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Hot Topic NBR Focus: GMO
2 mins to read

Political & Economic week that was: Judith is back

Rob Hosking breaks down the political and economic week that was on NBR Radio and on demand on MyNBR Radio.

NBR Radio
Fri, 11 Dec 2015

Click the NBR Radio box for on-demand special feature audio: Rob Hosking breaks down the political and economic week that was

Parliament rose for the year. It will reopen on February 9.

The final week kicked off with the return to cabinet of National's most controversial senior politician, Papakura MP Judith Collins, who takes over her old portfolios of Police and Corrections. 

Her return is not without controversy, not only outside but also within the government, and Prime Minister John Key has taken some risks with bringing her back. 

Mrs Collins is, as he says, a competent minister. She also, instinctively, attracts trouble like a magnet and it will be an intriguing 2016 as she will be watched closely over the course of the year. 

This was probably the smallest cabinet reshuffle Mr Key could manage, given the departure of Trade Minister Tim Groser. A more substantive reshuffle is likely in early 2017, when some ministers – and some backbench MPs – will be heading for the exits, willingly or otherwise, at the 2017 election. 

Economically, the most important event of the week was Reserve Bank governor Graeme Wheeler's cut to the official cash rate and the signal he does not really want to cut the OCR any further. 

At 2.5% it is back to the low point it sat at for several years following the Canterbury earthquakes and economists are divided over whether further cuts will be needed. 

Mr Wheeler says he will cut if circumstances warrant but for now his outlook implies that he doubts this will be necessary. 

The main reason is the Reserve Bank now expects stronger growth over the next couple of years than it did a few moths ago: the dairy downturn does not look as bad as first thought and other areas of the economy are running more strongly. 

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NBR Radio
Fri, 11 Dec 2015
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Political & Economic week that was: Judith is back
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