Oil prices surged, inflation risks are rising again, and all eyes are now on the Reserve Bank’s next OCR decision. Liam Dann and Tamsyn Parker break down why petrol prices haven’t hit worst-case forecasts, what it means for the wider economy, and whether interest rate hikes are coming sooner than expected.

The Economy of Everything is brought to you by NZ Herald in partnership with CMC Markets.

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Fear of failure is not protecting you. It is paralyzing you. In this episode I share my fail forward framework and the four mindset shifts that completely changed how I think about failure, including how a gift box business that nearly destroyed me now does a million dollars in a single month.

Ready to start building? Join my Business Masterclass today ⬇️

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Independent economist comments on a 4.1% rise in global food prices over the past two months, what it means for NZ farmers, and why rising global bond yields are keeping the NZ dollar in the US 58–59c range. Plus, the May 27 OCR decision, fuel and fertiliser pressures, the BNZ buy-up, what’s in the Budget for farmers — and why, in the end, it could be worse: we could be in Australia.

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Following the release of last week's Budget, there's growing claims that Australians are looking across the Tasman with 'genuine envy'.

A recent article in The Australian claimed that with no capital gains tax, no stamp duty or land tax, and the opportunity to negatively gear, business owners and property investors have taken more interest in New Zealand as a result.

Australian independent economist Saul Eslake says this is likely just wishful thinking as a response to the recent Budget.

"People look over the ditch and see that New Zealand's top rate of 39 is lower than our top rate of 46...and that you don't really have a capital gains tax, other than on assets that are held for less than two years, so they might think that looks more attractive than Australia."

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Kiwis appear to be cutting back on discretionary spending as fuel prices bite.

Data from Stats NZ shows retail electronic card purchases fell 1.3% last month, with Kiwis buying less or cheaper food and cutting back on their clothing budget.

Non-retail spending on the likes of travel and health is down 4%.

Infometrics Principal Economist Nick Brunsdon told Mike Hosking it makes sense, as these are more discretionary purchases.

He says people are bound to spend less on holidays, or even at the dentist, if they're trying to make up the dollars to fill the tank.

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Another swathe of Government agency job cuts and public sector reform.

Finance Minister Nicola Willis says they want to return the public servant headcount to 1% of the population by mid-2029, culling about 8,700 jobs.

Government agency operating budgets will again be reduced – 2% now, increasing over following years.

Willis says they will also thin out the ministries, pointing to savings it'll bring.

She says they expect to hire more nurses, Police officers, and others in critical frontline roles.

Willis says AI is “incredible” at slashing the amount of time needed for mundane tasks, revealing her staff used it to write a report on public service reform.

She told Mike Hosking the Government was streamlining agencies and embedding AI and digitisation, and asking the public service to "get out of the 80s".

She was experimenting with AI in her own office.

“Instead of one of my analysts spending half a day coming up with a document, they said to AI, ‘Have a look at public service reform around the world, tell us who's done what, what seems to have worked well, what hasn't’.

“And 10 minutes later, you've got a beautiful document with some guidance and some advice.”

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The services sector continues to contract.

The latest Services Index rose 2.7 points to 48.9 – with anything below 50 signalling contraction.

New orders was the only category in expansion, sitting at 51.2, while employment remained negative for the 29th consecutive month.

BusinessNZ Advocacy Director Catherine Beard told Mike Hosking the figures are the result of the fuel situation due to the conflict in the Middle East.

It’s a shame, she says, as we started the year in quite positive territory.

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New Zealanders owe 9.5billion dollars in overdue tax, with small business owners and the self-employed most likely to get behind.

Director of Future Focused Accountants, Catriona Knapp, joins Nadine to explain what can go wrong if you don't get on top of your tax obligations and why it's better to face the debt head-on than bury your head in the sand.

With the IRD cracking down on collecting overdue tax, now is the time to school up on what you need to know to avoid a knock on your door from the taxman.

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