January 29, 2026 • 21 mins
Finance Minister Nicola Willis joins Nick Mills in the studio today to discuss the latest Infometrics report that suggests the economy will not recover convincingly this year. Willis shares what she thinks the economy will look like this year, and Nick asks about interest rates, OCR hikes and manage the banks power.
They also talk about the tragedy of Mount Maunganui, and how politics should play out during disasters and why the government and council’s have to do separate enquiries.
Willis shares the feelings in the National Party after Judith Collins departure from politics and what is next for her many portfolios.
And finally – the budget was announced for 28th May. What are the priorities? What can we expect?
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Speaker 1 (00:07):
You're listening to the Wellington Mornings podcast with Nick Mills
from News Talk. Said b in.
Speaker 2 (00:12):
Finance Minister Nikola Willis has joined us in the studio.
Speaker 3 (00:15):
Good morning, Good morning Mack.
Speaker 2 (00:17):
They didn't get the cameras in today. No, they kind
of probably thought, well, we've seen her before, we know
we get her every time.
Speaker 3 (00:24):
Yeah. Well a smart people at home know that you're
going to ask good questions.
Speaker 2 (00:27):
Well hopefully, hopefully I will ask good questions. Firstly, I
want to ask how your break was. Was it good
to reintroduce yourself to the family and spend some time
cuddling on the count.
Speaker 3 (00:36):
We had such a great holiday. We were quite blessed
by the weather gods, so we had lots of sunshine
and it was so great. Actually, my twelve year old,
on the way home from the Widded Upper where we were,
said Mum, I think this is the best summer holiday
we've ever had.
Speaker 2 (00:50):
Wow.
Speaker 3 (00:50):
And you know, it was just simple things. It was
being able to go to the beach and have a
fru jew and play in the sand and catch some crayfish.
Speaker 2 (00:56):
So it was awesome and you know, spend some time
with them. That's probably what they're thinking yeah.
Speaker 3 (01:02):
In a really relaxed way, and they know a lot
of kids up there, and so we have a lot
of social time and yeah, it was really.
Speaker 2 (01:08):
Rightly well, you deserve it. Respect. The economist Brad Olson
scared the living daylights out of me this morning. As
I said to you before we came on here. You know,
we made a family decision to have a crack at
something and do something business wise yesterday. And you know
when Ryan Bridge asked Brad this morning what he was thinking,
what was happening, he was, I think slightly negative, quite negative.
(01:32):
He said that things are still looking tough and the
results haven't turned around just yet and it still could
be a tough year.
Speaker 3 (01:40):
Well, I have read Infometrics, which is Brad's firms analysis,
and there's still forecasting positive growth this year and a
lot faster than last year. The point that they make,
which I agree with, is that we have experienced real
volatility over the past couple of years. You know, we
go roaring ahead for a little while and the growth
numbers up, and then it comes back again, and then
(02:01):
it goes up and then it goes back again. And
that volatility, as Infometrics say, has affected people's confidence so
even though they know that we were growing fast in
the third quarter of last year, there's a bit of
suspended belief as to whether or not that will be
sustained because of what's happened in the past.
Speaker 2 (02:18):
Basically, if we're comparing last year, I reckon last year
was tougher than the year before. I really do. So
if you're comparing last year, we haven't got a lot,
and we're one or two percent up on last year,
I need ten or twelve or fifteen percent up.
Speaker 3 (02:31):
Well, there is a CONSENSUSMNG of economists that this year
will be much better than last year, and that's because
the fundamentals are in place. And Brad acknowledges that in
his commentary that we do actually have inflation. While it's
blipped at three point one, we've got it well back
from where it's been. The official cash rate has now
had nine reductions, so it's in a much lower place
(02:54):
than it has been. So those lower interest rates are
flowing through, and we've still got great exports happening. We're
getting good prices for our goods, so there are those
positive tailwinds.
Speaker 2 (03:04):
Do you think we're going to have further reductions in.
Speaker 3 (03:06):
The official cash rate. Well, I always have to be
very careful about this because that is a matter for
the role.
Speaker 2 (03:12):
I'm just asking you.
Speaker 3 (03:12):
Sick we are, Yeah, I'm not even really me. I'm
not meant to try and influence them in any way
and their decision making. What I give them as a mandate,
I say, keep inflation under control over the medium term
and use the official cash rate to help you with that.
If you look at what they've been saying their last update,
they said that they didn't predict the official cash rate
would be going up until twenty twenty seven. So it
(03:34):
seems unlikely to me that it'll be happening any time.
Speaker 2 (03:38):
Explain to me why there's all this talk. And I
was listening to hear the show last night and she
said that she's concerned. In My boss in Auckland this
morning said exactly the same thing. They concerned that their
numbers come up, their refinancing comes up in June or July.
They don't believe they're going to get a cut. Why
are the interest rates coming back up so quickly?
Speaker 3 (03:57):
Yeah, So we always talk about the official cash rate,
which is the basic interest rate that the Reserve Bank sets.
Then the banks themselves get to decide how they pass
that through. So when the banks are making decisions about that,
they're also thinking ahead. They're looking at what's going to
happen with that official cash rate in future. And so
what you've seen over recent weeks is that some banks
(04:17):
have made the assessment that they think it'll be earlier
than twenty twenty seven that the official cash rate increases,
and they are therefore adjusted the way they're setting interest rates.
And so look, that's one factor. Another factor is that
banks are always looking at the international funding environment and
what's happening with the price of borrowing internationally. So there's
a number of things that go into their decision making.
But here's the basic point. When the official cash rate
(04:40):
is lower, your interest rates are lower. Under the last government,
the official cash rate rose eleven times. Under our government,
it's dropped nine time. We're in a much better position
than we were.
Speaker 2 (04:51):
But I'm sorry to rain on your speech, but I
mean iikesen. Also remember under the last government paying four
percent interest.
Speaker 3 (04:59):
Yes, during that post COVID period, we had rock bottom
interest rates, and then of course they.
Speaker 2 (05:05):
Are quite really far gone forever.
Speaker 3 (05:07):
Well, you'll recall that those rock bottom interest rates had
some consequences. One of the consequences was that house prices
went up thirty percent in one year, and of course
I think we all know that that kind of growth
is never sustainable and actually came with its own problems,
and we've seen some of that having to one wine now.
So arguably interest rates only ever go really really low
(05:31):
like that when there's been a crisis of the magnitude
of COVID nineteen.
Speaker 2 (05:35):
So I still don't really get your thoughts on it.
So if I was redoing my interest rates today, I
should just take whatever's getting there and know that it's
that might be as good as it's ever going to get.
Speaker 3 (05:46):
Well. I would never offer financial advice on the radio.
That's both against the law, and everyone has such different
circumstances in terms of what you're weighing up and what
your risk profile looks like. One thing I always do say,
do shop around and hold banks feats to the fire.
And the reason for that is that often the rate
that the advertising isn't the best rate they have to offer.
(06:09):
If you push them a bit further, they sometimes have
special rates that they're able to offer in a competitive
situation because they want you to stay being their customer,
and if you say, look, I might go somewhere else,
sometimes they'll sharpen up their offer.
Speaker 2 (06:20):
You were going to do that, You were going to
do that on our behalf as our financement. So you
are going to crack down on the banks, and you
were going to come out of the banks. You are
quite vocal about that. Has that sort of gone off
your radar or is it still something on your rating?
Speaker 3 (06:35):
No, not at all. We've taken a lot of steps there.
So some of it is around the rules for banks,
so we've loosened them up so that more people can
do financial services, can get into that banking area. Part
of it is about this thing we call open banking,
which is allowing data that you use through your banking
to be shared more openly if you choose, so that
(06:55):
other competitive people can offer you a competitive rate. We've
also asked the banks themselves to make it much easier
for you to compare your mor googe rate with another
more good rate, and they're making progress there. So we've
done a lot of what I would call small things
that overall reform the environment in watch banks are operating.
Speaker 2 (07:14):
Open banking hasn't worked in Europe you'll be aware of that.
They thought it was going to be a major improvement
on their banking system, but after a few years it
just hasn't worked. So it's not hardly going to make
any major changes here, is it.
Speaker 3 (07:28):
Well. I think some people, certainly in the UK when
I visited their last year of the view that open
banking has been really great for particularly younger consumers have
taken it up because they like being able to use
different products and have different information about their financial choices,
and there has been quite a big change there. Open
banking is only as good as how many people wish
(07:49):
to use it, and then how many startups decide that, yeah,
there's an opportunity for us. And we've got a really
cool fintech sector in New Zealand and I think we're
going to see some pretty innovative products popping up.
Speaker 2 (07:59):
Take a short break and be back with Finance Minister
Nichola Willis. I want to talk to her about the
tragedy amount Monganui and whether Wellington's ready if anything like
that happens to here. And also obviously I want to
get an opinion on Judith Collins retiring and who the
hell is going to get all those portfolios, there's a few.
It's almost a job for someone for a month to
(08:19):
find people to do it with. Finance Minister Nicola Willis
joins us in the studio to have a bit of
a chat. Let's talk about Mount Monganui. You called Chris
Hipkins out for using it politically when it was a disaster.
I thought the same thing when I watched Parliament. I
watched Parliament for a bit and I thought after everyone
(08:39):
gave their emotional speeches that it just went back to
using it as a political thing. I mean, this is
not a time to be political.
Speaker 3 (08:47):
Yeah, that's what I feel now. Of course, in our
democracy we will have different perspectives and we should be
able to debate them and of course talking about climate
change response and preparing for future events as part of
the political discussion. I just felt it was a bit
on the nose and far too soon when he started
conflate funding decisions that had been made about unrelated issues
(09:10):
and almost implying that they were related to why the
landslide had happened, and I felt very uncomfortable about that.
I called it out because actually we're normally quite civil
in New Zealand politics there's kind of a rule you
don't politicize tragedy.
Speaker 2 (09:24):
But I felt watching I turned it off, you know,
because I felt that that was exactly what was happening
on your first day back in parliament, and I didn't
feel comfortable with it.
Speaker 3 (09:33):
Yeah, it made me feel uncomfortable, and I think I
was just sitting heavy with many of us, just the
absolute emotional distress that we knew those families were experiencing,
not having recovered their loved ones, having had the most
shocking news anyone could have, and the whole Torunga community
who look to them out as this really special beacon
(09:55):
of why they loved living there, and now for them
to look at it and always see it as a
place of terrible human loss and tragedy that hits hard.
Speaker 2 (10:03):
Did you see the photo and you're probably too busy
to look in papers, but you see the photo of
the young boy, the fifteen year old with his young
two year old brother, and that photo, I have to
admit I cried. I looked at it and I went,
holy hell, this is what that made it real?
Speaker 3 (10:20):
Yeah, I think, and even when they just announced the
high school that he came from, and just thinking of
all of the kids at that high school, who any
of them might have experienced death yet and then to
have lost someone.
Speaker 2 (10:32):
Little vicdom for their life. They'll remember that for their
whole lives.
Speaker 3 (10:35):
Oh absolutely they will. And I think for all of
us with children, all of us with loved ones, it's
just that reminder that we take for granted each day,
you know, the life and well being of our family,
and then at a moment's notice, completely unfairly, with no
rhyme or reason, the world can take them from us.
Speaker 2 (10:53):
Do we need an inquiry?
Speaker 3 (10:54):
Yes we do, Absolutely, yes we do, because we do
need to get answers for the families as to whether
anything could have been done along the way better end,
most importantly, whether there are lessons we can learn for
the future.
Speaker 2 (11:10):
Talk to me about Judith Colins. Now I've met her
a couple of times. I mean, the persona you see
on TV is not Judith Colins.
Speaker 3 (11:18):
Well, it's part of Judith Colins. I mean, she's got
a wicked sense of humor. She's sharp, she's witty, she's
incredibly hard working. You know, she really monsters work. But
the part of her that I've experienced that I don't
think new Zealanders see on TV is she's very caring
on a one to one person to person basis. She
really looks out for other women around Parliament. She's often
(11:40):
the first to come to me and say, man, oh man,
you know they're giving you a lot of jib but
you know my advice is, you know, stay strong and
he's here's what I see that you're doing really well,
and feel good about this and know that you're going
to come through into another chapter that's going to be better.
And just always there to encourage, always sympathetic and I
think wisdom. Twenty four years in politics, she's got wisdom.
Speaker 2 (12:03):
You guys are going to really miss it. I said
when it was first announced that she's the rock, and
she is a rock. There's no bs about her. She
doesn't come out and try and be this or that.
It's just the rock. Yeah.
Speaker 3 (12:17):
Look, I think we will miss her around Parliament. Of course,
she is very determined. She'd want me to say she's
not retiring Nick, she's just moving on from politics. She's
going to keep working. She'll be at the Law Commission
being the president there. Look, we will miss her, but
it's the nature of any workplace. It's the nature of
Parliament that people come and they go, New talent emerges,
(12:39):
people come from different corners. And look, there's no doubt
she's been an absolute stalt of the National Party. She's
made an enormous contribution to our party and to Parliament.
Speaker 2 (12:49):
Okay, give me something, now, you can give me something.
Tell me who's going to take her portfolios? Because there's
one hell of a lot of them.
Speaker 3 (12:54):
Yeah, she does have a lot of portfolios. Look, I
simply don't know. I do suppose that the Prime Minister
when he's making that judgment, because therese really are his decisions.
He's the captain of the team. He gets to decide
who plays what position and who does want I do
anticipate that he won't give them all to one person.
He'll spread them around.
Speaker 2 (13:12):
Your man from christ I can't remember his name, and
I mean, he's your bright spark coming up. He's going
to get something.
Speaker 3 (13:18):
In he Look, we've got a lot of bright sparks
coming up. I think you're referring to James me who
has been brought into the ministry and taken on some responsibilities.
You've seen recently Chris Pink has been given some more responsibility.
We've got a lot of talent and actually, certainly on
the National Party back bench people who aren't ministers yet,
there's talent there. And these people on the team have
got pretty broad shoulders who are already ministers who could
(13:40):
probably take on a bit more.
Speaker 2 (13:41):
Okay, you're going to take on more, can't couldn't give
you more.
Speaker 3 (13:44):
I do what the Prime Minister asks me to.
Speaker 2 (13:46):
Do as final as Finance minister. Why the hell haven't
we dropped the university free year? Is it such a
hospital pass for you and the voters? And will it
Obviously it's not going to be done this year because
it's just see the proof is out now that it's
not making a difference, it's not affecting the people that
(14:07):
are supposed to effect.
Speaker 3 (14:08):
Will totally agree. So the silly idea that Labor had
classic Labor make a big promise, Oh we're going to
make free fees free in the first year, and it's
going to increase participation in tertiary education for people from
lower income households. It has not done that. It has
completely failed in that mission. And I said at the time,
if you care about that, the thing you actually have
(14:30):
to do is get those kids better qualified at school
so that they have the option of going to university.
The fees aren't the problem because they can already borrow those.
The problemers too many of them being failed at secondary
school anyway, so we're always.
Speaker 2 (14:42):
Opposed when you going to drop it.
Speaker 3 (14:43):
Well, in the coalition agreement with New Zealand, first we
adopted their policy which was to say, instead of making
the first year free, those students who complete their qualification
can get the final year of their fees free. So
that was the coalition commitment. So we've changed the policy
to reflect that. And that's based on the idea that
why pay for everyone to do their first year when
(15:05):
actually what you want to reward as the kids who complete.
Speaker 2 (15:07):
Yeah, and I think that's a great idea, but you
and I both know that by the last year or
at the university, you've got everything under control. You've got
your part time job, you've got your mates, you've got
your flat, you've got your car, you're sorted. So they
don't need it even worse than I need you.
Speaker 3 (15:21):
Well, the reality is many many tertiary students borrow their
fees interest free from the government, so they don't pay
the fees. So essentially what it's doing is lowering the
amount of borrowing that someone has to do in their
final year at university. You know, I'd point out something
which people forget in New Zealand. They think about student
loans as the big support the government gives. Actually, we
(15:43):
fund more than seventy percent of the cost of your
actual tuition at university or polytech. We subsidize the polytech
and the university themselves, so you're only paying a small
top up in those fees that you borrow. So we're
really generous in our two shoe.
Speaker 2 (15:59):
We see it drop well.
Speaker 3 (16:01):
Look, as I say, it's a coalition commitment to make
it final years fees free, which is the change that
we've made different political parties. I'm sure on the election
campaign trial we'll have to come up with their own positions.
Speaker 2 (16:12):
When are you going to decide whether you're going to stand.
Speaker 3 (16:15):
I've decided, Nick, you've missed this, did you? Yes?
Speaker 2 (16:18):
Oh my god?
Speaker 3 (16:20):
Here I announced just before Christmas that I will be
standing for a list only position for the National Party.
I will not be putting myself forward for selection in
a Wellington electorate.
Speaker 2 (16:30):
Do they know who's who is?
Speaker 3 (16:32):
We are in those selection processes currently or there, or
they're kicking off in the next little bit. I am
aware that we've got some talent who wants to put
themselves forward to represent Wellington for the National Party. So
that's except I'm kind.
Speaker 2 (16:44):
Of disappointed by that. I'm disappointed either I didn't know
about it, and be that you're not standing But you know,
what about what about when you heard this morning or
yesterday afternoon if you're listening to the show yesterday morning,
when if you're listening to the show, which I'm sure
you're too busy to that, the city Council have made
another cock up about money as finance minister, how does
that sit with you? Yeah?
Speaker 3 (17:05):
Look, I followed that, and and of course every Wellingtonian
is going to be disappointed in some cases but embarrassed,
like why does our city make these sort of amateur errors.
It's just a real reminder that you need ordered and
risk committees, you need oversight, you need assurance, you need
double checking. What I do appreciate is the way the
mayor has been upfront, really transparent and clear about it.
(17:28):
So the proof will be in the putting right that
actually more systems and controls are put in so it
can never happen again.
Speaker 2 (17:34):
Are you surprised at how well Andrew Little has sort
of slotted into that position.
Speaker 3 (17:40):
I've always thought that he is very competent and capable
and look a big task on his hands.
Speaker 2 (17:45):
Right budget twenty eighth of May.
Speaker 3 (17:50):
Indeed, looking forward, and.
Speaker 2 (17:51):
You've promised and promised that there's not going to be
any lolly scrambles. What the hell's a budget without a
lolly scramble. It's like a five year old's party without it.
Speaker 3 (18:01):
Well, of course, remembering that when I do a lolly scramble,
I'm not getting the lollyes some from him, I'm taking
them from someone else's back pocket and then spreading them around.
So actually, one of the things I think good governments
need to do is not come to every budget and
tax you more, which is of course what some of
my opponents would want to do. So we are going
to be making investments in the budget, and we've got
(18:22):
really clear priorities, so we're not going to do everything.
The priorities are health that will be getting investment, Education
that will be getting investment, Law and order which is
the whole police, courts justice area that will be getting investment.
And then finally as we've committed Defense will be getting
investment because we're on that mission to rebuild the defense
force capability. So there will be investments there. But how
(18:44):
much investment we can make there depends on what savings
we can make on the other side of the ledger.
So we will be doing reprioritization efficiency, finding things that
aren't working and stopping them.
Speaker 2 (18:55):
We have a real problem with health, don't we we have.
I mean, you understand it. You've got kids, you know it.
We've got a problem with health. No amount of money
throwing it, it's going to fix it. What do we
do well?
Speaker 3 (19:07):
Look, I think the challenge for health is twofold. One.
It's that we do have an aging population and as
people get older, they demand more health services. And the
second challenge is that we have for some years had
shortages of some of the key specialist staff that we
need to deliver services. And an example of that is
(19:28):
many people complain to me saying I have to wait
so long to get a GP appointment. So our government
has been getting at those problems. We're training a lot
more doctors. We're setting up that Waykato Med School. We've
set up schemes to make sure we can get nurses
into primary care, lengthening prescriptions so your GP doesn't have
to spend so much time just renewing your prescription, increasing
(19:49):
the role for nurse practitioners so they can take over
some of those jobs. So we're making lots of changes
to address those issues, and it starts with just having
clear targets. So we've set targets more elective surgery, less
time in the emergency room, more child immunization. These are
the things that make a difference. And actually Health end Z,
despite all the challenges they face, are making progress on
those targets.
Speaker 2 (20:09):
It just doesn't feel like that. So nothing in the
budget is going to surprise us or shock us. Oh well,
well disappointed.
Speaker 3 (20:17):
I think budgets always have things in them that people
weren't expecting, and our budget will have things in it
that are really consistent with the values and the priorities
that we've set out now for a couple of years.
Speaker 2 (20:30):
And will there be a lot of demands by your
coalition partners on that because they've got an election to
win as well. I mean, is it going to be
a true national budget or is it.
Speaker 3 (20:40):
Going to be a cover Well, i'll tell you what
the Minister of Foreign Affairs, the former Deputy Prime Minister
wantst In Peter's always the first thing he wants is
money for the Ministry of Foreign Affairs, so we'll have
that discussion over the next few weeks.
Speaker 2 (20:51):
Thank you for coming in, Enjoy your weekend. Appreciate you
taking the time out of your very Britsy schedule to
come on the show. We'll catch you when you've got
time again. Keep up the good work, keep striving.
Speaker 3 (21:03):
Hey, thank you so much, Nick, And can I just
join all the Welling Times who say thank you for
the Sporse Ghosts. It was an amazing institution and we'll
be sorry to see it go.
Speaker 2 (21:12):
Oh, thank you very much. Appreciate you.
Speaker 1 (21:15):
For more from Wellington Mornings with Nick Mills, listen live
to news Talks It'd Be Wellington from nine am weekdays,
or follow the podcast on iHeartRadio.
You're listening to the Wellington Mornings podcast with Nick Mills
from News Talk. Said b in.
Speaker 2 (00:12):
Finance Minister Nikola Willis has joined us in the studio.
Speaker 3 (00:15):
Good morning, Good morning Mack.
Speaker 2 (00:17):
They didn't get the cameras in today. No, they kind
of probably thought, well, we've seen her before, we know
we get her every time.
Speaker 3 (00:24):
Yeah. Well a smart people at home know that you're
going to ask good questions.
Speaker 2 (00:27):
Well hopefully, hopefully I will ask good questions. Firstly, I
want to ask how your break was. Was it good
to reintroduce yourself to the family and spend some time
cuddling on the count.
Speaker 3 (00:36):
We had such a great holiday. We were quite blessed
by the weather gods, so we had lots of sunshine
and it was so great. Actually, my twelve year old,
on the way home from the Widded Upper where we were,
said Mum, I think this is the best summer holiday
we've ever had.
Speaker 2 (00:50):
Wow.
Speaker 3 (00:50):
And you know, it was just simple things. It was
being able to go to the beach and have a
fru jew and play in the sand and catch some crayfish.
Speaker 2 (00:56):
So it was awesome and you know, spend some time
with them. That's probably what they're thinking yeah.
Speaker 3 (01:02):
In a really relaxed way, and they know a lot
of kids up there, and so we have a lot
of social time and yeah, it was really.
Speaker 2 (01:08):
Rightly well, you deserve it. Respect. The economist Brad Olson
scared the living daylights out of me this morning. As
I said to you before we came on here. You know,
we made a family decision to have a crack at
something and do something business wise yesterday. And you know
when Ryan Bridge asked Brad this morning what he was thinking,
what was happening, he was, I think slightly negative, quite negative.
(01:32):
He said that things are still looking tough and the
results haven't turned around just yet and it still could
be a tough year.
Speaker 3 (01:40):
Well, I have read Infometrics, which is Brad's firms analysis,
and there's still forecasting positive growth this year and a
lot faster than last year. The point that they make,
which I agree with, is that we have experienced real
volatility over the past couple of years. You know, we
go roaring ahead for a little while and the growth
numbers up, and then it comes back again, and then
(02:01):
it goes up and then it goes back again. And
that volatility, as Infometrics say, has affected people's confidence so
even though they know that we were growing fast in
the third quarter of last year, there's a bit of
suspended belief as to whether or not that will be
sustained because of what's happened in the past.
Speaker 2 (02:18):
Basically, if we're comparing last year, I reckon last year
was tougher than the year before. I really do. So
if you're comparing last year, we haven't got a lot,
and we're one or two percent up on last year,
I need ten or twelve or fifteen percent up.
Speaker 3 (02:31):
Well, there is a CONSENSUSMNG of economists that this year
will be much better than last year, and that's because
the fundamentals are in place. And Brad acknowledges that in
his commentary that we do actually have inflation. While it's
blipped at three point one, we've got it well back
from where it's been. The official cash rate has now
had nine reductions, so it's in a much lower place
(02:54):
than it has been. So those lower interest rates are
flowing through, and we've still got great exports happening. We're
getting good prices for our goods, so there are those
positive tailwinds.
Speaker 2 (03:04):
Do you think we're going to have further reductions in.
Speaker 3 (03:06):
The official cash rate. Well, I always have to be
very careful about this because that is a matter for
the role.
Speaker 2 (03:12):
I'm just asking you.
Speaker 3 (03:12):
Sick we are, Yeah, I'm not even really me. I'm
not meant to try and influence them in any way
and their decision making. What I give them as a mandate,
I say, keep inflation under control over the medium term
and use the official cash rate to help you with that.
If you look at what they've been saying their last update,
they said that they didn't predict the official cash rate
would be going up until twenty twenty seven. So it
(03:34):
seems unlikely to me that it'll be happening any time.
Speaker 2 (03:38):
Explain to me why there's all this talk. And I
was listening to hear the show last night and she
said that she's concerned. In My boss in Auckland this
morning said exactly the same thing. They concerned that their
numbers come up, their refinancing comes up in June or July.
They don't believe they're going to get a cut. Why
are the interest rates coming back up so quickly?
Speaker 3 (03:57):
Yeah, So we always talk about the official cash rate,
which is the basic interest rate that the Reserve Bank sets.
Then the banks themselves get to decide how they pass
that through. So when the banks are making decisions about that,
they're also thinking ahead. They're looking at what's going to
happen with that official cash rate in future. And so
what you've seen over recent weeks is that some banks
(04:17):
have made the assessment that they think it'll be earlier
than twenty twenty seven that the official cash rate increases,
and they are therefore adjusted the way they're setting interest rates.
And so look, that's one factor. Another factor is that
banks are always looking at the international funding environment and
what's happening with the price of borrowing internationally. So there's
a number of things that go into their decision making.
But here's the basic point. When the official cash rate
(04:40):
is lower, your interest rates are lower. Under the last government,
the official cash rate rose eleven times. Under our government,
it's dropped nine time. We're in a much better position
than we were.
Speaker 2 (04:51):
But I'm sorry to rain on your speech, but I
mean iikesen. Also remember under the last government paying four
percent interest.
Speaker 3 (04:59):
Yes, during that post COVID period, we had rock bottom
interest rates, and then of course they.
Speaker 2 (05:05):
Are quite really far gone forever.
Speaker 3 (05:07):
Well, you'll recall that those rock bottom interest rates had
some consequences. One of the consequences was that house prices
went up thirty percent in one year, and of course
I think we all know that that kind of growth
is never sustainable and actually came with its own problems,
and we've seen some of that having to one wine now.
So arguably interest rates only ever go really really low
(05:31):
like that when there's been a crisis of the magnitude
of COVID nineteen.
Speaker 2 (05:35):
So I still don't really get your thoughts on it.
So if I was redoing my interest rates today, I
should just take whatever's getting there and know that it's
that might be as good as it's ever going to get.
Speaker 3 (05:46):
Well. I would never offer financial advice on the radio.
That's both against the law, and everyone has such different
circumstances in terms of what you're weighing up and what
your risk profile looks like. One thing I always do say,
do shop around and hold banks feats to the fire.
And the reason for that is that often the rate
that the advertising isn't the best rate they have to offer.
(06:09):
If you push them a bit further, they sometimes have
special rates that they're able to offer in a competitive
situation because they want you to stay being their customer,
and if you say, look, I might go somewhere else,
sometimes they'll sharpen up their offer.
Speaker 2 (06:20):
You were going to do that, You were going to
do that on our behalf as our financement. So you
are going to crack down on the banks, and you
were going to come out of the banks. You are
quite vocal about that. Has that sort of gone off
your radar or is it still something on your rating?
Speaker 3 (06:35):
No, not at all. We've taken a lot of steps there.
So some of it is around the rules for banks,
so we've loosened them up so that more people can
do financial services, can get into that banking area. Part
of it is about this thing we call open banking,
which is allowing data that you use through your banking
to be shared more openly if you choose, so that
(06:55):
other competitive people can offer you a competitive rate. We've
also asked the banks themselves to make it much easier
for you to compare your mor googe rate with another
more good rate, and they're making progress there. So we've
done a lot of what I would call small things
that overall reform the environment in watch banks are operating.
Speaker 2 (07:14):
Open banking hasn't worked in Europe you'll be aware of that.
They thought it was going to be a major improvement
on their banking system, but after a few years it
just hasn't worked. So it's not hardly going to make
any major changes here, is it.
Speaker 3 (07:28):
Well. I think some people, certainly in the UK when
I visited their last year of the view that open
banking has been really great for particularly younger consumers have
taken it up because they like being able to use
different products and have different information about their financial choices,
and there has been quite a big change there. Open
banking is only as good as how many people wish
(07:49):
to use it, and then how many startups decide that, yeah,
there's an opportunity for us. And we've got a really
cool fintech sector in New Zealand and I think we're
going to see some pretty innovative products popping up.
Speaker 2 (07:59):
Take a short break and be back with Finance Minister
Nichola Willis. I want to talk to her about the
tragedy amount Monganui and whether Wellington's ready if anything like
that happens to here. And also obviously I want to
get an opinion on Judith Collins retiring and who the
hell is going to get all those portfolios, there's a few.
It's almost a job for someone for a month to
(08:19):
find people to do it with. Finance Minister Nicola Willis
joins us in the studio to have a bit of
a chat. Let's talk about Mount Monganui. You called Chris
Hipkins out for using it politically when it was a disaster.
I thought the same thing when I watched Parliament. I
watched Parliament for a bit and I thought after everyone
(08:39):
gave their emotional speeches that it just went back to
using it as a political thing. I mean, this is
not a time to be political.
Speaker 3 (08:47):
Yeah, that's what I feel now. Of course, in our
democracy we will have different perspectives and we should be
able to debate them and of course talking about climate
change response and preparing for future events as part of
the political discussion. I just felt it was a bit
on the nose and far too soon when he started
conflate funding decisions that had been made about unrelated issues
(09:10):
and almost implying that they were related to why the
landslide had happened, and I felt very uncomfortable about that.
I called it out because actually we're normally quite civil
in New Zealand politics there's kind of a rule you
don't politicize tragedy.
Speaker 2 (09:24):
But I felt watching I turned it off, you know,
because I felt that that was exactly what was happening
on your first day back in parliament, and I didn't
feel comfortable with it.
Speaker 3 (09:33):
Yeah, it made me feel uncomfortable, and I think I
was just sitting heavy with many of us, just the
absolute emotional distress that we knew those families were experiencing,
not having recovered their loved ones, having had the most
shocking news anyone could have, and the whole Torunga community
who look to them out as this really special beacon
(09:55):
of why they loved living there, and now for them
to look at it and always see it as a
place of terrible human loss and tragedy that hits hard.
Speaker 2 (10:03):
Did you see the photo and you're probably too busy
to look in papers, but you see the photo of
the young boy, the fifteen year old with his young
two year old brother, and that photo, I have to
admit I cried. I looked at it and I went,
holy hell, this is what that made it real?
Speaker 3 (10:20):
Yeah, I think, and even when they just announced the
high school that he came from, and just thinking of
all of the kids at that high school, who any
of them might have experienced death yet and then to
have lost someone.
Speaker 2 (10:32):
Little vicdom for their life. They'll remember that for their
whole lives.
Speaker 3 (10:35):
Oh absolutely they will. And I think for all of
us with children, all of us with loved ones, it's
just that reminder that we take for granted each day,
you know, the life and well being of our family,
and then at a moment's notice, completely unfairly, with no
rhyme or reason, the world can take them from us.
Speaker 2 (10:53):
Do we need an inquiry?
Speaker 3 (10:54):
Yes we do, Absolutely, yes we do, because we do
need to get answers for the families as to whether
anything could have been done along the way better end,
most importantly, whether there are lessons we can learn for
the future.
Speaker 2 (11:10):
Talk to me about Judith Colins. Now I've met her
a couple of times. I mean, the persona you see
on TV is not Judith Colins.
Speaker 3 (11:18):
Well, it's part of Judith Colins. I mean, she's got
a wicked sense of humor. She's sharp, she's witty, she's
incredibly hard working. You know, she really monsters work. But
the part of her that I've experienced that I don't
think new Zealanders see on TV is she's very caring
on a one to one person to person basis. She
really looks out for other women around Parliament. She's often
(11:40):
the first to come to me and say, man, oh man,
you know they're giving you a lot of jib but
you know my advice is, you know, stay strong and
he's here's what I see that you're doing really well,
and feel good about this and know that you're going
to come through into another chapter that's going to be better.
And just always there to encourage, always sympathetic and I
think wisdom. Twenty four years in politics, she's got wisdom.
Speaker 2 (12:03):
You guys are going to really miss it. I said
when it was first announced that she's the rock, and
she is a rock. There's no bs about her. She
doesn't come out and try and be this or that.
It's just the rock. Yeah.
Speaker 3 (12:17):
Look, I think we will miss her around Parliament. Of course,
she is very determined. She'd want me to say she's
not retiring Nick, she's just moving on from politics. She's
going to keep working. She'll be at the Law Commission
being the president there. Look, we will miss her, but
it's the nature of any workplace. It's the nature of
Parliament that people come and they go, New talent emerges,
(12:39):
people come from different corners. And look, there's no doubt
she's been an absolute stalt of the National Party. She's
made an enormous contribution to our party and to Parliament.
Speaker 2 (12:49):
Okay, give me something, now, you can give me something.
Tell me who's going to take her portfolios? Because there's
one hell of a lot of them.
Speaker 3 (12:54):
Yeah, she does have a lot of portfolios. Look, I
simply don't know. I do suppose that the Prime Minister
when he's making that judgment, because therese really are his decisions.
He's the captain of the team. He gets to decide
who plays what position and who does want I do
anticipate that he won't give them all to one person.
He'll spread them around.
Speaker 2 (13:12):
Your man from christ I can't remember his name, and
I mean, he's your bright spark coming up. He's going
to get something.
Speaker 3 (13:18):
In he Look, we've got a lot of bright sparks
coming up. I think you're referring to James me who
has been brought into the ministry and taken on some responsibilities.
You've seen recently Chris Pink has been given some more responsibility.
We've got a lot of talent and actually, certainly on
the National Party back bench people who aren't ministers yet,
there's talent there. And these people on the team have
got pretty broad shoulders who are already ministers who could
(13:40):
probably take on a bit more.
Speaker 2 (13:41):
Okay, you're going to take on more, can't couldn't give
you more.
Speaker 3 (13:44):
I do what the Prime Minister asks me to.
Speaker 2 (13:46):
Do as final as Finance minister. Why the hell haven't
we dropped the university free year? Is it such a
hospital pass for you and the voters? And will it
Obviously it's not going to be done this year because
it's just see the proof is out now that it's
not making a difference, it's not affecting the people that
(14:07):
are supposed to effect.
Speaker 3 (14:08):
Will totally agree. So the silly idea that Labor had
classic Labor make a big promise, Oh we're going to
make free fees free in the first year, and it's
going to increase participation in tertiary education for people from
lower income households. It has not done that. It has
completely failed in that mission. And I said at the time,
if you care about that, the thing you actually have
(14:30):
to do is get those kids better qualified at school
so that they have the option of going to university.
The fees aren't the problem because they can already borrow those.
The problemers too many of them being failed at secondary
school anyway, so we're always.
Speaker 2 (14:42):
Opposed when you going to drop it.
Speaker 3 (14:43):
Well, in the coalition agreement with New Zealand, first we
adopted their policy which was to say, instead of making
the first year free, those students who complete their qualification
can get the final year of their fees free. So
that was the coalition commitment. So we've changed the policy
to reflect that. And that's based on the idea that
why pay for everyone to do their first year when
(15:05):
actually what you want to reward as the kids who complete.
Speaker 2 (15:07):
Yeah, and I think that's a great idea, but you
and I both know that by the last year or
at the university, you've got everything under control. You've got
your part time job, you've got your mates, you've got
your flat, you've got your car, you're sorted. So they
don't need it even worse than I need you.
Speaker 3 (15:21):
Well, the reality is many many tertiary students borrow their
fees interest free from the government, so they don't pay
the fees. So essentially what it's doing is lowering the
amount of borrowing that someone has to do in their
final year at university. You know, I'd point out something
which people forget in New Zealand. They think about student
loans as the big support the government gives. Actually, we
(15:43):
fund more than seventy percent of the cost of your
actual tuition at university or polytech. We subsidize the polytech
and the university themselves, so you're only paying a small
top up in those fees that you borrow. So we're
really generous in our two shoe.
Speaker 2 (15:59):
We see it drop well.
Speaker 3 (16:01):
Look, as I say, it's a coalition commitment to make
it final years fees free, which is the change that
we've made different political parties. I'm sure on the election
campaign trial we'll have to come up with their own positions.
Speaker 2 (16:12):
When are you going to decide whether you're going to stand.
Speaker 3 (16:15):
I've decided, Nick, you've missed this, did you? Yes?
Speaker 2 (16:18):
Oh my god?
Speaker 3 (16:20):
Here I announced just before Christmas that I will be
standing for a list only position for the National Party.
I will not be putting myself forward for selection in
a Wellington electorate.
Speaker 2 (16:30):
Do they know who's who is?
Speaker 3 (16:32):
We are in those selection processes currently or there, or
they're kicking off in the next little bit. I am
aware that we've got some talent who wants to put
themselves forward to represent Wellington for the National Party. So
that's except I'm kind.
Speaker 2 (16:44):
Of disappointed by that. I'm disappointed either I didn't know
about it, and be that you're not standing But you know,
what about what about when you heard this morning or
yesterday afternoon if you're listening to the show yesterday morning,
when if you're listening to the show, which I'm sure
you're too busy to that, the city Council have made
another cock up about money as finance minister, how does
that sit with you? Yeah?
Speaker 3 (17:05):
Look, I followed that, and and of course every Wellingtonian
is going to be disappointed in some cases but embarrassed,
like why does our city make these sort of amateur errors.
It's just a real reminder that you need ordered and
risk committees, you need oversight, you need assurance, you need
double checking. What I do appreciate is the way the
mayor has been upfront, really transparent and clear about it.
(17:28):
So the proof will be in the putting right that
actually more systems and controls are put in so it
can never happen again.
Speaker 2 (17:34):
Are you surprised at how well Andrew Little has sort
of slotted into that position.
Speaker 3 (17:40):
I've always thought that he is very competent and capable
and look a big task on his hands.
Speaker 2 (17:45):
Right budget twenty eighth of May.
Speaker 3 (17:50):
Indeed, looking forward, and.
Speaker 2 (17:51):
You've promised and promised that there's not going to be
any lolly scrambles. What the hell's a budget without a
lolly scramble. It's like a five year old's party without it.
Speaker 3 (18:01):
Well, of course, remembering that when I do a lolly scramble,
I'm not getting the lollyes some from him, I'm taking
them from someone else's back pocket and then spreading them around.
So actually, one of the things I think good governments
need to do is not come to every budget and
tax you more, which is of course what some of
my opponents would want to do. So we are going
to be making investments in the budget, and we've got
(18:22):
really clear priorities, so we're not going to do everything.
The priorities are health that will be getting investment, Education
that will be getting investment, Law and order which is
the whole police, courts justice area that will be getting investment.
And then finally as we've committed Defense will be getting
investment because we're on that mission to rebuild the defense
force capability. So there will be investments there. But how
(18:44):
much investment we can make there depends on what savings
we can make on the other side of the ledger.
So we will be doing reprioritization efficiency, finding things that
aren't working and stopping them.
Speaker 2 (18:55):
We have a real problem with health, don't we we have.
I mean, you understand it. You've got kids, you know it.
We've got a problem with health. No amount of money
throwing it, it's going to fix it. What do we
do well?
Speaker 3 (19:07):
Look, I think the challenge for health is twofold. One.
It's that we do have an aging population and as
people get older, they demand more health services. And the
second challenge is that we have for some years had
shortages of some of the key specialist staff that we
need to deliver services. And an example of that is
(19:28):
many people complain to me saying I have to wait
so long to get a GP appointment. So our government
has been getting at those problems. We're training a lot
more doctors. We're setting up that Waykato Med School. We've
set up schemes to make sure we can get nurses
into primary care, lengthening prescriptions so your GP doesn't have
to spend so much time just renewing your prescription, increasing
(19:49):
the role for nurse practitioners so they can take over
some of those jobs. So we're making lots of changes
to address those issues, and it starts with just having
clear targets. So we've set targets more elective surgery, less
time in the emergency room, more child immunization. These are
the things that make a difference. And actually Health end Z,
despite all the challenges they face, are making progress on
those targets.
Speaker 2 (20:09):
It just doesn't feel like that. So nothing in the
budget is going to surprise us or shock us. Oh well,
well disappointed.
Speaker 3 (20:17):
I think budgets always have things in them that people
weren't expecting, and our budget will have things in it
that are really consistent with the values and the priorities
that we've set out now for a couple of years.
Speaker 2 (20:30):
And will there be a lot of demands by your
coalition partners on that because they've got an election to
win as well. I mean, is it going to be
a true national budget or is it.
Speaker 3 (20:40):
Going to be a cover Well, i'll tell you what
the Minister of Foreign Affairs, the former Deputy Prime Minister
wantst In Peter's always the first thing he wants is
money for the Ministry of Foreign Affairs, so we'll have
that discussion over the next few weeks.
Speaker 2 (20:51):
Thank you for coming in, Enjoy your weekend. Appreciate you
taking the time out of your very Britsy schedule to
come on the show. We'll catch you when you've got
time again. Keep up the good work, keep striving.
Speaker 3 (21:03):
Hey, thank you so much, Nick, And can I just
join all the Welling Times who say thank you for
the Sporse Ghosts. It was an amazing institution and we'll
be sorry to see it go.
Speaker 2 (21:12):
Oh, thank you very much. Appreciate you.
Speaker 1 (21:15):
For more from Wellington Mornings with Nick Mills, listen live
to news Talks It'd Be Wellington from nine am weekdays,
or follow the podcast on iHeartRadio.
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