July 9, 2025 • 5 mins
The Finance Minister says businesses should be more confident about the economic recovery.
The Reserve Bank's been weighing up lower-than-expected growth and higher inflation in its decision to keep the Official Cash Rate unchanged at 3.25%.
Nicola Willis says businesses have been battening down the hatches.
But she told Heather du Plessis-Allan they’re maybe more wary than they should be.
Willis says all of the fundamentals in the economy are good.
She says the Government is business-friendly and is on the side of those wanting to invest, make money, create jobs, and export overseas.
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Speaker 1 (00:09):
You're listening to a podcast from News Talks be follow
this and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
So, as expected, the Reserve Bank has held the OCR
at three point twenty five percent. They've suggested the next
move is a cut that will happen in about six
weeks time. But it's clear from what they're saying that
the economy is far from roaring at the minute. Nicola
Willis is the Finance Minisum with US Morning. Nikola, Good
morning here. Why isn't the economy doing better?
Speaker 3 (00:35):
Well? We had two quarters of above expected growth, so
that was in the last bit of last year, in
the first three months of this year where the growth
in the economy was faster than all of our forecasts.
But since then, there's been quite a few global developments.
We've had Donald Trump making announcements about tariffs, We've had
global back and forth on trade. We've had global conflict
(00:57):
and that's created uncertainty around the world and it certainly
impacted business confidence and investment intentions here in New Zealand.
Despite that, fundamentals remain good. There's every reason that we
will have kept growing, but maybe not as fast as
we would have liked okay.
Speaker 2 (01:11):
I mean it's fair to say that some of it
has to do with what's going on globally, but a
lot of it is actually just domestic spare capacity in
the domestic economy. Why isn't it firing? I mean, the
reason I'm asking you this question is because you said
in twenty twenty three at the election that you guys
would get the economy back on track. You've had more
than eighteen months and it's far from that.
Speaker 3 (01:29):
Well, there is spare capacity in the economy. And if
you go back to what I was saying earlier, what
we saw at the end of last year, in the
first three months of this year was we were literally
twice as fast in terms of our growth as had
been predicted, four times as fast as Australia was in
the first three months of the year. Then in April,
quite a major thing happened and you saw the same
(01:50):
headlines as every business in New Zealand saw, which said
that this is going to be very challenging to the world,
that global growth is going to reduce, there are going
to be all of these impacts, and like many countries
around the world, the reaction and that in New Zealand
has been well, actually we might have betten down the hatch.
This is a bit now my viewers. Okay, that's the
(02:11):
reaction that businesses have had, but actually all of the
fundamentals for growth remain. We've got a business friendly government
that is on the side of those wanting to invest
and make money and create jobs and export overseas. We
are getting rid of rules and the regulations that have
in the past stood in the way and made things harder.
We've been careful with the way that we are spending
(02:32):
taxpayers money. All of those things are the right things
to be doing and is every reason why New Zealand
should be growing in the future.
Speaker 2 (02:39):
Nichola, can I talk to you about this Fonterra meeting?
What are you hoping to get out of it?
Speaker 3 (02:44):
Well, I have had some interesting numbers put to me Heather,
which is that if you buy some butter at Coal's
and Willworth's right now, if you go online, you can
get that for seven dollars Australia, which is ki we
seven dollars sixty or so. If you buy it at
Walworth's New Zealand right now, it's about eight dollars fifty,
So is that.
Speaker 2 (03:04):
A supermarket problem though, or a Fonterra problem.
Speaker 3 (03:07):
That's my question and I don't have an answer for you,
And I want to ask both the supermarkets and Fonterra
for their perspective on what's building into that cost, what's
in that price? Is there anything the government can be
doing to reduce factors in that price? Because I accept
that the global milk price sets the general price in
fury products. I get that that's economics. But my question
(03:28):
is why is it seemingly a bit cheaper in Australia
than it is in New Zealand to get a block
a better?
Speaker 2 (03:35):
Would it simply not be that Potentially Coals is using
it as a loss leader.
Speaker 3 (03:39):
Well, that seems interesting because of course Coals and will Worths,
you'd think would be facing similar incentives to do that
sort of thing. Why wouldn't that be happening here? And
Coals isn't offering it particularly cheaply in Australia. If you
look at different places in Australia you can get similar
prices to that. So I've just got the question. I've
put that question, of course to supermarkets. Why is it
(04:02):
so much cheaper seemingly at Australia and they've given me
an answer. I'm going to put it to Fontierra and
ask them about it. And I'm genuinely interested in their
answers because I'm on side of every Kiwi shopper who goes, hey,
there are Our price is fair and I think I
have a job to do to explore it.
Speaker 2 (04:18):
Nicholasied families on two hundred and thirty thousand dollars beyond welfare.
Speaker 3 (04:23):
No, they shouldn't be. But I know where you're going
with this.
Speaker 2 (04:25):
Yes, so why are they?
Speaker 3 (04:27):
They are not? Family is earning that kind of income
in New Zealand. So that's across two earners. Mind you,
that's not just one who are paying a lot of
tax then have to if they have young children, pay
a lot for their childcare in order to work. It's
a cost that they have to take on in order
to often have mum and dad both working full time.
(04:50):
And what we've done with the Family Boost policy is
recognized as taxpayers working hard at a difficult time in life.
We want to make sure that you're well supported in
that and we're going to give you some of your
fees back forty percent fees back up to forty percent.
Speaker 2 (05:05):
That's still wealthif one that's still wealthy because you are
giving money to families who are earning two hundred and
thirty thousand dollars a year. I mean, are you sure
that you just spoke about the fact that you're spending
our money wisely? It doesn't look like.
Speaker 3 (05:16):
Well, well, it's a text rebate either. It's not wellfare,
it's not a handout. It's actually something you get only
if you are able to demonstrate that you've got those
receipts for your early childhood education costs, and you will
get less than you would if you were on a
lower income. We have means tested it so once you're
as a household earning more than one hundred and forty
(05:38):
thousand dollars, the amount of rebate you get out of
that scheme starts to reduce. But look, I stand by
that family burst policy. It's all about saying, difficult time
in life, high cost of living, let's make sure families
with young kids are well support.
Speaker 2 (05:52):
All right, Nicola, thank you for your time. Enjoy your
Day's Nichola Willi's Finance Minister.
Speaker 1 (05:57):
For more from news talks, b listen live on air
or online and keep our shows with you wherever you
go with our podcasts on iHeartRadio,
You're listening to a podcast from News Talks be follow
this and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
So, as expected, the Reserve Bank has held the OCR
at three point twenty five percent. They've suggested the next
move is a cut that will happen in about six
weeks time. But it's clear from what they're saying that
the economy is far from roaring at the minute. Nicola
Willis is the Finance Minisum with US Morning. Nikola, Good
morning here. Why isn't the economy doing better?
Speaker 3 (00:35):
Well? We had two quarters of above expected growth, so
that was in the last bit of last year, in
the first three months of this year where the growth
in the economy was faster than all of our forecasts.
But since then, there's been quite a few global developments.
We've had Donald Trump making announcements about tariffs, We've had
global back and forth on trade. We've had global conflict
(00:57):
and that's created uncertainty around the world and it certainly
impacted business confidence and investment intentions here in New Zealand.
Despite that, fundamentals remain good. There's every reason that we
will have kept growing, but maybe not as fast as
we would have liked okay.
Speaker 2 (01:11):
I mean it's fair to say that some of it
has to do with what's going on globally, but a
lot of it is actually just domestic spare capacity in
the domestic economy. Why isn't it firing? I mean, the
reason I'm asking you this question is because you said
in twenty twenty three at the election that you guys
would get the economy back on track. You've had more
than eighteen months and it's far from that.
Speaker 3 (01:29):
Well, there is spare capacity in the economy. And if
you go back to what I was saying earlier, what
we saw at the end of last year, in the
first three months of this year was we were literally
twice as fast in terms of our growth as had
been predicted, four times as fast as Australia was in
the first three months of the year. Then in April,
quite a major thing happened and you saw the same
(01:50):
headlines as every business in New Zealand saw, which said
that this is going to be very challenging to the world,
that global growth is going to reduce, there are going
to be all of these impacts, and like many countries
around the world, the reaction and that in New Zealand
has been well, actually we might have betten down the hatch.
This is a bit now my viewers. Okay, that's the
(02:11):
reaction that businesses have had, but actually all of the
fundamentals for growth remain. We've got a business friendly government
that is on the side of those wanting to invest
and make money and create jobs and export overseas. We
are getting rid of rules and the regulations that have
in the past stood in the way and made things harder.
We've been careful with the way that we are spending
(02:32):
taxpayers money. All of those things are the right things
to be doing and is every reason why New Zealand
should be growing in the future.
Speaker 2 (02:39):
Nichola, can I talk to you about this Fonterra meeting?
What are you hoping to get out of it?
Speaker 3 (02:44):
Well, I have had some interesting numbers put to me Heather,
which is that if you buy some butter at Coal's
and Willworth's right now, if you go online, you can
get that for seven dollars Australia, which is ki we
seven dollars sixty or so. If you buy it at
Walworth's New Zealand right now, it's about eight dollars fifty,
So is that.
Speaker 2 (03:04):
A supermarket problem though, or a Fonterra problem.
Speaker 3 (03:07):
That's my question and I don't have an answer for you,
And I want to ask both the supermarkets and Fonterra
for their perspective on what's building into that cost, what's
in that price? Is there anything the government can be
doing to reduce factors in that price? Because I accept
that the global milk price sets the general price in
fury products. I get that that's economics. But my question
(03:28):
is why is it seemingly a bit cheaper in Australia
than it is in New Zealand to get a block
a better?
Speaker 2 (03:35):
Would it simply not be that Potentially Coals is using
it as a loss leader.
Speaker 3 (03:39):
Well, that seems interesting because of course Coals and will Worths,
you'd think would be facing similar incentives to do that
sort of thing. Why wouldn't that be happening here? And
Coals isn't offering it particularly cheaply in Australia. If you
look at different places in Australia you can get similar
prices to that. So I've just got the question. I've
put that question, of course to supermarkets. Why is it
(04:02):
so much cheaper seemingly at Australia and they've given me
an answer. I'm going to put it to Fontierra and
ask them about it. And I'm genuinely interested in their
answers because I'm on side of every Kiwi shopper who goes, hey,
there are Our price is fair and I think I
have a job to do to explore it.
Speaker 2 (04:18):
Nicholasied families on two hundred and thirty thousand dollars beyond welfare.
Speaker 3 (04:23):
No, they shouldn't be. But I know where you're going
with this.
Speaker 2 (04:25):
Yes, so why are they?
Speaker 3 (04:27):
They are not? Family is earning that kind of income
in New Zealand. So that's across two earners. Mind you,
that's not just one who are paying a lot of
tax then have to if they have young children, pay
a lot for their childcare in order to work. It's
a cost that they have to take on in order
to often have mum and dad both working full time.
(04:50):
And what we've done with the Family Boost policy is
recognized as taxpayers working hard at a difficult time in life.
We want to make sure that you're well supported in
that and we're going to give you some of your
fees back forty percent fees back up to forty percent.
Speaker 2 (05:05):
That's still wealthif one that's still wealthy because you are
giving money to families who are earning two hundred and
thirty thousand dollars a year. I mean, are you sure
that you just spoke about the fact that you're spending
our money wisely? It doesn't look like.
Speaker 3 (05:16):
Well, well, it's a text rebate either. It's not wellfare,
it's not a handout. It's actually something you get only
if you are able to demonstrate that you've got those
receipts for your early childhood education costs, and you will
get less than you would if you were on a
lower income. We have means tested it so once you're
as a household earning more than one hundred and forty
(05:38):
thousand dollars, the amount of rebate you get out of
that scheme starts to reduce. But look, I stand by
that family burst policy. It's all about saying, difficult time
in life, high cost of living, let's make sure families
with young kids are well support.
Speaker 2 (05:52):
All right, Nicola, thank you for your time. Enjoy your
Day's Nichola Willi's Finance Minister.
Speaker 1 (05:57):
For more from news talks, b listen live on air
or online and keep our shows with you wherever you
go with our podcasts on iHeartRadio,
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