Episodi
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I hope you are following the butter debate, specifically the Costco part of it.
Why? Because it's an insight into how the world works, especially the economic world, and why Nicola Willis and her crusade to convince us supermarkets are ripping us off might be wrong.
Willis sighted Costco the other day when she once again reminded us she is back to business on the supermarkets and looking to break them up, or twist their arms, or regulate them where it hurts, so we can all feel so much better about the price of a trolley full of goods.
What she knew, she said, was competition is good for prices.
As I tried to say, that is school cert economics and, although partially right, isn't the whole answer.
Butter at Costco is $10 per kilo. Elsewhere you can pay $10 and get half that.
In that very example is part of the story - it costs different amounts all over the place on any given day, depending on where you go, or when you go. It’s a bit like petrol.
Also a bit like petrol, the end price is driven by international pricing. We pay international prices because we make the stuff and sell it. Its how we make a living and we should be celebrating this.
If farmers weren't doing so well we would be truly stuffed.
Costco, because they are large, as in globally large, buy more of anything than anyone here locally. Because of that their price per unit drops and their margins are smaller. Scale counts
Also, as the consumers group pointed out, it’s a loss-leader for Costco.
In other words they are losing money on every pack they sell.
Why?
Because it gets you in the store to buy other stuff. Remember, at Costco you have already paid a membership fee to be there.
So their butter isn't really $10 per kilo. They are eating the difference, as Trump would say, in the hope you buy stuff in aisle eight.
Lots of supermarkets run loss leaders. They also put chocolate biscuits at eye line to tempt you. It’s a clever business.
But Costco and their butter is not a real economic equation.
And there is no magic in their pricing, the way Nicola seems to think there is.
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It's likely, and indeed forecasted, that if this Government is re-elected next year it will end its second term in 2029 having never run a surplus.
Now, that either means they spent too much, or they inherited a gargantuan mess.
The latter we know to be a fact. But the former is a bit debatable.
Depending on how you measure things, the forecast surplus in 2029 is so thin it might be less than nothing, and that’s the optimistic way of measuring things, which the Government now favours.
I wonder why?
The traditional way of measuring things still has a $3 billion hole by 2029.
The pay equity money turns out to be about $2.5 billion a year, which shows you how hopelessly loose pay equity became.
Primary teaching is not a pay equity issue, the same way nursing isn't. It’s a union pay grab. The opposition will still try and convince you otherwise, but they're wrong.
What we do know is the Government found $5 billion a year from savings and equity, which is a lot of money, but money that still allegedly needs spending, hence the ongoing deficits.
The dept-to-GDP keeps going up. It's too high. But under my way of doing things, the little there was handed out, or redistributed, yesterday wouldn’t have even been there.
But I suspect the politics of an approach that austere was too much to stomach.
But here is their issue; a conservative Government can only run things in the red for so long before the public quite rightly asks whether they actually know what they're doing.
Getting rid of KiwiSaver freebies for the so-called wealthy is a good move. Getting rid of Best Start freebies for wealthy families is also a good move.
Means testing wealthy families on jobless teenagers is common sense. It's already done on student allowance.
Depreciation for business assets is a good move. It encourages people to spend and take a punt - more of that please.
In the end it was a simple document because the Government has limited room to move and Governments should not be the home of all good ideas, bum wiping and problem solving.
They should set the mood and clear the run way.
It’s a classic centre-right Budget written in tough times.
What they need politically is people to understand just how tough it is and to give them leeway and some patience to ride this out.
As for those who dug us this hole in the first place - the less we hear from them the better.
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Episodi mancanti?
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On the Mike Hosking Breakfast Full Show Podcast for Friday the 23rd of May, it's all things Budget on the show this morning - KiwiSaver changes, how the Government is making the "savings" gas exploration and Nicola Willis to explain it all.
A home playoff game for Auckland FC this weekend as they look to make their way into the final.
Kate Hawkesby and Tim Wilson talk Smith & Caugheys and how much you should pay for a dog!
Get the Mike Hosking Breakfast Full Show Podcast every weekday morning on iHeartRadio, or wherever you get your podcasts.
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At the end of each week, Mike Hosking takes you through the big-ticket items and lets you know what he makes of it all.
The Budget: 7/10
In totality she did quite a lot with next to nothing and the intent and messaging, I hope, gave hope. Because boy do we need hope. Oh, and also a surplus.
The Green's budget: 1/10
They shouldn’t even be allowed near a calculator. When nurses get pay cuts because of tax you know you are dealing with nutters.
The Privileges Committee debate: 6/10
Because at last the committee came to the party on rule breaking and at least attempted to right the egregious mess the place has become.
The Warriors: 8/10
They just keep on winning. And this weekend at home against the Raiders - what a lip-smacker!
The Golden Dome: 6/10
Is it even real? Can you build a dome in three years and, if you can, how come we can't build a road in that time?
Smith & Caugheys: 2/10
That is what arrogance, incompetence, blind ideology and lack of vision does for a city.
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Auckland FC have the second leg of their A-League semi-final clash against Melbourne Victory tomorrow night.
It’s the home leg for AFC – with Go Media Mount Smart Stadium expected to be a sellout with 28-thousand fans.
The club’s CEO Nick Becker told Mike Hosking the team aren’t getting ahead of themselves – and are solely focused on this game.
He says it would be a brilliant achievement to reach the Grand Final in the franchises’ debut season.
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An oil and gas lobby group is celebrating the Government's 200 million dollars for gas fields.
Resource Minister Shane Jones announced the money would be used to co-invest with developers to start new fields.
Energy Resource Aotearoa Chief Executive John Caregie told Mike Hosking it's a positive signal to the sector.
He says it will tilt the economic signals from negative to neutral.
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The Finance Minister is defending her budget and growth agenda, despite a surplus being some years away.
The Government's books aren't set to return to surplus until 2029.
Nicola Willis says that surplus is coming despite disruption on the world stage.
She told Mike Hosking alongside spending cuts they're also investing to encourage businesses to grow.
Willis says the biggest risk to getting back into surplus would be a slow down in the economy.
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Two people are dead and eight injured after a plane crashed in San Diego overnight.
The small business jet crashed into the Murphy Canyon neighbourhood, spilling jet fuel across the road and engulfing multiple homes in flames.
Police evacuated around 100 residents.
US Correspondent Richard Arnold told Mike Hosking authorities are doing more searches, to make sure everyone's out.
He says it's believed those killed were on board, but among those injured were people on the ground.
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A view suggests says yesterday's Budget is highlighting New Zealand's fiscal realities.
It found more than 21-billion dollars in savings - including nearly 13-billion from its pay equity changes.
Despite the many cuts - the Government isn't forecasting New Zealand to return to a surplus until 2029.
Infometrics Principal Economist Brad Olsen told Mike Hosking reaching that will be touch and go.
He says the next few Budgets are likely to be the same, and it will probably get harder to reach that target -- meaning less spending, or something else, may be required.
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What I hope for today is a sign and a sense that what we are facing economically as a country is real, and it's real bad, and the Government see it, accept it, and chart a path forward that gives us some sort of hope.
The damage done by Jacinda Ardern, Grant Robertson, Chris Hipkins, and Adrian Orr is now years long.
You can't invent money in that volume without spending the ensuing years trying to dig yourself out of it.
The start has been made.
The cutbacks have begun and the screaming, wailing, and upset has ensued. But there is a lot more where that came from.
The seeds of recovery are real, manufacturing is expanding, and has been for several months, but services aren't. Sentiment isn't.
The farmers have struck gold, but the weather has been exceptionally kind, as have Americans with their passion for burgers.
Our debt is shocking. We are not running a surplus on an annual basis and still won't be for years.
The Finance Minister today has virtually nothing to play with; no excess, no lolly, and no largesse.
She has, I hope, found a fortune in savings and she will redirect that to better places.
I pray she isn't borrowing on top of what we have already incurred. If she has, she may well be making a generational mistake, given Treasury says 50% debt by way of GDP is it, and we are close enough to that to worry the conservatives.
In a sense today should wrap some numbers and forecasts around the rhetoric, being we are open for businesses, we are pro-growth, we are big on infrastructure and most importantly, fiscally as well as economically, we are not going to die wondering.
Today is not a day for a dollar here and a dollar there. It is not an itch-scratching exercise.
It should be a document that lays an ongoing foundation for the major project that is the economic resuscitation of the New Zealand economy.
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One of New Zealand’s most influential music groups is back after five years out of the game.
Fly My Pretties was first formed in 2004, and brought together musicians from a lot of well-known Kiwi bands to record live albums.
The cast includes musicians from the Black Seeds, Fat Freddy’s Drop, The Phoenix Foundation, and The Phoenix Foundation, among others, and was founded by Barnaby Weir and Mikee Tucker.
Tomorrow marks their first release in five years, with their seventh album ‘Elemental’.
Weir told Mike Hosking the project has turned out different to how he would have imagined it, but the core concept is still there.
“I hope that there’s still a lot of, y’know, more leads in it,” he said.
“This new album is really strong, and y’know, in the future, I might not be on the stage, I might be just more of a mental kind of character involved with it, but the concept can just, y’know, continue.”
And, as a special treat, Weir gave an exclusive, acoustic performance.
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North Auckland oyster farmers have been hit with a wave of uncertainty.
Norovirus has been found in the Mahurangi River where the shellfish are grown, resulting in contaminated product and closures until further notice.
They're blaming Watercare and Auckland Council, claiming they let sewage flows get out of control before infrastructure could catch up.
Watercare says a new pipeline should be completed in 2028.
Matakana Oysters co-owner Tom Walters told Mike Hosking it’s too little too late for many of the businesses, who have been begging for measures to be introduced for years.
He says there’s been no accountability from Watercare or the council, or compensation after the growth and development of the area cost them their farms and livelihoods.
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On the Mike Hosking Breakfast Full Show Podcast for Thursday 22nd of May, we talk to the major sectors to hear their wish lists for today's Budget.
145 years of Smith & Caughey's has officially come to an end, and Mike is ropeable.
Fly My Pretties co-founder Barnaby Weir is on to talk their first album in five years, plus, gives us an exclusive look at a new song.
Get the Mike Hosking Breakfast Full Show Podcast every weekday morning on iHeartRadio, or wherever you get your podcasts.
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KiwiSaver's a hot topic in today's budget announcement.
Low and middle income earners could be getting tax back on their contributions into the fund.
Deloitte Tax Partner Robyn Walker told Mike Hosking it's a recommendation made by the tax working group.
She says that will make a difference to people's savings.
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All quarters of the health service need funding, not just lip service.
That's the message from the Nurses Society ahead of the Government's budget announcement today.
National Director David Wills says our health system's been historically underfunded.
Wills told Mike Hosking services can't be delivered without adequate funding.
He says despite claiming to deliver increases, in real terms there was under funding in the last budget.
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A promise today's budget will deliver real growth for the economy.
Finance Minister Nicola Willis is hours away from unveiling her 'No BS Budget', claiming there'll be no frills or excess.
The Government's been slowly teasing figures, concentrating on balancing the books through cuts and reprioritisation in spending.
Business NZ CEO Katherine Rich told Mike Hosking the government knows its role in business recovery.
She says they're the first government in a long time that's methodically looked through what can be done to make things easier.
It’s also been teasing changes to the KiwiSaver scheme, with more to be revealed.
It's expected to increase KiwiSaver's default contribution rate from the current 3% as well as means-testing its own annual contribution, up to $521 dollars.
Rich told Hosking they'll be keeping a close eye on things.
She says it depends on how it's phased in over time, so businesses can factor it into wage negotiations and salaries.
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There's a belief New Zealand's entering the early stages of an export-led recovery.
Stats NZ data reveals it's at $1.4 billion in April, compared with a $12 million deficit last year.
The dairy sector's been the big winner, up $601 million to $2.2 billion.
Former Finance Minister Steven Joyce told Mike Hosking it's promising on the back of a tough three years in the sector.
He says domestically people aren't spending a lot, so imports aren't coming in, but fortunately the world is buying more from us which is a great point in the cycle.
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Smith and Caughey's closure indicates what needs to change in Auckland's CBD
The city's most iconic department store is closing its doors after 145-years, with the loss of almost 100 jobs.
The closure comes down to increased competition, economic hardship, and the state of the central city.
Heart of the City Chief Executive, Viv Beck told Mike Hosking it's a sign of fundamental flaws in the management of Auckland's CBD, especially in transport.
She says the system needs more functionality and common sense to meet Auckland's realistic transport needs.
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Zespri’s largest-ever crop has topped $5 billion in global sales
After some challenging seasons, the kiwifruit company has exceeded their long-term goals by $500 million.
The record season saw the sale of close to 221 million trays of Kiwifruit, compared to 164 million the previous year.
Zespri CEO Jason Te Brake told Mike Hosking it comes after a decade of investing heavily in the brand.
He says they've been able to give good returns back to growers after some challenging years.
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Billions in spending has already been announced, and more to come for today's budget.
Finance Minister Nicola Willis is hours away from unveiling her second budget, and is promising no frills or excess.
The Government's been slowly teasing figures, including a $600 million infrastructure investment into the country's rail network.
Infrastructure New Zealand Policy Director Michelle McCormick told Mike Hosking they're trying to make some progress.
She says it's good to see they're continuing to build on the fundamentals.
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