June 30, 2025 • 22 mins
Finance Minister Nicola Willis says New Zealand has not “escaped the aftershocks of world events” as new data shows hardship rising and more Kiwis struggling to pay the bills.
Speaking to Newstalk ZB Wellington Mornings host Nick Mills about the state of the economy, Willis acknowledged it had been “a tough time”.
“Things were starting to come along and then come April there were some reasonably significant announcements by the US President that sent ramifications through the world”, Willis said.
Donald Trump’s April “Liberation Day” announcement saw sweeping tariffs introduced for more than 125 countries, including 10% on imports coming from New Zealand.
Willis said business confidence has been impacted as a result and growth forecasts have been downgraded.
“Little old New Zealand, just recovering, has been really impacted by that.”
She said in spite of the global uncertainty growth is still forecast to improve, but “we haven’t escaped the aftershocks of global events”.
Credit reporting agency Centrix released its June Credit Indicator today. It showed household arrears were levelling out while hardship and company liquidations were on the rise.
Nearly 50,000 individual billpayers were in financial hardship, an increase of 300 from May, and 14% more than a year ago, Centrix said.
An uptick in hardship began in November 2022, and today’s figures “continues a steady upward trend”, Centrix managing director Keith McLaughlin said.
“I don’t deny those numbers, as you say, they’re facts and I meet enough New Zealanders each week to know there are still a lot of people doing it tough”, Willis said.
She said it comes at a time when New Zealand is at its “peak unemployment”.
“When unemployment is higher, of course that is when you see people unable to pay their bills”, Willis said.
On the increase in business liquidations, which Centrix recorded as being up 27% on last year’s figures, Willis said that there would be a variety of reasons for that and disputed the Government was responsible.
Asked by Mills if her government could have done more to assist struggling businesses, she said there were “certainly things we could have done which would have made it harder for them”.
Willis pointed to moves like tax cuts, cutting red tape, and the investment boost policy, which she said are benefiting small businesses.
Wellington’s ‘disappointing chapter’
Willis, a lifelong Wellingtonian, was asked about the state of the capital. She responded by criticising Wellington City Council for having had “its eye completely off the ball”.
“It feels to me like a place that needs a fresh start”, she said.
Willis believes the city still has “cool things” going for it like smart tenacious people, the native bush, and the city’s hospitality scene, but said “man oh man have we mucked up” with regard to council decision-making.
She said the council must be focused on keeping rates low.
It comes after the council approved a 12% rates increase for the 2025/2026 year.
“It seems to me that the council has not been focused on that mission and at the same time has been quite distracted
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:07):
You're listening to the Wellington Mornings podcast with Nick Mills
from News Talk said, b.
Speaker 2 (00:23):
The world was ending, I'd like to be next to you.
That's not really how i'd like to start. When Nikola
Wallis's finance minister.
Speaker 3 (00:32):
Welcome, well, I'd give my best attempt at saving you.
A good guy.
Speaker 2 (00:38):
Gosh, where my world was ending, I want to be
next to the finance minister. I think both the world
was ending. I don't even think you could fix that anyway.
Speaker 3 (00:47):
Welcome, Great to be on the show.
Speaker 2 (00:49):
Great to see you again. Great to have you on
the show. Last time we talked, we sat and had
a coffee and had a chat. You told me to
hold on, survived to twenty five. But now six months
into twenty twenty five, it's not quite where we want
to be, is it.
Speaker 1 (01:09):
No.
Speaker 3 (01:10):
I mean, it's been a tough time, hasn't it. It's
both We're an economy that has been recovering in terms
of coming back from that period of high inflation, really
interest rates and the strangle that that put on a
lot of economic activity. And just as we were getting
back onto our foils, as it were, in the first
(01:30):
few months of the year, and you saw that our
growth rate was twice what Treasury had been forecasting and
what people thought was possible. Things were starting to come along,
and then come April there were some reasonably significant announcements
by the US President that sent ramifications throughout the world.
Around the world, growth, our forecasts have been downgraded. There's
(01:52):
been considerable uncertainty, and little Old New Zealand just recovering
has been really impacted by that. And you've seen that
that's affected business's confidence about what the future looks like,
therefore their investment decisions. It's affected the way that therefore
people are feeling in their families and communities. So I'm
very conscious of it. Good news is we are still
(02:14):
forecast to keep growing this year and for that growth
to accelerate as we look ahead. So that's despite everything
the world's throwing at us. But there's no doubt we
haven't escaped the aftershocks of global events.
Speaker 2 (02:27):
From an outsider looking in, you seem to be throwing
absolutely everything at the world. You know, your Prime minister,
your foreign minister, anybody that wants to hop on a
plane's on a plane and promoting the hell out of
New Zealand. Is that part of the deal. Is that
trying to actually just get our tourism back and get
us back feeling good about ourselves.
Speaker 3 (02:48):
Absolutely. The simple fact is we will not get richer
selling to ourselves. For New Zealand to be the wealthier
country we all want it to be, so we can
pay people more like those in Australia, so that we
can have more investment in public services. We're going to
need this economy to have an export lead recovery. It
(03:08):
is going to be people selling their clever products their
services around the world that is going to make us wealthy.
And that's yes, it's our agricultural products, but it's also
our ability to bring tourists here, to bring international students here.
It's our ability to make sure that when a new
software company starts in New Zealand, it can sell at
services not just in the traditional trading markets, but across
(03:31):
the range of places. So we're out there forging free
trade agreements, encouraging people to come and invest in our businesses,
making sure that we're a country that will do well
in the world. And I think that's something we should
feel optimistic about in a world that's unstable. New Zealand
has lots of trading relationships. We're seen as a good
operator and that's good for businesses wanting to export.
Speaker 2 (03:51):
We have to stick to the facts too, though. In
the latest CENTRICX report this morning shows there's been a
fourteen percent jump on people struggling with paying their bills
compared to last year. You know, that doesn't tell me
that we are on their improved I know that we're
all we're all so optimistic, we're looking for that bright light.
But when we find out that fourteen percent more people
(04:14):
are struggling to pay their bills, that's not a good
feel well.
Speaker 3 (04:17):
Look, I saw those numbers, and it is a reality
of the fact that as an economy recovers, the last
thing that fixes itself is always unemployment. And we are
in this point what economists predicts peak unemployment in terms
of our economic recovery. So even prior to the election,
(04:38):
Treasury was forecasting that at this point unemployment would be
just a bit higher than it actually is now and
then it comes down. And so when unemployment is higher,
of course, that is when you see people unable to
pay their bills ending up in those credit numbers that
you're quoting today. So that is a factor the good
news is again the Reserve Bank, the Treasury, all the
(05:00):
economists are saying unemployment will come down from here. We
will see that there are more jobs being created two
hundred and forty thousand more jobs forecast to be created
over the next four years, and that will have an impact.
We're also seeing that more people now are fixing on
to lower interest rates. That helps with all of the
debt stress, whether it's the mortgage stress, whether it's the
credit card stress, whether it's the overdraft stress. When they
(05:23):
refix on a lower rate, that that really is helpful.
So I just don't deny those numbers as you say.
They're facts. And I meet enough New Zealanders each week
to know there are still a lot of people doing
it really tough, who've hung on, who've worked hard, they've
done all the rights.
Speaker 2 (05:40):
Do you get the feeling, because I mean, I want
to throw another one little quick figure in there, but
I mean, twenty six percent rise in company liquidations, I
mean that doesn't suggest to me that we're heading in
the right direction. I mean, that's a quarter more liquidations,
and we know that a lot of that's government have
made those decisions. Does that tell you when you're walking
(06:04):
the streets that it is feeling like it is on
the recovery.
Speaker 3 (06:07):
Look, I'm going to push back, it's not government that
has made those decisions. Those are companies that have liquidated
for There'll be a huge variety of reasons. Some of
them will have come through COVID but had big debt
that they're carrying and have been unable to do it
to pay it off. Others of them will be in
a situation where there just haven't been the customers through
(06:28):
the door. That's a real sign of an economy struggling
to get itself growing, and this has been our focus
as a government. We've said, actually, you can spend all
the money in the world, you can put band aids
on as many problems as you like, but if you
don't get the underlying growth engine of the economy working again,
then you won't see businesses surviving, let alone thriving. And
(06:50):
when businesses survive and thrive, could that's when jobs have
created and comes lived.
Speaker 2 (06:55):
Could you have done more to help those You know,
you're the first to admit that we're going through hard times.
You know you're being really honest about it, which I appreciate,
But do you think that your government could actually do
more to assist those small time businesses that have had
You know, you've labeled it perfectly. There's thousands of companies
(07:17):
out there that have struggled through COVID, struggled through the recession,
now debtloaded to hell o money everywhere in a struggling
like hell could you do more?
Speaker 1 (07:27):
Well?
Speaker 3 (07:27):
I think we've worked really hard to be on the
side of business, and there's certainly things we could have
done that would have made it harder for them. So
I look back on the approach that we've taken, which
was first of all, to say actually putting a bit
of cash into New Zealander's pocket and the form of
tax relief. It ain't going to solve all of the problems,
but I tell you what, without that cash, things would
(07:49):
have been worse. Making sure that we are getting rid
of some of the red tape and compliance that's been
in the way of business, that on the margin is
going to be helpful, and we've got more to come
on that. Things like the investment boost policy and the
budget which says, look, if you buy an asset for
your business, will allow you to deduct twenty percent of
the cost of that from your tax bill. That helps
with cash flow, that helps encourage you.
Speaker 2 (08:09):
Can you tell us how that's working. I mean, have
you had any indication of how that's working.
Speaker 3 (08:13):
Yeah, I've had tremendous feedback. So a lot of people
have said that actually their business has benefited from it,
because literally in that week after the budget, they had
customers come in and say, look, I'm going to buy
some diggers, I'm going to buy some utes, I'm going
to buy some new equipment because I now know that
I'm going to get this tax relief if I do.
Speaker 1 (08:31):
So.
Speaker 3 (08:32):
We've also had a number of businesses say to us, well,
I'm bringing forward my expansion plans. So I think the
catering company who were going to build a bigger kitchen,
they said, well, we're going to do it this year
instead of twenty twenty seven because we can now make
the cash flow work.
Speaker 2 (08:45):
And they've still got the confidence to do that. Yeah.
Speaker 3 (08:48):
Well, that's exactly the point, Nick, where you were thinking
about when we created the policy. Was one of the
big effects of all of this global uncertainty is that
it puts people off investing because they look out and
they go, what are the next few years going to look?
Like maybe I'll just retire to my little cave and
put my down and hope that things will get better.
(09:08):
And what we need for the economy to recover is
people investing, and so this policy is encouraging them, giving
them a bit of a nudge. And I think you'd
see a lot less investment if we hadn't introduced it.
Speaker 2 (09:19):
Okay, let's move into Wellington, because I mean, you're a Wellingtonian, proudly, proudly,
let's chat about it. How does Wellington feel to you
right now? I mean, you've got children, you've got a husband,
you've got a life in Wellington. How does it feel
to you right now?
Speaker 3 (09:35):
It feels to me like a place that needs a
fresh start. I think we've been through a bit of
a horrible time as a city, and there is still
great fundamentals for Wellington. It's still a place where people
are smart, they're tenacious. We've got the bush, we've got
the sea. We've got incredible industries, whether it's the film industry,
(09:57):
our hospitality industry. We've got Victoria University. We've got lots
of cool things. But man o, man, have we mucked
up in a number of ways over the last few years.
It's the classic you can have all of God given talent,
but if you don't convert it through wise decisions.
Speaker 2 (10:14):
How have we cocked it up?
Speaker 3 (10:16):
Frankly, I think the council's had its eye completely off
the ball. The number of Wellingtonians have said to me, actually,
we need some basics focused on. We need the pipes fixed,
We need to have a council that's focused on keeping
the rates low because actually that has an impact not
only on every Wellington household who have less money to
(10:36):
spend in our economy by the way, if they're paying
very high rates, but it has a real impact on
local businesses too, who pay proportionately some of the highest
rates in the country for their commercial premises. And it
seems to me that the council has not been focused
on that mission and at the same time has been
quite distracted by what I would say interesting political debates.
(10:59):
But frankly, political debates that haven't brought the city forward
have often driven the city into divisions.
Speaker 2 (11:06):
And you know, anything, chapter, is there anything that you
are looking at right now? You know, we're only four
months away from an election, so anything that you look
at it and say that would be really good for
Wellington if that person gets in it. And I don't
want you to suggest anybody, but is there anything that
excites you in the pipeline coming forward?
Speaker 3 (11:26):
Well, there's two things that I'll be looking for in candidates,
And as you say, I never endorse anyone, and I
can see good personal qualities and just about everyone who
runs for office, and good on them for doing so.
But the first is, as I say, there is a
real challenge for Wellington that rate pays can't take much more.
That's my observation. I met a lot of people on
fixed and lower incomes so are just saying I honestly
(11:47):
can't pay these ever increasing rates. So I'm looking for
leadership that takes that issue really seriously, and that means
actually being prepared to stop doing some things. We've had
to do that as a government. But if you don't
do that, actually you're punishing Wellingtonians. The second thing I'm
looking for is policies that are genuinely business and that
(12:07):
understand if Wellington's going to do well in future, this
has to be a good place to set up enterprise,
to hire people, to expand and grow, and so things
like are you going to dig up all of Lampton
Key and Courtney Place. Right when people are trying to
get through an economic recovery, that stuff matters, and so
that's what I'm looking for across the policy platforms. Are
(12:29):
you genuinely going to keep before.
Speaker 2 (12:32):
Or against gold Well?
Speaker 3 (12:35):
I don't think that it's the right time to be
doing it. I understand the vision, but I tell you what,
I also talk to those business people whose premises will
be affected. This is the last thing they need right now,
and frankly, as I say, a lot of those dollars
might be better on the pipes or reducing the rate bill.
Speaker 2 (12:55):
We've been lucky enough to have Nikola Willis, Finance Minister,
to join us in the studio for half an hour
this morning. It's a half way your report card, half
yearly report card? What do we do? Have a Christmas
show and then a half yearly one. Here we go,
rates bills. I want to talk about rates. Another twelve
percent rates locked in for Wellington? Is this acceptable to you?
Speaker 3 (13:16):
Well? I don't think Wellingtonians can keep up with it.
Continuing to rise at that rate. It's too much for people.
They're already challenged with rates at this level, and if
they keep rising like this, I really do worry, which
is why the council needs to focus on the basics.
And of course there's a double whammy for many Wellington
homeowners because the same time as they're facing a bigger
rates bill, many people have found that the value of
(13:39):
their property has also declined. So I know that that
weighs heavily on the minds of Wellingtonians And as I
said earlier, that's why I'm looking for counselors who are
pledging to be disciplined about the way they spend rate
per money.
Speaker 2 (13:51):
Is it about time that the government stepped in and
put some sort of I don't know cap on rates,
Like I mean, is it getting to that stage where
you know your parents you know my parents are those
are still alive, they wouldn't be able to live in
their family home.
Speaker 3 (14:06):
Yeah, and that is absolutely The Government's view is that
we do have a role to play and so we
will shortly be introducing legislation to put some breaks on
how much local councils take on in their kind of
worldview of what their job is. So the first thing
is to get them focused on their core business. As
(14:28):
Chris Luckson said last year at the Local Government conference,
which they all didn't like very much. Do the basics, well,
focus on the basics, don't do all of this other stuff.
Focus on the basics. And so we are going to
actually make sure that the law constrains them in that regard.
Speaker 2 (14:42):
To how far away is that? How far away do
we have to keep wondering until the government says okay,
enough enough.
Speaker 3 (14:49):
We'll be introducing that very soon. But then the second
piece is around rates, and we are exploring what are
the options here for making sure that councils when they're
doing rate increases, are making sure that it's actually for
the core infrastructure and the development that we want to see,
but that they're also making use of the other funding
and financing tools that are available to them. So we've
(15:11):
done quite a lot of work as a government on
new ways of making sure that you can use development levees,
you can use infrastructure funding and financing, you can do
different things as accountcil to fund your big projects. And
we want to see those tools being used, not just
going to the easy option, which is hiking the rates.
Speaker 2 (15:27):
Right and commercial rates in Wellington. I mean, obviously you're
dealing with business people. They'll be telling you that you know,
it's twenty percent Dara for the same value in christ Church, Sure,
the same value in Auckland. We're paying twenty percent more
commercial rates in Wellington. Why and why do we let
that happen?
Speaker 3 (15:44):
Yeah? And it matters right because on the margin, when
businesses are looking at where do it where shall I
operate and does it stack up? That's just another cost
line which might put them off. And I've actually spoken
with quite a few people have said, well, that's why
I moved out to Puttudur, or that's why I moved
out to the Hut because of the rates. And so
if Wellington wants to have a vibrant bus district, we
(16:07):
do need to worry about that. Now. I accept Wellington's
got lots of things to fund, but I think that's
why it irks people when we see the council distracted
by all sorts of things that they're spending your money on,
because we know that they should be focused on keeping
the rates under control and doing the basics well supermarkets.
Speaker 2 (16:25):
Last week you wrote to the supermarkets about misleading pricing.
Came after two supermarkets. What did you actually say to
these supermarkets and our supermarkets is sort of an easy
target at the moment.
Speaker 3 (16:36):
Well, I'm really glad I did that because I'll tell
you what provoked me, which is that there were a
couple of big pack and saves in Auckland who pled
guilty to multiple charges of misleading pricing and misleading promotions.
And the Commerce Commission haven't done many prosecutions in their time.
It's pretty hard to do those prosecutions for misleading pricing
(17:00):
and misleading promotions. But they've decided that the problem has
been widespread enough, with sixty percent of New Zealand shoppers
complaining that they've had a misleading price situation at the supermarket,
that they actually need to do some prosecutions to make
sure that the supermarkets take these issues seriously and change
their ways. And the reason I'm glad that I brought
attention to this as I think if I hadn't done that,
(17:23):
that misbehavior would have just flown under the radar. And actually,
we have a law in this country, the Fair Trading Act.
Every retailer needs to comply with it. Supermarkets are some
of the most sophisticated businesses in the country. They need
good electronic systems, good staff training, really clearly advertised refund policies,
and it should be the case that actually they have
(17:44):
done that already. But I've written to them and said,
we'll spell out to me how you're doing it. I
can report to you I have had one of the
supermarket chains right back already, and I expect that replies
will be forthcoming. Because sunlight is a good disinfectant link.
When we draw attention to these issues, we actually see change.
Speaker 2 (18:01):
Okay, I want to ask you about the fairies too,
because we've had our own private discussion about what's gone
on with the fairies. Winston Peter's sort of opened the
door a little bit and said that we'd look at
private enterprise and we'd look at public private stuff, and
then he's closed the door as quickly as he opened it.
What's your view on it? Do you reckon that we
could actually do a better system than we've got right
(18:23):
now with Kiwi Rail?
Speaker 3 (18:24):
Well, I think we've set this up in a really
smart way, which is rather than just saying Kiwi Rail, who,
let's be honest, of pretty patchy history when it comes
to fairy procurement. They were the ones right behind Direx
rather than saying key we Rail, you're in charge of this.
We've set up special structure, Fairy Holdings, which has some
really great people on its board, and we've said this
(18:46):
is the entity responsible and focused on two things. One
getting the port infrastructure delivered in a timely and affordable
manner that we need to receive these new fairies, and
two procuring the fairies internationally at the right price and
getting them here on time, so no other distractions, like
kie We Rail has, just focus on that. The other
flexibility with that structure is that in the future that
(19:08):
gives you some options. So we presume that Kiwi Rail
will operate the fairies. That's the working assumption. You provide flexibility.
Speaker 2 (19:16):
Is your mind open to doing something differently with that?
Speaker 3 (19:18):
Well, look, I'm just conscious that this isn't an issue
until twenty twenty nine. That's when the fairies arrive. So
I think it's always good to give yourself flexibility when
things are several years away and to do what's best
for the people who use the fairies and the New
Zealand text path.
Speaker 2 (19:36):
Would you look at it like an a New Zealand style.
I mean, I've said we've been doing it this morning
on the show and I said why can't we look
at any New Zealand style. I mean, it's working successfully.
Why couldn't you do something like that?
Speaker 3 (19:46):
Well, look, those are options that could be considered in future,
because we've set up the structure from the beginning that
gives you that flexibility. Anything, of course, would have to
be proven against. As I said those two criteria. Would
that deliver really well for everyone who relies on the
fairies to get their freight or family across the cook straight?
And would that deliver good value for the New Zealand
tax payer?
Speaker 2 (20:07):
Okay, now I really want to ask you this really quickly.
Working from home. I mean we've talked about their economy
and Wellington and we've talked about it. We as a
city are affected more by this than anyone else. Is
there going to be any changes? There's slight rumors that
you're going to come down and say government departments are
going to have to or work back at their office.
I know that you've started talking about it. Is there
(20:30):
more in the pipeline with us?
Speaker 3 (20:32):
Well, look, when we came to government, we realized that
post COVID there'd been a real change in how much
working from home was happening, and some of that's been
good because there are good reasons for people to have flexibility,
but we were quite surprised that there weren't really very
clear policies about what the expectations were in some public
agencies in terms of when people would work from home
(20:53):
and when they wouldn't. And I'm old fashioned apparently, but
I think actually there's quite a lot of value in
seeing your workmates, particularly when you manage them or are
being managed by them, And there's quite a lot of
value in the social interaction that happen between different workers
in the workplace, and we want to encourage that. So
we've reissued the working from Home Guidelines and we've asked
(21:14):
every government agency to have very clear policies.
Speaker 2 (21:16):
More coming staff. Are you getting to the stage where
you're going to be a little bit firm.
Speaker 3 (21:21):
Well, what we've had is individual agencies reviewing their policies
one at a time and updating them so you'll continue
to see that. I of course have heard from those
businesses in Wellington who say, you know, we'd like people
coming into the city a bit more. Equally, I've had
local cafes in the suburbs saying we quite like it.
The people are working from home. So I accept that
(21:41):
there are two sides to the issue. But look, I
think we all like it when named and Key's busy,
when Courtney Place is busy, when the cafes have people
lining up to buy food. We all like that, and
I like it when it's buzzy and Wellington too.
Speaker 2 (21:55):
Great to have you, and thank you for taking the time.
I really appreciate and I know that our Wellington listeners
appreciate having you on the show. Whenever you can make
yourself available. It's really good. Keep up the good work.
Speaker 3 (22:08):
Keep sorry to be on the show. Let's try and
make it less than six months between dates next time.
Speaker 2 (22:12):
Okay, great to see you, Thank you very much. Finance
Minister Nichola willis there on Wellington Mornings.
Speaker 1 (22:19):
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.
Speaker 2 (00:23):
The world was ending, I'd like to be next to you.
That's not really how i'd like to start. When Nikola
Wallis's finance minister.
Speaker 3 (00:32):
Welcome, well, I'd give my best attempt at saving you.
A good guy.
Speaker 2 (00:38):
Gosh, where my world was ending, I want to be
next to the finance minister. I think both the world
was ending. I don't even think you could fix that anyway.
Speaker 3 (00:47):
Welcome, Great to be on the show.
Speaker 2 (00:49):
Great to see you again. Great to have you on
the show. Last time we talked, we sat and had
a coffee and had a chat. You told me to
hold on, survived to twenty five. But now six months
into twenty twenty five, it's not quite where we want
to be, is it.
Speaker 1 (01:09):
No.
Speaker 3 (01:10):
I mean, it's been a tough time, hasn't it. It's
both We're an economy that has been recovering in terms
of coming back from that period of high inflation, really
interest rates and the strangle that that put on a
lot of economic activity. And just as we were getting
back onto our foils, as it were, in the first
(01:30):
few months of the year, and you saw that our
growth rate was twice what Treasury had been forecasting and
what people thought was possible. Things were starting to come along,
and then come April there were some reasonably significant announcements
by the US President that sent ramifications throughout the world.
Around the world, growth, our forecasts have been downgraded. There's
(01:52):
been considerable uncertainty, and little Old New Zealand just recovering
has been really impacted by that. And you've seen that
that's affected business's confidence about what the future looks like,
therefore their investment decisions. It's affected the way that therefore
people are feeling in their families and communities. So I'm
very conscious of it. Good news is we are still
(02:14):
forecast to keep growing this year and for that growth
to accelerate as we look ahead. So that's despite everything
the world's throwing at us. But there's no doubt we
haven't escaped the aftershocks of global events.
Speaker 2 (02:27):
From an outsider looking in, you seem to be throwing
absolutely everything at the world. You know, your Prime minister,
your foreign minister, anybody that wants to hop on a
plane's on a plane and promoting the hell out of
New Zealand. Is that part of the deal. Is that
trying to actually just get our tourism back and get
us back feeling good about ourselves.
Speaker 3 (02:48):
Absolutely. The simple fact is we will not get richer
selling to ourselves. For New Zealand to be the wealthier
country we all want it to be, so we can
pay people more like those in Australia, so that we
can have more investment in public services. We're going to
need this economy to have an export lead recovery. It
(03:08):
is going to be people selling their clever products their
services around the world that is going to make us wealthy.
And that's yes, it's our agricultural products, but it's also
our ability to bring tourists here, to bring international students here.
It's our ability to make sure that when a new
software company starts in New Zealand, it can sell at
services not just in the traditional trading markets, but across
(03:31):
the range of places. So we're out there forging free
trade agreements, encouraging people to come and invest in our businesses,
making sure that we're a country that will do well
in the world. And I think that's something we should
feel optimistic about in a world that's unstable. New Zealand
has lots of trading relationships. We're seen as a good
operator and that's good for businesses wanting to export.
Speaker 2 (03:51):
We have to stick to the facts too, though. In
the latest CENTRICX report this morning shows there's been a
fourteen percent jump on people struggling with paying their bills
compared to last year. You know, that doesn't tell me
that we are on their improved I know that we're
all we're all so optimistic, we're looking for that bright light.
But when we find out that fourteen percent more people
(04:14):
are struggling to pay their bills, that's not a good
feel well.
Speaker 3 (04:17):
Look, I saw those numbers, and it is a reality
of the fact that as an economy recovers, the last
thing that fixes itself is always unemployment. And we are
in this point what economists predicts peak unemployment in terms
of our economic recovery. So even prior to the election,
(04:38):
Treasury was forecasting that at this point unemployment would be
just a bit higher than it actually is now and
then it comes down. And so when unemployment is higher,
of course, that is when you see people unable to
pay their bills ending up in those credit numbers that
you're quoting today. So that is a factor the good
news is again the Reserve Bank, the Treasury, all the
(05:00):
economists are saying unemployment will come down from here. We
will see that there are more jobs being created two
hundred and forty thousand more jobs forecast to be created
over the next four years, and that will have an impact.
We're also seeing that more people now are fixing on
to lower interest rates. That helps with all of the
debt stress, whether it's the mortgage stress, whether it's the
credit card stress, whether it's the overdraft stress. When they
(05:23):
refix on a lower rate, that that really is helpful.
So I just don't deny those numbers as you say.
They're facts. And I meet enough New Zealanders each week
to know there are still a lot of people doing
it really tough, who've hung on, who've worked hard, they've
done all the rights.
Speaker 2 (05:40):
Do you get the feeling, because I mean, I want
to throw another one little quick figure in there, but
I mean, twenty six percent rise in company liquidations, I
mean that doesn't suggest to me that we're heading in
the right direction. I mean, that's a quarter more liquidations,
and we know that a lot of that's government have
made those decisions. Does that tell you when you're walking
(06:04):
the streets that it is feeling like it is on
the recovery.
Speaker 3 (06:07):
Look, I'm going to push back, it's not government that
has made those decisions. Those are companies that have liquidated
for There'll be a huge variety of reasons. Some of
them will have come through COVID but had big debt
that they're carrying and have been unable to do it
to pay it off. Others of them will be in
a situation where there just haven't been the customers through
(06:28):
the door. That's a real sign of an economy struggling
to get itself growing, and this has been our focus
as a government. We've said, actually, you can spend all
the money in the world, you can put band aids
on as many problems as you like, but if you
don't get the underlying growth engine of the economy working again,
then you won't see businesses surviving, let alone thriving. And
(06:50):
when businesses survive and thrive, could that's when jobs have
created and comes lived.
Speaker 2 (06:55):
Could you have done more to help those You know,
you're the first to admit that we're going through hard times.
You know you're being really honest about it, which I appreciate,
But do you think that your government could actually do
more to assist those small time businesses that have had
You know, you've labeled it perfectly. There's thousands of companies
(07:17):
out there that have struggled through COVID, struggled through the recession,
now debtloaded to hell o money everywhere in a struggling
like hell could you do more?
Speaker 1 (07:27):
Well?
Speaker 3 (07:27):
I think we've worked really hard to be on the
side of business, and there's certainly things we could have
done that would have made it harder for them. So
I look back on the approach that we've taken, which
was first of all, to say actually putting a bit
of cash into New Zealander's pocket and the form of
tax relief. It ain't going to solve all of the problems,
but I tell you what, without that cash, things would
(07:49):
have been worse. Making sure that we are getting rid
of some of the red tape and compliance that's been
in the way of business, that on the margin is
going to be helpful, and we've got more to come
on that. Things like the investment boost policy and the
budget which says, look, if you buy an asset for
your business, will allow you to deduct twenty percent of
the cost of that from your tax bill. That helps
with cash flow, that helps encourage you.
Speaker 2 (08:09):
Can you tell us how that's working. I mean, have
you had any indication of how that's working.
Speaker 3 (08:13):
Yeah, I've had tremendous feedback. So a lot of people
have said that actually their business has benefited from it,
because literally in that week after the budget, they had
customers come in and say, look, I'm going to buy
some diggers, I'm going to buy some utes, I'm going
to buy some new equipment because I now know that
I'm going to get this tax relief if I do.
Speaker 1 (08:31):
So.
Speaker 3 (08:32):
We've also had a number of businesses say to us, well,
I'm bringing forward my expansion plans. So I think the
catering company who were going to build a bigger kitchen,
they said, well, we're going to do it this year
instead of twenty twenty seven because we can now make
the cash flow work.
Speaker 2 (08:45):
And they've still got the confidence to do that. Yeah.
Speaker 3 (08:48):
Well, that's exactly the point, Nick, where you were thinking
about when we created the policy. Was one of the
big effects of all of this global uncertainty is that
it puts people off investing because they look out and
they go, what are the next few years going to look?
Like maybe I'll just retire to my little cave and
put my down and hope that things will get better.
(09:08):
And what we need for the economy to recover is
people investing, and so this policy is encouraging them, giving
them a bit of a nudge. And I think you'd
see a lot less investment if we hadn't introduced it.
Speaker 2 (09:19):
Okay, let's move into Wellington, because I mean, you're a Wellingtonian, proudly, proudly,
let's chat about it. How does Wellington feel to you
right now? I mean, you've got children, you've got a husband,
you've got a life in Wellington. How does it feel
to you right now?
Speaker 3 (09:35):
It feels to me like a place that needs a
fresh start. I think we've been through a bit of
a horrible time as a city, and there is still
great fundamentals for Wellington. It's still a place where people
are smart, they're tenacious. We've got the bush, we've got
the sea. We've got incredible industries, whether it's the film industry,
(09:57):
our hospitality industry. We've got Victoria University. We've got lots
of cool things. But man o, man, have we mucked
up in a number of ways over the last few years.
It's the classic you can have all of God given talent,
but if you don't convert it through wise decisions.
Speaker 2 (10:14):
How have we cocked it up?
Speaker 3 (10:16):
Frankly, I think the council's had its eye completely off
the ball. The number of Wellingtonians have said to me, actually,
we need some basics focused on. We need the pipes fixed,
We need to have a council that's focused on keeping
the rates low because actually that has an impact not
only on every Wellington household who have less money to
(10:36):
spend in our economy by the way, if they're paying
very high rates, but it has a real impact on
local businesses too, who pay proportionately some of the highest
rates in the country for their commercial premises. And it
seems to me that the council has not been focused
on that mission and at the same time has been
quite distracted by what I would say interesting political debates.
(10:59):
But frankly, political debates that haven't brought the city forward
have often driven the city into divisions.
Speaker 2 (11:06):
And you know, anything, chapter, is there anything that you
are looking at right now? You know, we're only four
months away from an election, so anything that you look
at it and say that would be really good for
Wellington if that person gets in it. And I don't
want you to suggest anybody, but is there anything that
excites you in the pipeline coming forward?
Speaker 3 (11:26):
Well, there's two things that I'll be looking for in candidates,
And as you say, I never endorse anyone, and I
can see good personal qualities and just about everyone who
runs for office, and good on them for doing so.
But the first is, as I say, there is a
real challenge for Wellington that rate pays can't take much more.
That's my observation. I met a lot of people on
fixed and lower incomes so are just saying I honestly
(11:47):
can't pay these ever increasing rates. So I'm looking for
leadership that takes that issue really seriously, and that means
actually being prepared to stop doing some things. We've had
to do that as a government. But if you don't
do that, actually you're punishing Wellingtonians. The second thing I'm
looking for is policies that are genuinely business and that
(12:07):
understand if Wellington's going to do well in future, this
has to be a good place to set up enterprise,
to hire people, to expand and grow, and so things
like are you going to dig up all of Lampton
Key and Courtney Place. Right when people are trying to
get through an economic recovery, that stuff matters, and so
that's what I'm looking for across the policy platforms. Are
(12:29):
you genuinely going to keep before.
Speaker 2 (12:32):
Or against gold Well?
Speaker 3 (12:35):
I don't think that it's the right time to be
doing it. I understand the vision, but I tell you what,
I also talk to those business people whose premises will
be affected. This is the last thing they need right now,
and frankly, as I say, a lot of those dollars
might be better on the pipes or reducing the rate bill.
Speaker 2 (12:55):
We've been lucky enough to have Nikola Willis, Finance Minister,
to join us in the studio for half an hour
this morning. It's a half way your report card, half
yearly report card? What do we do? Have a Christmas
show and then a half yearly one. Here we go,
rates bills. I want to talk about rates. Another twelve
percent rates locked in for Wellington? Is this acceptable to you?
Speaker 3 (13:16):
Well? I don't think Wellingtonians can keep up with it.
Continuing to rise at that rate. It's too much for people.
They're already challenged with rates at this level, and if
they keep rising like this, I really do worry, which
is why the council needs to focus on the basics.
And of course there's a double whammy for many Wellington
homeowners because the same time as they're facing a bigger
rates bill, many people have found that the value of
(13:39):
their property has also declined. So I know that that
weighs heavily on the minds of Wellingtonians And as I
said earlier, that's why I'm looking for counselors who are
pledging to be disciplined about the way they spend rate
per money.
Speaker 2 (13:51):
Is it about time that the government stepped in and
put some sort of I don't know cap on rates,
Like I mean, is it getting to that stage where
you know your parents you know my parents are those
are still alive, they wouldn't be able to live in
their family home.
Speaker 3 (14:06):
Yeah, and that is absolutely The Government's view is that
we do have a role to play and so we
will shortly be introducing legislation to put some breaks on
how much local councils take on in their kind of
worldview of what their job is. So the first thing
is to get them focused on their core business. As
(14:28):
Chris Luckson said last year at the Local Government conference,
which they all didn't like very much. Do the basics, well,
focus on the basics, don't do all of this other stuff.
Focus on the basics. And so we are going to
actually make sure that the law constrains them in that regard.
Speaker 2 (14:42):
To how far away is that? How far away do
we have to keep wondering until the government says okay,
enough enough.
Speaker 3 (14:49):
We'll be introducing that very soon. But then the second
piece is around rates, and we are exploring what are
the options here for making sure that councils when they're
doing rate increases, are making sure that it's actually for
the core infrastructure and the development that we want to see,
but that they're also making use of the other funding
and financing tools that are available to them. So we've
(15:11):
done quite a lot of work as a government on
new ways of making sure that you can use development levees,
you can use infrastructure funding and financing, you can do
different things as accountcil to fund your big projects. And
we want to see those tools being used, not just
going to the easy option, which is hiking the rates.
Speaker 2 (15:27):
Right and commercial rates in Wellington. I mean, obviously you're
dealing with business people. They'll be telling you that you know,
it's twenty percent Dara for the same value in christ Church, Sure,
the same value in Auckland. We're paying twenty percent more
commercial rates in Wellington. Why and why do we let
that happen?
Speaker 3 (15:44):
Yeah? And it matters right because on the margin, when
businesses are looking at where do it where shall I
operate and does it stack up? That's just another cost
line which might put them off. And I've actually spoken
with quite a few people have said, well, that's why
I moved out to Puttudur, or that's why I moved
out to the Hut because of the rates. And so
if Wellington wants to have a vibrant bus district, we
(16:07):
do need to worry about that. Now. I accept Wellington's
got lots of things to fund, but I think that's
why it irks people when we see the council distracted
by all sorts of things that they're spending your money on,
because we know that they should be focused on keeping
the rates under control and doing the basics well supermarkets.
Speaker 2 (16:25):
Last week you wrote to the supermarkets about misleading pricing.
Came after two supermarkets. What did you actually say to
these supermarkets and our supermarkets is sort of an easy
target at the moment.
Speaker 3 (16:36):
Well, I'm really glad I did that because I'll tell
you what provoked me, which is that there were a
couple of big pack and saves in Auckland who pled
guilty to multiple charges of misleading pricing and misleading promotions.
And the Commerce Commission haven't done many prosecutions in their time.
It's pretty hard to do those prosecutions for misleading pricing
(17:00):
and misleading promotions. But they've decided that the problem has
been widespread enough, with sixty percent of New Zealand shoppers
complaining that they've had a misleading price situation at the supermarket,
that they actually need to do some prosecutions to make
sure that the supermarkets take these issues seriously and change
their ways. And the reason I'm glad that I brought
attention to this as I think if I hadn't done that,
(17:23):
that misbehavior would have just flown under the radar. And actually,
we have a law in this country, the Fair Trading Act.
Every retailer needs to comply with it. Supermarkets are some
of the most sophisticated businesses in the country. They need
good electronic systems, good staff training, really clearly advertised refund policies,
and it should be the case that actually they have
(17:44):
done that already. But I've written to them and said,
we'll spell out to me how you're doing it. I
can report to you I have had one of the
supermarket chains right back already, and I expect that replies
will be forthcoming. Because sunlight is a good disinfectant link.
When we draw attention to these issues, we actually see change.
Speaker 2 (18:01):
Okay, I want to ask you about the fairies too,
because we've had our own private discussion about what's gone
on with the fairies. Winston Peter's sort of opened the
door a little bit and said that we'd look at
private enterprise and we'd look at public private stuff, and
then he's closed the door as quickly as he opened it.
What's your view on it? Do you reckon that we
could actually do a better system than we've got right
(18:23):
now with Kiwi Rail?
Speaker 3 (18:24):
Well, I think we've set this up in a really
smart way, which is rather than just saying Kiwi Rail, who,
let's be honest, of pretty patchy history when it comes
to fairy procurement. They were the ones right behind Direx
rather than saying key we Rail, you're in charge of this.
We've set up special structure, Fairy Holdings, which has some
really great people on its board, and we've said this
(18:46):
is the entity responsible and focused on two things. One
getting the port infrastructure delivered in a timely and affordable
manner that we need to receive these new fairies, and
two procuring the fairies internationally at the right price and
getting them here on time, so no other distractions, like
kie We Rail has, just focus on that. The other
flexibility with that structure is that in the future that
(19:08):
gives you some options. So we presume that Kiwi Rail
will operate the fairies. That's the working assumption. You provide flexibility.
Speaker 2 (19:16):
Is your mind open to doing something differently with that?
Speaker 3 (19:18):
Well, look, I'm just conscious that this isn't an issue
until twenty twenty nine. That's when the fairies arrive. So
I think it's always good to give yourself flexibility when
things are several years away and to do what's best
for the people who use the fairies and the New
Zealand text path.
Speaker 2 (19:36):
Would you look at it like an a New Zealand style.
I mean, I've said we've been doing it this morning
on the show and I said why can't we look
at any New Zealand style. I mean, it's working successfully.
Why couldn't you do something like that?
Speaker 3 (19:46):
Well, look, those are options that could be considered in future,
because we've set up the structure from the beginning that
gives you that flexibility. Anything, of course, would have to
be proven against. As I said those two criteria. Would
that deliver really well for everyone who relies on the
fairies to get their freight or family across the cook straight?
And would that deliver good value for the New Zealand
tax payer?
Speaker 2 (20:07):
Okay, now I really want to ask you this really quickly.
Working from home. I mean we've talked about their economy
and Wellington and we've talked about it. We as a
city are affected more by this than anyone else. Is
there going to be any changes? There's slight rumors that
you're going to come down and say government departments are
going to have to or work back at their office.
I know that you've started talking about it. Is there
(20:30):
more in the pipeline with us?
Speaker 3 (20:32):
Well, look, when we came to government, we realized that
post COVID there'd been a real change in how much
working from home was happening, and some of that's been
good because there are good reasons for people to have flexibility,
but we were quite surprised that there weren't really very
clear policies about what the expectations were in some public
agencies in terms of when people would work from home
(20:53):
and when they wouldn't. And I'm old fashioned apparently, but
I think actually there's quite a lot of value in
seeing your workmates, particularly when you manage them or are
being managed by them, And there's quite a lot of
value in the social interaction that happen between different workers
in the workplace, and we want to encourage that. So
we've reissued the working from Home Guidelines and we've asked
(21:14):
every government agency to have very clear policies.
Speaker 2 (21:16):
More coming staff. Are you getting to the stage where
you're going to be a little bit firm.
Speaker 3 (21:21):
Well, what we've had is individual agencies reviewing their policies
one at a time and updating them so you'll continue
to see that. I of course have heard from those
businesses in Wellington who say, you know, we'd like people
coming into the city a bit more. Equally, I've had
local cafes in the suburbs saying we quite like it.
The people are working from home. So I accept that
(21:41):
there are two sides to the issue. But look, I
think we all like it when named and Key's busy,
when Courtney Place is busy, when the cafes have people
lining up to buy food. We all like that, and
I like it when it's buzzy and Wellington too.
Speaker 2 (21:55):
Great to have you, and thank you for taking the time.
I really appreciate and I know that our Wellington listeners
appreciate having you on the show. Whenever you can make
yourself available. It's really good. Keep up the good work.
Speaker 3 (22:08):
Keep sorry to be on the show. Let's try and
make it less than six months between dates next time.
Speaker 2 (22:12):
Okay, great to see you, Thank you very much. Finance
Minister Nichola willis there on Wellington Mornings.
Speaker 1 (22:19):
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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