the number is for doctors, are overseas trained.”&nbsp;
&nbsp;Yes, quite. I mean what would we do with a number of the essential services without our migrant workers? So less of the not particularly clever jibes from Shane Jones and a bit more respect for the people who do choose to come here and contribute to our country and our wellbeing. Because remember, other countries are facing the same issue, or the same issues – an ageing workforce, a declining population. So we will be in competition with them for migrant workers. &nbsp;
And it's no good thinking we can bribe or blackmail or entice or lure young women into filling their wombs. That's been tried overseas and it hasn't worked. Poland introduced a zero-income tax law for families with two or more children. Hungary, mothers who have four or more children are exempt from personal income tax. Hungary also offers a state subsidised family housing loan that provides low interest mortgages and partial debt forgiveness for married couples who commit to having children. Imagine. France, anyone who has two or more children receive a means adjusted payout depending on the number of children. Italy, Estonia, Turkey, I mean you name it. South Korea, Japan, they've all tried to entice women, couples to have more babies and it's not working. &nbsp;
I don't know. Certainly talking to couples in their mid 30s, they would have more children if they felt they could afford them. Would zero income tax do it for you? Low interest mortgages? Would that do it for you? Is it an uncertain world that's putting you off bringing children into it? What is it that has meant that you have stopped at the children you have or chosen not to have children at all? Is it simply a matter of money? And when it comes to enticing people to come and live here, sure AI might fix some of the shortages, we're still going to need people, and we need to welcome them. Otherwise we really will just be a poorly serviced retirement village at the bottom of the South Pacific and that's all we will be.&nbsp;

Kerre Woodham: The matter of New Zealand's shrinking working population

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/ab06e943-1b47-4807-85eb-b43a000a802a/transcript

The New Zealand Liberation Museum – Te Arawhata, located in the historic fortress town of Le Quesnoy, France, commemorates one of New Zealand's most daring and successful military feats of World War I.

The museum opened on 11 October 2023 to provide a permanent place of remembrance for New Zealand's contributions on the Western Front.

Patron of the New Zealand Memorial Museum Trust, Sir Don McKinnon, joined Kerre Woodham to chat about the 'living memorial'. 

LISTEN ABOVE 

The New Zealand Liberation Museum – Te Arawhata, located in the historic fortress town of Le Quesnoy, France, commemorates one of New Zealand's most daring and successful military feats of World War I.
The museum opened on 11 October 2023 to provide a permanent place of remembrance for New Zealand's contributions on the Western Front.
Patron of the New Zealand Memorial Museum Trust, Sir Don McKinnon, joined Kerre Woodham to chat about the 'living memorial'.&nbsp;
LISTEN ABOVE&nbsp;

Sir Don McKinnon: NZ Memorial Museum Trust patron on French museum honouring kiwi soldiers

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/38a98e71-57d2-4e93-bc8a-b436003236a4/transcript

I like David Seymour's idea of teaching children the basics of money management by giving them $500 each. He floated the idea during a speech at a business event in Christchurch. The way it would work: the roughly 60,000 Year 11 s in this country would be given $500 in a controlled investment account with a structured pathway into real investing, possibly supported by investment platforms Sharesies or Blackbull. In term one, they choose a term deposit, a safe investment, but one that introduces the basic idea of storing capital so it can be used by someone else to produce, earning a return for the investor. In term two, they invest in a managed fund. This introduces the idea of risk. In term three, they invest in New Zealand equities, which introduces the idea of companies, and in term four, they're able to invest in assets from around the world, and all of a sudden, they learn about exchange rates and how much they matter.  

The ACT Party Leader said there would be regular tests of students' knowledge, which would establish whether they could progress to riskier investments. He suggested any returns could be placed in a student's KiwiSaver, it could be a credit on their student loan, or be given to them in cash. He proposed the initiative, which would cost about $30 million, could be funded from the roughly $600 million KiwiSaver annual subsidy. He said, well, you might be surprised to see ACT coming up with a policy giving out money. They normally stand on your own two feet and haul yourselves up by your bootstraps, but he argued the benefits would be realised. It's not a handout; it's an investment in young Kiwis to grow their own wealth. I really like it as an idea, and I'm not the only one. Neil Edmond is the CEO and co-founder of MoneyTime, a financial literacy programme for schools, and he was really positive about Seymour's idea when he spoke on the Mike Hosking Breakfast. 

“The Ministry of Education has done a great thing by making financial literacy mandatory in schools from next year, and so students from Years 1 to 10 are going to be learning the basics of personal finance and the basics of investing. But then the next logical step is to give them hands-on real life experience, and I think just even with $500 you can learn an awful lot just by having that practical hands-on experience.  

“There's a lot of that sort of entrepreneurial type experience where they have the bake stalls and the school fairs and they sell products and things like that. That's a business focused type activity, which is fantastic and it's really good that they do that. But what Seymour's suggesting or proposing is giving them experience around investing, which is a different type of creating wealth. And I think so many kids don't get that sort of opportunity, certainly not early on, and the earlier they start investing, obviously the better off they're going to be later on.” 

Well, yes. I think that's quite right. I mean, there are, it's not a completely unheard of idea for schools to do these kinds of programmes. There are schools before who've used their own initiative and kids have invested in share markets either with real money or with pretend money. They each have a share portfolio once they get to the senior level at school and follow the progress of the shares they've chosen throughout the year. And as Neil referred to, they set up businesses and involve themselves in marketing and that sort of thing as well. So it's not a completely off the wall idea. At the moment it is just that, it is not ACT policy yet. It was David Seymour saying, what do you think? We can make it policy, we'll listen to feedback, we'll see what you think.  

For those who are thinking, well, I'm on the bones of my bum trying to eke out daily meals from a loaf of bread and a can of baked beans, what's this bloody nonsense about giving kids $500? Well, maybe this sort of education would prevent that kind of poverty in the future. If we learnt how to manage what money comes in and learnt how to invest it properly, if we learnt how to save and make the money work for us, if you do have money left over, it's going to do more, according to those who know, for the country's financial maturity than any other scheme if all New Zealanders understood how money worked.  

There are a lot of people, I mean, I was the daughter of a bank manager, and I would call myself a financial illiterate. I'm a complete moron when it comes to money. Absolutely hopeless. I kind of, you know, pay my bills and I understand how that works. You pay your bills or you go to jail, and that's kind of basic. And I understand about capital, I've invested in KiwiSaver and I haven't got into debt and run up, so I mean, I'd probably give myself just a pass mark, but when it comes to creating wealth, no. Wouldn't have a clue. Pay my bills, save for my retirement in KiwiSaver, and that's about it. It'd be great to be able to hone the skills of those who already have innate talent as entrepreneurs and to give other people the kind of basics they need to understand how to make the most with what they've got. I'd really love to get your thoughts on this, as indeed would David Seymour. 

I like David Seymour's idea of teaching children the basics of money management by giving them $500 each. He floated the idea during a speech at a business event in Christchurch. The way it would work: the roughly 60,000 Year 11 s in this country would be given $500 in a controlled investment account with a structured pathway into real investing, possibly supported by investment platforms Sharesies or Blackbull. In term one, they choose a term deposit, a safe investment, but one that introduces the basic idea of storing capital so it can be used by someone else to produce, earning a return for the investor. In term two, they invest in a managed fund. This introduces the idea of risk. In term three, they invest in New Zealand equities, which introduces the idea of companies, and in term four, they're able to invest in assets from around the world, and all of a sudden, they learn about exchange rates and how much they matter. &nbsp;
The ACT Party Leader said there would be regular tests of students' knowledge, which would establish whether they could progress to riskier investments. He suggested any returns could be placed in a student's KiwiSaver, it could be a credit on their student loan, or be given to them in cash. He proposed the initiative, which would cost about $30 million, could be funded from the roughly $600 million KiwiSaver annual subsidy. He said, well, you might be surprised to see ACT coming up with a policy giving out money. They normally stand on your own two feet and haul yourselves up by your bootstraps, but he argued the benefits would be realised. It's not a handout; it's an investment in young Kiwis to grow their own wealth. I really like it as an idea, and I'm not the only one. Neil Edmond is the CEO and co-founder of MoneyTime, a financial literacy programme for schools, and he was really positive about Seymour's idea when he spoke on the Mike Hosking Breakfast.&nbsp;
“The Ministry of Education has done a great thing by making financial literacy mandatory in schools from next year, and so students from Years 1 to 10 are going to be learning the basics of personal finance and the basics of investing. But then the next logical step is to give them hands-on real life experience, and I think just even with $500 you can learn an awful lot just by having that practical hands-on experience. &nbsp;
“There's a lot of that sort of entrepreneurial type experience where they have the bake stalls and the school fairs and they sell products and things like that. That's a business focused type activity, which is fantastic and it's really good that they do that. But what Seymour's suggesting or proposing is giving them experience around investing, which is a different type of creating wealth. And I think so many kids don't get that sort of opportunity, certainly not early on, and the earlier they start investing, obviously the better off they're going to be later on.”&nbsp;
Well, yes. I think that's quite right. I mean, there are, it's not a completely unheard of idea for schools to do these kinds of programmes. There are schools before who've used their own initiative and kids have invested in share markets either with real money or with pretend money. They each have a share portfolio once they get to the senior level at school and follow the progress of the shares they've chosen throughout the year. And as Neil referred to, they set up businesses and involve themselves in marketing and that sort of thing as well. So it's not a completely off the wall idea. At the moment it is just that, it is not ACT policy yet. It was David Seymour saying, what do you think? We can make it policy, we'll listen to feedback, we'll see what you think. &nbsp;
For those who are thinking, well, I'm on the bones of my bum trying to eke out daily meals from a loaf of bread and a can of baked beans, what's this bloody nonsense about giving kids $500? Well, maybe this sort of education would prevent that kind of poverty in the future. If we learnt how to manage what money comes in and learnt how to invest it properly, if we learnt how to save and make the money work for us, if you do have money left over, it's going to do more, according to those who know, for the country's financial maturity than any other scheme if all New Zealanders understood how money worked. &nbsp;
There are a lot of people, I mean, I was the daughter of a bank manager, and I would call myself a financial illiterate. I'm a complete moron when it comes to money. Absolutely hopeless. I kind of, you know, pay my bills and I understand how that works. You pay your bills or you go to jail, and that's kind of basic. And I understand about capital, I've invested in KiwiSaver and I haven't got into debt and run up, so I mean, I'd probably give myself just a pass mark, but when it comes to creating wealth, no. Wouldn't have a clue. Pay my bills, save for my retirement in KiwiSaver, and that's about it. It'd be great to be able to hone the skills of those who already have innate talent as entrepreneurs and to give other people the kind of basics they need to understand how to make the most with what they've got. I'd really love to get your thoughts on this, as indeed would David Seymour.&nbsp;

Kerre Woodham: Investing in young Kiwis' ability to grow their wealth seems like a good plan

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/8e6d2932-263a-4734-90e1-b436000d6e14/transcript

David Cunningham: Squirrel Chief Executive on his open letter to Reserve Bank Governor Adrian Orr

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