October 1, 2024 • 10 mins
The PM kicks off The Country and we kick off about the Dunedin Hospital. Plus we also talk about the Q4 Action Plan, the UAE trade deal and next week's OCR announcement. And with Jimmy Carter turning 100, we ask our PM who was the best US President of his lifetime?
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Christopher Luxon kicks off the country on a Wednesday. He's
a very busy man. He won't have time. I would
imagine this afternoon to watch the vice presidential debate, because Christopher,
that's because you're too busy not building hospitals.
Speaker 2 (00:14):
Well, obviously, Hi, Jamie, how are good to be with you? Hey?
Speaker 1 (00:17):
Listen?
Speaker 2 (00:17):
Look on? Did he not I get the frustration. I
saw the protests. I've had lots of people talk to
me about it over the last a few months. Actually,
the bottom line is we are committed to building a
new hospital, but we've got to do that within one
point nine billion dollars, and even then it will be
one of the most expensive hospitals ever built in the
Southern Hemisphere. Just from them. This is a project that
(00:37):
started at one point two and then got increased to
one point six. Our government put in another three hundred
up to one point nine, and then on the latest review,
what we're seeing as a budget that's approached close to
three billion dollars and that just cost blowout. He means
that I've got them with the tough choices and make
sure that we're spending within the envelopes that we've got
otherwise the reality is that means we can't build regional
(00:58):
hospital and places like New and Fay and Palmerston North
and Toro on. So I get the frustration. We've got
urgent advice going on around two options. You know, the
old site staged on, a new site, scale back. We
will build the new hospital in Dunedin. The last lot
took six years and did nothing and as a result,
the costs got away. We've got an increased budget, no
worries even then expensive, but we're not going to go
(01:20):
spend three billion dollars and can't justify that and to
need in thelone.
Speaker 1 (01:23):
Well, why aren't you asking the questions? And I'm sure
you have. How the hell did we get from one
point one point nine to supposedly three billion? Or are
you jerking those numbers round awe? But to make yourselves
look better.
Speaker 2 (01:37):
No, not at all. I mean this is a project
that remembers started at one point two, then it got
increased to one point six. Under the previous administration, we
didn't build a thing in six years. It would have
been good if they'd started things earlier, because then you
wouldn't have had the cost inflation that we've seen and
then we put another I think three hundred and something
million in make up to one point nine as we
came to government, and now it looks like it's approaching
(01:58):
three billion. This is no disrespect. This is a labor
special of cost escalation and scope creep. And we have
seen this on fairies. We've seen it on school buildings,
we saw it on farm we've seen it now in
Dnedan Hospital. We've got to clean it up. But you know, honestly,
you know, I have to manage tough times in New
Zell and I have to manage it in the budget
and one point nine billion even then, it's going to
be one of the most expensive hospitals. As I said,
we've built in the Southern Hemisphere. So yeah, we've got
(02:21):
to go back through it very quickly, make sure we
get advice, and then importantly we've got to get on
and get this thing built in the ground talking about
it because you've been talking about it forever and nothing's
actually been happening for the last six years. So yep,
we'll fix it up, we'll clean it up, we'll get
it scoped up in the right way and then we'll
get on and get it built.
Speaker 1 (02:39):
Are you're building it in the wrong place. Should you
have built it up on the hill?
Speaker 2 (02:43):
Well, I think that's a legitimately good question. You know,
you've got challenges on that ground from as I understand it, And.
Speaker 1 (02:50):
Well, you're building in the swamp. Basically you've got to
build piles way down under the ground. Very expensive to
build there. But the reason they're building it in the
middle of the town is for the medical students. And
I'm thinking the amount of money you could have saved
by building it up the hill. You could helicopter the
medical students up there.
Speaker 2 (03:05):
Well, I think that's why. You know, that's why we've
got two options, because I mean, you know, that central
site's got roads on all sides of it's a hell
of a busy sort of part of town and obviously
a lot of traffic coming and going. So that's why
the team is going to take urgent advice go back
to the old site and look at whether we can
stage it better by doing it beer, or alternatively, look
at the site that's being committed to already and see
(03:25):
that we can scale it back and right size it
within the budget that we've got. So those are the
options the guys the team Shane Ready, Chris Bishop are
taking urgent advice on that. But you know it's incredibly frustrating.
It's frustrating for the people of Dedneeded in Southland. I
hear that loud and clear. It's equally frustrating if you're
sitting in my place. You know, sort the country out
(03:46):
and we find out we've got another project that's over
Blarn and we've got to go back and do what
we call good management and get it sorted for people.
So we will do that and we'll get people a
great hospital in Southland, but we need to we need
to give moving because yep, I think there's genuine good
questions about old Site Newsite.
Speaker 1 (04:05):
You've just announced your fourth quarterly action plan. The main
focus is on infrastructure, maybe not hospitals, but a lot
on roads. And I see you're going to like move
the speed limit up or looking at moving the speed
limit up to one hundred and twenty k's in some regions,
but that necessitates rebuilding the roads. Have we got our
priorities wrong? Is it roads over hospitals?
Speaker 2 (04:24):
No, not at all. We're doing everything that we can
around sort of making sure we've got reliable infrastructure because
we've got major challenges and infrastructure across the country. Just
so you know, I use it as quarterly action plans.
You know, we have forty actions in the last quarter.
We've got forty three to get them before the end
of this year and the quarter four plan, so that
I focus the public service and I focus the government
on the must do stuff. We've got the car and
(04:46):
the ditch. They haul it out of the ditch, getting
into first and second gear, which is what we're doing,
and then get into third, fourth and fifth as we
head down the freeway. We are not giving it back
to labor to put it back in the ditch again.
So the bottom line is very clearly the focus of
last line. They're sort of on balance. There's probably a
lot more law and order stuff, or our ginulaw legislation
came into being a serious Offenders and military academies kicked off.
(05:07):
This one's about infrastructure, and it's really about making progress
on our fast track, consenting that we can get projects
of national and regional significance done. We'll have that as
law by the end of the year. Likewise, we're going
to repel the oil and Gas dan which will be
law by the end of the year, and we'll also
be up and running on things like offshore wind and
other things that will enable that infrastructure to get built.
We've got to get the operating system around infrastructure right
(05:30):
so that we can actually get investors to actually want
to build it with us to get the things that
we need.
Speaker 1 (05:35):
Are you bored with what's happening in the primary sector?
Another good global dairy trade event overnight. That's our way
out of us, isn't it?
Speaker 2 (05:42):
Yeah? Exactly. I mean it's interesting, Jamie. Last week I
was in Thomerson North, I think on Friday, and I
went to the Fonterra dairy R and D facility and
that is excellent. And I've followed Fonterra very closely Miles
as obviously a good friend, and I've been really impressed
by what they're doing offshore, but also with the way
that they're changing their business models so that they move
(06:03):
to higher margin products, so moving into food service, for example,
added value products ambient whipping cream for pastry and bakeries
across China, Korea and tailored to those local markets, high margin,
and you've seen improvement and results as we talked about
last week. So that's exactly what we need to see
across the whole of the primary sector because we've been
(06:24):
playing sometimes too much in the commodity end of it.
We know we can do it if we actually invest
the science, technology innovation, and we can do that if
we actually educate our kids right around how to read
and do mass. But that's exactly what we want to see.
I think the other thing that was really exciting to
see for the sector is yet there's some positive momentum,
certainly in dairy, which is good, and the outlook at
(06:45):
mind Balls looks good for next year based off that
current forecast starting to get to where it needs to
get to. We've obviously got inflation coming down, We've got
interest rates the first cut happening. We've got potentially three
more opportunities for the Reserve to think about further between
now and the February. And if we can get the
costs down and patient and interest rates down for our
(07:06):
father so they've got more of their own money in
their pocket, that's going to be very very helpful for
the sector. Two. So they can then invest in their farms,
in their facilities and their product, so that's all good.
The other thing I think that was pretty exciting, frankly
was the UAE deal, which we did, and Todd McLay
deserves tremendous credit for that. He's on an exceptionally good job.
Speaker 1 (07:25):
I put it to you that the best thing that
could happen to the economy in the next week or
two is next Wednesday when Adrian All looks at that
official cash right and he goes fifty rather than twenty five.
Speaker 2 (07:36):
Yeah, well, there will be a decision for him. I mean,
all I can do is be a good partner in
the sense of manage the fiscal financial position well, which
is what we've been doing. He has to be responsible
for monetary policy under our system, with the independence of
the Reserve Bank. But I think it's pretty clear that
we're on a downward trajectory on interest rates, no doubt
about it, because you it wouldn't have moved last time
(07:57):
if you didn't have confidence that you had the right
fiscal settings support the monetary settings. So yep. I mean
the good users as to rate and pace and speed,
that'll be up to them. But you know, the bottom
line is we are seeing, you know, quite a lot
of pain and suffering across the country, particularly with respect
to our unemployment. Essentially, businesses that have hung through high inflation,
hung and through high interest rates, hung in through a
(08:19):
recession for the last couple of years, three years, and
you know, now basically I've had to add no choice
left for them but to lay off workers. That is
the lag effect of that bad economic management of that
six year aread coming home to roost. And so that's
why you never forget the economic fundamentals and you make
sure you manage them well and you never take management
of them for granted. But if we can get those
interest rates down and how we get to go into
(08:41):
next year, I think we've you know, we've we've got
come through the bottom. We've just got to we've got
some green shoots and we've got some encouraging signs. We've
got to keep moving forward now to get growth back
into the economy. And that's the exciting part because that's
how we've got a great potential. We've got awesome potentially
ahead of us, but we've got growth back in this space.
Speaker 1 (08:59):
Final question for you, and I know you can't tell
me who you want to win the vice presidential debate
this afternoon because you don't know who you're going to
have to work with. But I'm going to ask you this.
Jimmy Carter has turned one hundred years of age, the
first US president to do so. I know you've studied
them at length. You were born in nineteen seventies, so
it's from Richard Nixon onwards, who was the incumbent president
(09:20):
when you were born. Who's the best American president of
your lifetime.
Speaker 2 (09:26):
There's a few, but I actually think the most consequential
would be Reagan. And the reason I say that is
if you think about the seventies, the US went through Vietnam,
they came through Nixon and Watergate. They had Jimmy Carter,
who actually was a pretty good governor, probably not as
great a presidential record, had a fantastic post presidential legacy
(09:48):
around habitat for humanity and all that good stuff. But yeh,
Ben Reagan came in. It was a pretty poor time
for America. Actually, not just similar to how we've been
in New Zealand in terms of economic malaise. It was down.
It was a pretty tough time for America, and he
actually gave them hope and he got the economy sorted
and then got the country moving in right direction. So
I think He was probably the one in that period
(10:09):
of time for.
Speaker 1 (10:09):
Me, a great communicator. Yeah, Bill Clinton and Obama I
thought were quite good as well.
Speaker 2 (10:14):
There you go ninety yep, okay, Christopher Luxon, thank you
for your time, and build the bloody hospital. We well,
we'll get your hospital, don't you worry. It's just got
to be within the budget.
Christopher Luxon kicks off the country on a Wednesday. He's
a very busy man. He won't have time. I would
imagine this afternoon to watch the vice presidential debate, because Christopher,
that's because you're too busy not building hospitals.
Speaker 2 (00:14):
Well, obviously, Hi, Jamie, how are good to be with you? Hey?
Speaker 1 (00:17):
Listen?
Speaker 2 (00:17):
Look on? Did he not I get the frustration. I
saw the protests. I've had lots of people talk to
me about it over the last a few months. Actually,
the bottom line is we are committed to building a
new hospital, but we've got to do that within one
point nine billion dollars, and even then it will be
one of the most expensive hospitals ever built in the
Southern Hemisphere. Just from them. This is a project that
(00:37):
started at one point two and then got increased to
one point six. Our government put in another three hundred
up to one point nine, and then on the latest review,
what we're seeing as a budget that's approached close to
three billion dollars and that just cost blowout. He means
that I've got them with the tough choices and make
sure that we're spending within the envelopes that we've got
otherwise the reality is that means we can't build regional
(00:58):
hospital and places like New and Fay and Palmerston North
and Toro on. So I get the frustration. We've got
urgent advice going on around two options. You know, the
old site staged on, a new site, scale back. We
will build the new hospital in Dunedin. The last lot
took six years and did nothing and as a result,
the costs got away. We've got an increased budget, no
worries even then expensive, but we're not going to go
(01:20):
spend three billion dollars and can't justify that and to
need in thelone.
Speaker 1 (01:23):
Well, why aren't you asking the questions? And I'm sure
you have. How the hell did we get from one
point one point nine to supposedly three billion? Or are
you jerking those numbers round awe? But to make yourselves
look better.
Speaker 2 (01:37):
No, not at all. I mean this is a project
that remembers started at one point two, then it got
increased to one point six. Under the previous administration, we
didn't build a thing in six years. It would have
been good if they'd started things earlier, because then you
wouldn't have had the cost inflation that we've seen and
then we put another I think three hundred and something
million in make up to one point nine as we
came to government, and now it looks like it's approaching
(01:58):
three billion. This is no disrespect. This is a labor
special of cost escalation and scope creep. And we have
seen this on fairies. We've seen it on school buildings,
we saw it on farm we've seen it now in
Dnedan Hospital. We've got to clean it up. But you know, honestly,
you know, I have to manage tough times in New
Zell and I have to manage it in the budget
and one point nine billion even then, it's going to
be one of the most expensive hospitals. As I said,
we've built in the Southern Hemisphere. So yeah, we've got
(02:21):
to go back through it very quickly, make sure we
get advice, and then importantly we've got to get on
and get this thing built in the ground talking about
it because you've been talking about it forever and nothing's
actually been happening for the last six years. So yep,
we'll fix it up, we'll clean it up, we'll get
it scoped up in the right way and then we'll
get on and get it built.
Speaker 1 (02:39):
Are you're building it in the wrong place. Should you
have built it up on the hill?
Speaker 2 (02:43):
Well, I think that's a legitimately good question. You know,
you've got challenges on that ground from as I understand it, And.
Speaker 1 (02:50):
Well, you're building in the swamp. Basically you've got to
build piles way down under the ground. Very expensive to
build there. But the reason they're building it in the
middle of the town is for the medical students. And
I'm thinking the amount of money you could have saved
by building it up the hill. You could helicopter the
medical students up there.
Speaker 2 (03:05):
Well, I think that's why. You know, that's why we've
got two options, because I mean, you know, that central
site's got roads on all sides of it's a hell
of a busy sort of part of town and obviously
a lot of traffic coming and going. So that's why
the team is going to take urgent advice go back
to the old site and look at whether we can
stage it better by doing it beer, or alternatively, look
at the site that's being committed to already and see
(03:25):
that we can scale it back and right size it
within the budget that we've got. So those are the
options the guys the team Shane Ready, Chris Bishop are
taking urgent advice on that. But you know it's incredibly frustrating.
It's frustrating for the people of Dedneeded in Southland. I
hear that loud and clear. It's equally frustrating if you're
sitting in my place. You know, sort the country out
(03:46):
and we find out we've got another project that's over
Blarn and we've got to go back and do what
we call good management and get it sorted for people.
So we will do that and we'll get people a
great hospital in Southland, but we need to we need
to give moving because yep, I think there's genuine good
questions about old Site Newsite.
Speaker 1 (04:05):
You've just announced your fourth quarterly action plan. The main
focus is on infrastructure, maybe not hospitals, but a lot
on roads. And I see you're going to like move
the speed limit up or looking at moving the speed
limit up to one hundred and twenty k's in some regions,
but that necessitates rebuilding the roads. Have we got our
priorities wrong? Is it roads over hospitals?
Speaker 2 (04:24):
No, not at all. We're doing everything that we can
around sort of making sure we've got reliable infrastructure because
we've got major challenges and infrastructure across the country. Just
so you know, I use it as quarterly action plans.
You know, we have forty actions in the last quarter.
We've got forty three to get them before the end
of this year and the quarter four plan, so that
I focus the public service and I focus the government
on the must do stuff. We've got the car and
(04:46):
the ditch. They haul it out of the ditch, getting
into first and second gear, which is what we're doing,
and then get into third, fourth and fifth as we
head down the freeway. We are not giving it back
to labor to put it back in the ditch again.
So the bottom line is very clearly the focus of
last line. They're sort of on balance. There's probably a
lot more law and order stuff, or our ginulaw legislation
came into being a serious Offenders and military academies kicked off.
(05:07):
This one's about infrastructure, and it's really about making progress
on our fast track, consenting that we can get projects
of national and regional significance done. We'll have that as
law by the end of the year. Likewise, we're going
to repel the oil and Gas dan which will be
law by the end of the year, and we'll also
be up and running on things like offshore wind and
other things that will enable that infrastructure to get built.
We've got to get the operating system around infrastructure right
(05:30):
so that we can actually get investors to actually want
to build it with us to get the things that
we need.
Speaker 1 (05:35):
Are you bored with what's happening in the primary sector?
Another good global dairy trade event overnight. That's our way
out of us, isn't it?
Speaker 2 (05:42):
Yeah? Exactly. I mean it's interesting, Jamie. Last week I
was in Thomerson North, I think on Friday, and I
went to the Fonterra dairy R and D facility and
that is excellent. And I've followed Fonterra very closely Miles
as obviously a good friend, and I've been really impressed
by what they're doing offshore, but also with the way
that they're changing their business models so that they move
(06:03):
to higher margin products, so moving into food service, for example,
added value products ambient whipping cream for pastry and bakeries
across China, Korea and tailored to those local markets, high margin,
and you've seen improvement and results as we talked about
last week. So that's exactly what we need to see
across the whole of the primary sector because we've been
(06:24):
playing sometimes too much in the commodity end of it.
We know we can do it if we actually invest
the science, technology innovation, and we can do that if
we actually educate our kids right around how to read
and do mass. But that's exactly what we want to see.
I think the other thing that was really exciting to
see for the sector is yet there's some positive momentum,
certainly in dairy, which is good, and the outlook at
(06:45):
mind Balls looks good for next year based off that
current forecast starting to get to where it needs to
get to. We've obviously got inflation coming down, We've got
interest rates the first cut happening. We've got potentially three
more opportunities for the Reserve to think about further between
now and the February. And if we can get the
costs down and patient and interest rates down for our
(07:06):
father so they've got more of their own money in
their pocket, that's going to be very very helpful for
the sector. Two. So they can then invest in their farms,
in their facilities and their product, so that's all good.
The other thing I think that was pretty exciting, frankly
was the UAE deal, which we did, and Todd McLay
deserves tremendous credit for that. He's on an exceptionally good job.
Speaker 1 (07:25):
I put it to you that the best thing that
could happen to the economy in the next week or
two is next Wednesday when Adrian All looks at that
official cash right and he goes fifty rather than twenty five.
Speaker 2 (07:36):
Yeah, well, there will be a decision for him. I mean,
all I can do is be a good partner in
the sense of manage the fiscal financial position well, which
is what we've been doing. He has to be responsible
for monetary policy under our system, with the independence of
the Reserve Bank. But I think it's pretty clear that
we're on a downward trajectory on interest rates, no doubt
about it, because you it wouldn't have moved last time
(07:57):
if you didn't have confidence that you had the right
fiscal settings support the monetary settings. So yep. I mean
the good users as to rate and pace and speed,
that'll be up to them. But you know, the bottom
line is we are seeing, you know, quite a lot
of pain and suffering across the country, particularly with respect
to our unemployment. Essentially, businesses that have hung through high inflation,
hung and through high interest rates, hung in through a
(08:19):
recession for the last couple of years, three years, and
you know, now basically I've had to add no choice
left for them but to lay off workers. That is
the lag effect of that bad economic management of that
six year aread coming home to roost. And so that's
why you never forget the economic fundamentals and you make
sure you manage them well and you never take management
of them for granted. But if we can get those
interest rates down and how we get to go into
(08:41):
next year, I think we've you know, we've we've got
come through the bottom. We've just got to we've got
some green shoots and we've got some encouraging signs. We've
got to keep moving forward now to get growth back
into the economy. And that's the exciting part because that's
how we've got a great potential. We've got awesome potentially
ahead of us, but we've got growth back in this space.
Speaker 1 (08:59):
Final question for you, and I know you can't tell
me who you want to win the vice presidential debate
this afternoon because you don't know who you're going to
have to work with. But I'm going to ask you this.
Jimmy Carter has turned one hundred years of age, the
first US president to do so. I know you've studied
them at length. You were born in nineteen seventies, so
it's from Richard Nixon onwards, who was the incumbent president
(09:20):
when you were born. Who's the best American president of
your lifetime.
Speaker 2 (09:26):
There's a few, but I actually think the most consequential
would be Reagan. And the reason I say that is
if you think about the seventies, the US went through Vietnam,
they came through Nixon and Watergate. They had Jimmy Carter,
who actually was a pretty good governor, probably not as
great a presidential record, had a fantastic post presidential legacy
(09:48):
around habitat for humanity and all that good stuff. But yeh,
Ben Reagan came in. It was a pretty poor time
for America. Actually, not just similar to how we've been
in New Zealand in terms of economic malaise. It was down.
It was a pretty tough time for America, and he
actually gave them hope and he got the economy sorted
and then got the country moving in right direction. So
I think He was probably the one in that period
(10:09):
of time for.
Speaker 1 (10:09):
Me, a great communicator. Yeah, Bill Clinton and Obama I
thought were quite good as well.
Speaker 2 (10:14):
There you go ninety yep, okay, Christopher Luxon, thank you
for your time, and build the bloody hospital. We well,
we'll get your hospital, don't you worry. It's just got
to be within the budget.
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