00:01I mean they're affecting the entire globe and they're affecting us because we've seen
00:05our inflation level at you know quite elevated levels at what above 4% about 4.3% on the
00:12headline rate but inflation is really rampant across the globe and it's it's it's having
00:18a major impact on on the political environment and we've seen just on the weekend and last
00:23week we saw the US elections and the New Zealand elections and in both cases it was cost of
00:28living that that really drove those the election outcomes there I mean in the US we've seen a you
00:36know an embarrassing and it would call a humiliation of the Trump administration's policies and in New
00:42Zealand pretty much a tide situation you've had a one-term government there that promised to fix the
00:48inflation situation and to get the economy back on a growth path and it really hasn't managed to do
00:54that so let's get down to specifics looking at America first what do the midterms mean to us
01:03here which areas do you see as being most affected well I mean firstly we're a defence partner to
01:08America and secondly we most of our investment funds offshore investment funds at least are directed
01:14towards America particularly towards Wall Street and in particular on Wall Street at artificial
01:20intelligence stocks so any shakeout that we see on the US market is going to affect Australians because
01:27we're all invested in superannuation and pretty much every superannuation manager whether it's through
01:33industry funds or privately run funds all direct their money there because that has been the market
01:39that has driven returns globally you know all the money that we've seen flowing into you know technology
01:46stocks really since about 2018 2019 and it's now morphed into artificial intelligence stocks so
01:53there's a lot of concern that they those stocks are overvalued and I guess one of the potential problems
02:00that we're seeing is if there is a slowdown in the build out particularly of data centers that could
02:07affect the incomes for the companies that are building the artificial intelligence that means their revenue
02:13intake will be lower and later than originally forecast and that will affect their profitability
02:19and hence the share price okay what about New Zealand then what what might the election result there mean
02:26for Australia well New Zealand they've got a central bank that has really been a pioneer of monetary
02:33policy in many ways it was the first central bank to target inflation that was back in the 90s and
02:39this time
02:40around it was the first central bank to recognize that there was an inflation problem and they went
02:45really hard at it this was after Russia invaded Ukraine they pushed interest rates to 5.5% and
02:52really killed the economy so New Zealand has been in and out of recession now for the past four years
02:58or so
02:59and the problem the advantage New Zealand has is when the economy turns down New Zealanders have an out and
03:06that is to basically get on a plane and come to Australia where the wages are higher and there's
03:11generally what's happened in the last few years is we've had a quite a strong you know employment market
03:16and so a lot of Kiwis have left home and come here to to work and that is generally what
03:21happens when the
03:22New Zealand economy turns down it's happened this time around as well so it's actually been in some
03:27ways a boon to Australia because we've needed skilled workers and those workers have come in from New Zealand
03:33but our unemployment rate is also rising now okay as you mentioned we're not alone in feeling these
03:41cost of living pressures what are the implications in other countries well just look at Europe there are
03:46riots going on across Europe France Spain Italy right across Europe and it's all really to do with cost
03:53of living concerns and particularly housing so I guess what we've seen over the past 30 years is interest
03:59rates dropped to record low levels and governments took on more and more debt to basically fund services
04:07and without running proper surpluses and so now we're in a situation where government debt is really
04:13at extreme levels and interest rates are starting to rise and during that period we had inflation almost
04:20non-existent now inflation is back and people are finding it very difficult to live and also during
04:27that period we saw because interest rates were so low asset prices soared particularly housing so you
04:35know right across Europe you've got people who can't afford to buy a house and don't earn enough to
04:40basically be able to live from a day-to-day basis and so that is what's causing the the riots
04:47across
04:47Europe so you can see these cost of living pressures I'm pretty much universal
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