Rangatira Annual Report 2025 - Flipbook - Page 6
Rangatira Investments
Chair and Chief
Executive report
Recent times have again reinforced that we are never in
equilibrium but one of constant motion. Most uncertainty
in the world is delivered by things outside our control,
like pandemics, wars, weather, geopolitical battles or
technological change.
David Pilkington
Chair
Mark Dossor
Chief Executive Officer
I reflected on the summary we wrote in the Annual
Report in FY22 where we stated “we are seeing a world
economy that no longer benefits from low inflation
delivered by decades of low-priced manufacturing
from China. This has led to the reduction of the
manufacturing capacity in Western countries, who
now have little response to increasing freight costs of
imports”.
Further, we mentioned that we were missing aligned
and capable leaders that have provided peace and
stability in the past. Unfortunately, the void of good
leaders has been filled with less aligned and inward
thinking leaders.
Current events are a consequence and a reaction
to this situation.
What we didn’t add then and perhaps a more acute
driver of some recent actions is the fiscal position
that many find themselves in. The US total income
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is $2.3 trillion pa, while total expenditure is $3.6 trillion
pa resulting in a deficit of $1.3 trillion pa, and a national
debt of $36.2 trillion.
To provide some context, this is akin to a household
with an income of $100k pa spending $156k pa, with
debts of $1.5m. You can survive there for a while with
the support of your lenders, but not forever. You know
that if or when interest rates rise, your core expenditure
will have to drop or your income increase.
The US approach has been to increase revenue
through tariffs, put pressure on interest rates and cut
costs domestically and internationally. This, however,
is not an issue that can be resolved in 100 days or
even 100 months.
What is more interesting is, with the notable exceptions
of Switzerland, Norway, Denmark, Singapore and
Taiwan, all other OECD countries are in similar
positions. As the US transfer costs, like aid and defense
spending to other countries, their position will only
worsen.
The position global economies find themselves in
is unique, at a time when AI is conceivably going to
reduce employment, the geopolitical environment
is leading to protectionism and increased defense
spending while superannuation, health and
infrastructure costs continue to increase.
It is hard to see where this will end. Continuing to
adopt an optimistic, “she will be right” attitude may be
a short-term antidote, but it is not a long-term solution.
Much like the impact of climate change on our weather
patterns, this will lead to increased uncertainty and
volatility that we will have to navigate through.
