Chapter 1: What are the main highlights of Budget 2026?
the newsmakers and the personalities the big names talk to mike the mike hosking breakfast with bailey's real estate 100 kiwi owned and operated news talk zb morning and welcome today nicola willis winston peters on you know what the new season for dairy the forecast already a golden richie barnett ahead of the warriors of course katie and tim uh richard arnold murray olds they round out the a-list for us this friday as well
Welcome to the day. Seven past six. So I asked for the surplus to arrive sooner than previously forecast. And as though she was listening this time yesterday, the first words out of Nicola Willis's mouth was it will be a year ahead of schedule. You can't ask for more than that.
That's not an election year lolly, but I'm increasingly of the belief that a growing number of New Zealanders have got the message at last. A growing number of us have been shaken by the
into the cold hard reality that nine billion dollars a year in debt servicing is absurd and it can't continue we need to cut our cloth and that in many respects was what yesterday was about it's probably brave in election year to run things this type but it's also the adult thing to do so the message politically is stark you want free stuff the current government aren't really for you you want grown-ups paying for life as we earn it this may be the lot that gets your vote i do worry about health i mean yes health was a big multi-billion dollar winner
And the hardware, the facilities, you know, the equipment needs to spruce up. And yes, bits and parts are squeezed. But the health bill for 5 million people seems amazing to me and not in a good way. There's got to be savings in there somewhere. I didn't use my $17,000 last year. So somebody did $17,000 for every single house in this country.
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Chapter 2: How does the Finance Minister respond to the budget's reception?
It's not right. The road improvements and the tricky bits of the country are like that. Build them properly. Deal to the future. Don't patch it up. We already know about education. A revolution is on, and we'll be all better off for it. You know I'm a trades fan. Big wins for good old-fashioned but increasingly important jobs. Not every kid wants a BA.
And even if they did get one, doesn't mean there's a job waiting. The world will always want a sparky or a mechanic. There were the basics, the rationale, the logic. There was a good message about three parties doing collegial work. There were wins for each of them, all mixed up with the overarching message that the madness fiscally has stopped.
Chapter 3: What are the implications of the surplus arriving earlier than expected?
The reality has arrived. But, but also there, big picture, get this right. This is a place that has its best days ahead of it. I liked it. An easy 7 out of 10.
News of the world in 90 seconds.
Good news, bad news, story on the Iran business. Bad news, bit of back and forth overnight militarily. The U.S. took out what they said were five one-way attack drones that they said were going to pose a threat in and around the Strait of Hormuz hours after we saw the Iranians launched a ballistic missile, according to CETCOM, towards Kuwait. Good news, Axios says they've got a deal of sorts.
I'll come to that in a moment. On the ground in Lebanon, meantime, they're a little bit over the old Israeli approach to the ceasefire.
Lebanon is being subject to fierce aggression by the Israeli military, on the other hand, by Iran through its control of Hezbollah. So Lebanon is tough between both of them.
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Chapter 4: How does Winston Peters view the budget's impact on the trades sector?
Meat in the sandwich. The other thing the American administration is dealing with this morning is this ongoing ice mess. This time we're in Newark. Mark Wayne, the DHS bloke, has got a plan. We're not going to halt the flights. What we're saying is we just won't be able to process them because we don't have officers there.
We're going to have to pull out our Customs and Border Patrol officers that process these flights and put them in these facilities to help protect our employees coming out of work. So as far as Ebola goes, by the way, it's not going very well.
We have multiple unknown chains of the virus and contact tracing remains at 35% and case identification is challenging because of the complex environment that we're operating in. Then in Britain, where we have a fairly landmark report this morning into young people and their job prospects, that's not good either.
The choice for this generation of politicians has got to be, we've got this endemic chronic problem that is getting worse, not better. We don't have a system. We don't have a plan to deal with it. We have got to make this a priority for action. And that is what I'm urging of employers as much as I'm urging of government ministers.
Chapter 5: What are the economic forecasts discussed by the economist guest?
Yes, when faced with a bleeding obvious, what else can Starmer say? This is a long-standing, long-term problem. It's been going on for many years. We will not allow a lost generation, and so we'll work with Alan now on what more needs to be done. Finally, a new study from a French university. It's found that mosquitoes might like the smell of repellent.
60% in the tests were actually attracted, not repelled. Same way that Pavlov's dog learned to associate the ringing of the bell with the food, mosquitoes can learn that the smell of the deet means there's blood to be had. News of the world in 90. Right, this deal looks real, actually. Abesant's speaking currently, but it won't be about this. It might be about this.
He's just running the standard press thing this morning. We're standing by for Trump. So Axios is reporting a 60-day memorandum.
Chapter 6: How does the budget address health spending and its effectiveness?
Extend the ceasefire. Start negotiations on the nuclear program. Meantime, it looks like the Strait will be open. Oil's down. WTI at 88. Brent at 93. So all we're standing by for is, apparently, Trump to sign it. 12 past 6.
The Mike Hosking Breakfast full show podcast on iHeartRadio. Powered by Newstalk ZB.
EU overnight slapped Timu with a couple of hundred million euros. This is for illegal products, dangerous baby toys, faulty charges for sale, failed to diligently identify and analyse and assess systemic risk. They've been under investigation since October of 24 whether it's been meeting its obligations as a designated very large online platform under EU law. They've decided they haven't.
So that's a couple of hundred million euros.
Chapter 7: What are the reactions to the proposed bank levy?
15 past six. Now, from Shore and Partners, Friday morning, Andrew Callaghan, how are you? Very good, Mike, very good. What did you make of it? Hey, well, look, it's been a busy week, hasn't it? You had the OCR, now you've got the budget's been delivered. So, look, a quick, I guess, an overreaching comment. The budget is what we expected. It is fiscally responsible.
I sort of do feel the hand or feel the awareness there. of the rating agencies in the background. They had to demonstrate a meaningful and committed track to fiscal stability and fiscal restraint. And I think you have to acknowledge here, Mike, we are a small trading country.
We're heavily dependent on offshore capital, which means we have to run a tighter fiscal policy than sort of global economic heavyweights. It is spurious
Chapter 8: What insights are shared about the upcoming Music Awards?
to compare us to larger economies and say, well, they can have debts, GDP of 80% or 100%. We can't do that. Now, at a high level, forecast state of the books, surplus as measured by OBGAL X achieved a year earlier than expected, which is a positive. Underlying fiscal surplus there in that 28, 29 year. It then accelerates away after that, actually, and the surpluses look really good.
But I think you have to be a little bit circumspect about those longer-term projections. There are massive levels of uncertainty out there. So just a quick reality check here. The fiscal deficit in the June 2027 year is still over $11 billion. It's $11.4 billion. It improves after that. So the improvement has sort of back-ended. I think you have to be aware of that.
Most importantly, what are the economic assumptions underlying the forecast? This bears inspection. I'm not sure whether we've been so beaten down now that we say these forecasts look optimistic, but I kind of think that's where we've ended up. So the June 20th to 27th year, growth 2.3%. I think we'd all be very happy to see that, wouldn't we? And subsequent years, 3.2%, 2.7%, 2.5%.
I think we've been so used to growth being all over the show that we look at that and we go, oh, that feels robust, when actually it's probably what we should expect, isn't it? CPI inflation, peaking, as we're told by the RBNZ, at over 4%. Treasury forecast, 4% annual inflation in the June 2026 year, but it snaps back to 1.6% in the 2027 year, and then pretty much 2% for subsequent years.
We can only hope that it is that stable. I look at the 90-day bank bill forecast, so where the level of interest rates The Treasury is suggesting that we sort of see the OCR, the OCR 90 day pretty much closely linked, gets to 3.3% by 2030. So 3.25% OCR looks like that sort of peak in there. That will remain to be seen. What are all these machinations mean for government borrowing? Good news here.
The forecast borrowing program is slightly lower than had been forecast. It's less than the market had been expecting. The market had been expecting a small increase in borrowing. There's actually a small decrease, I think around $6 billion lower than expected. Well, why? Well, tax revenues are increasing and expenses are increasing less than expected.
Now, I always like to reflect very quickly on some actual nominal numbers here, because percentage of GDP sometimes kind of, you know, it sort of throws a little bit of shade on what they actually are. Net core crown debt, this is just a wee reminder, in the 2027 year, $191.8 billion, so the net debt. By 2030, it's $246 billion. There is over $50 billion more borrowing.
But as a percentage of GDP, it falls because we're expecting GDP to increase. So nominal GDP, when people say, what's the GDP of New Zealand? Well, it's 452 million at the moment. By 2030, we expect it to be 554 billion. So we do have a significantly larger GDP over the time. So at 554 billion by 2030, we'd be half the value of Micron. There you go. There you go.
And we wouldn't even be as much as the big Mag7 is spending on AI next year. Unreal, eh? Hey, give me a quick word, seeing it's Friday, about Kumi River, because I didn't know about Coddington. I thought it was all Matty's Vineyard, but Coddington's the go. We have to end on a positive here. Big gong for Kumea River. I love this. Kumea River, outstanding range of Chardonnays.
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