The Country 31/03/26: Cameron Bagrie talks to Jamie Mackay

Right, let's kick it off with independent economist chair of transport NZ Cameron Bakery Cameron

How worried should farmers be especially when it comes to transport of livestock?

Tough out there, right if you're a transport operator, you know want to get

IE diesel

There's gone through the air to the roof and you see on it's a country consumes more

Diesel than what we do sort of petriples. I forget about the impact on

We'll remote users

You know the blood around this country is actually diesel

You know I'd encourage you to read me processes these sort of people

Just be a little bit of comedy

It's what the transport sector is going through here

A lot of you know answers about your trying to get some sort of price relief

Pictures and regard to some sort of

Yeah, hey Cameron sorry mate

We're not we've got a great line here can you stand on a chair or

Go to a window because you're cutting in and out a wee bit on me here

I'll just give you a wee minute to do that let me just um

If you're a wee bit of macy grey while you're honest going to buy some time for you to get to a better reception area

I

Okay, take two on Cameron Vagry it is

15 up the 12 here on the country believe it or not

He was in Wellington on a high rise building on the 28th floor

I thought way up there Cameron you'd get good mobile reception

But we've got you down to the ground floor now talk to me about the livestock transport industry please again

Well, the the transport sector at the moment it's going pretty tough right because you've got higher input costs than the

Form of higher diesel prices

And as a country we consume more diesel than what we do petrol and the problem is at the media fixate

Fixate but the impact on motorists

As opposed to the lifeblood around this economy and reggae to get stuff from

A to B. So look, I'd encourage you to read me processes

Yeah, just be a little bit flexible

Accommodating regard to recognize at the input costs

For a lot of these transport livestock operators they're going up

Yeah, to government out there if they're sort of listening to this yet

I know it's going to be tough to get price relief

But what we'd like to see if some sort of productivity relief i.e.

Lava sector another sort of one to two-ton

Attracts. So yeah, you consume roughly the same amount of fuel

But you're getting more productivity by you getting more stuff from A to B

And let's look at productivity relief as a way of city of driving improvements across the sector to relieve

Yeah, what is just pretty stressful times out there

Okay, let's look at some of the numbers exchange rate 57 U.S.

Sense I suppose in some ways that's a positive certainly not a positive for the

pricing fuel but it is for our export income receipts and flation

Maybe getting up to four plus four percent interest rates we know

Going up and a few to use the NZX50 for instance as a barometer down seven percent in March

None of these numbers Cameron Bakery are really working for us

No, they're not and what's going on if you've got the bigger picture

Jamie, it's what's called a negative supply shop when oil prices

But it's the import cost as the input to a cost cost go up

Plus the board that's bad the earnings it's bad for growth and flation goes high

I think treasury came out with an estimate

Think about two weeks ago to see the worst case scenario and flation was going to be 3.7 percent

Let's probably look at the best case scenario at the moment

Yeah, we're going to see something with the 4 percent and from front of it and the scary numbers is

We start to see a little bit of assistance

About the sort of shock. Yeah, the view I guess

Three weeks ago was I hope this is going to be a short lived affair does not look like it is going to be a short lived affair with each sort of passing day

Looks like it's going to be longer of duration longer duration style event more the bigger the economic

Hit just to see on the other side as a general principle

We're seeing growth estimates are revised there's many to and by economists and inflation estimates are revised up

So I know that that's bringing about what's called a circulation

So that's not a word that yeah, we like to sort of throw around but that's going to be the reality up in about three months

Yeah, that's a dirty word to throw out there

Okay, we're in the brilliant line

But I just want you to crystal ball goes from a Cameron Bagree best and worst case scenarios

Even under the best case scenario of this war ending tonight or tomorrow morning

Trump declaring victory and getting out of there

That doesn't appease the iranians and the other thing is the the the supply chain issues won't correct themselves overnight

So what's best case scenario

Well

Case scenario is

Things they do a deal

What that deal looks like we don't know but if we can do a deal

Then you're going to see the

Forward prices by oil prices they're going to come

Ain't back down and what we've seen historically is that all prices go up

Then I don't think I can't see right back down. It's just a question of how long they stay high so it's so we hope

Move that sort of part of the problem is like it even if you start to refire up these oil fields

Gotta get the pressure out up and that's no easier for you

You know the refineries that are starting to shut down

Well, there's a bit chemistry parts

So you can't sort of pluck a switch on and off and suddenly you magically air producing refined fuel

About the other side so that the reality is yeah, that this is going to take a few months. I think

It'll down and it is step back you think about the

Sure

Being over the past sort of four to five years

Yeah, the global environment has just shifted

We're no longer in a low risk low volatility world. It's like

Shocks

But becoming the new normal whether it be oil whether it be shipping whether it be something to do with

You that era called the great moderation which is sort of 1993

The 2000 and 19 yeah

Bro low inflation

Yeah, not much volatility is behind us

Well, we're just in an era that feels a lot more like the 60s and 70s. Was that a bad era?

No, was it a little more volatile area? Yes, then you just need to learn how to deal with that and manage risk

Okay, Cameron

Thanks for your time going from the 28th floor to the ground floor to have a chat to us independent economist and the chair of

Transport New Zealand urging some constraint for the poor old transport companies