December 19, 2024 • 17 mins
It’s been a big year for Finance Minister Nicola Willis.
She delivered her first budget which included her promised tax relief package, she laid off thousands of public servants and she’s facing deteriorating books, all in the midst of a technical recession.
So how would she rate her performance over the year, and what’s in store for 2025?
Willis joined Nick Mills for the final show of the year, live from Prefab Cafe in the city.
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Speaker 1 (00:07):
You're listening to the Wellington Mornings podcast with Nick Mills
from News Talk said b.
Speaker 2 (00:12):
Joining us now for the final time this year is
Proud welling TONI and Finance Minister Nikola Willis. Good morning, Nicholin.
Lovely you for you to take time out. I know
you've had a hectic time, so welcome to the show.
Speaker 3 (00:23):
Good morning. Great to be on the show with you, Nick,
and great to be at Prefab.
Speaker 4 (00:26):
Yeah, isn't it. I know that this is one of
your spots.
Speaker 2 (00:28):
So without dampening the festive mood, we have to start
talking about the GDP.
Speaker 4 (00:34):
Figures of yesterday.
Speaker 2 (00:35):
They dropped one percent to September quarter, our deepest and
now our deepest recession since nineteen ninety one excluding COVID.
Tell us how that made you feel when you first
heard that hu yesterday.
Speaker 5 (00:46):
Well, it made me feel like all of that pain
that New Zealanders have been experiencing over the past year
has been reflected in the numbers. You know, There's been
no doubt about it. We've inherited some very tough economic
conditions and you've seen that.
Speaker 3 (00:59):
In the community. We've seen businesses.
Speaker 5 (01:02):
Struggling, we've seen people really experiencing that protracted period of
first time inflation and then really high interest rates had a.
Speaker 3 (01:10):
Real dampener on the economy.
Speaker 5 (01:11):
The Reserve Bank essentially engineered a recession.
Speaker 3 (01:15):
We've now had it.
Speaker 5 (01:16):
But the good news is and the bit that I
really want people to focus on going into Christmas as
we're through the worst of it. Infrastrates in our court,
inflation's under control it and by consensus, economists are saying
next year we will have sustained growth and that's going
to feel a lot better after what have been a
tough few years.
Speaker 4 (01:32):
Can I ask you a personal question.
Speaker 2 (01:35):
If I was a business person that had four years
like we've had, employed a lot of people and struggled
like how to keep going, would you keep going or
would you give up?
Speaker 3 (01:47):
I'd keep going.
Speaker 5 (01:48):
I know that if you've managed to keep your business
going through these past few years, you are tough, you
are resilient, You have what it takes.
Speaker 3 (01:56):
In New Zealand is still the best country on earth.
Speaker 5 (01:59):
We have some really good times ahead of us. We
know that with lower interest rates, families will have more
money to spend. It'll be easier to borrow for the
next project because it will be cheaper.
Speaker 3 (02:10):
And we know that you've got a government that's on
your side.
Speaker 5 (02:12):
We are working at pace to get rid of some
of the red tape and complexity that's made it hard
to do business.
Speaker 3 (02:18):
We're getting on with building.
Speaker 5 (02:19):
Infrastructure, improving the skills that school leavers have, working on
the science and innovation system, encouraging investments.
Speaker 3 (02:26):
So we're with you. We beck you just keep going.
Speaker 2 (02:30):
Now we've heard with the recession figures again, though, doesn't
that sort of like it feels like you get up
one rung on a ladder and then you slip back down,
you know, so you're not in your head so you
agree with me.
Speaker 4 (02:41):
It just feels so damn hard for us.
Speaker 3 (02:43):
Yeah, look, it's tough reading those numbers. But remember their retrospective.
Speaker 5 (02:47):
They describe history what's already happened, not what's going to happen.
Speaker 2 (02:52):
And I think that better right now, do you reckon
if we actually went out? I mean, look at this place.
It's a buzz. It feels excited. People are It's been
like that all morning and it's not because we're here.
Speaker 4 (03:00):
It's like that.
Speaker 3 (03:01):
Because I think it's because they want to see Nick Mils.
Speaker 1 (03:03):
Don't.
Speaker 2 (03:03):
No, not at all but you know what I'm saying.
You know, you go into little pockets and things are good. Yeah,
but there's a lot of pockets that are really struggling.
Speaker 5 (03:11):
Yeah. Look, it is a mixed picture across the economy.
You know, I was in Eltham a couple of weeks
ago and for dairy price at ten dollars, they're feeling
pretty great in that community because that money is starting
to flow through into services and businesses.
Speaker 3 (03:23):
So it is a mixed picture.
Speaker 5 (03:25):
But what we know is that overall growth is set
to revive next year and after several years are bouncing.
Speaker 3 (03:31):
Along the bottom. That will feel quite different from many people.
Speaker 5 (03:34):
You know, these things take time to fix, and we're
fixing them.
Speaker 2 (03:38):
You know what worries me a little bit, and I
want your view on it, is do you actually have
the confidence in the Reserve Bank?
Speaker 4 (03:43):
And Adrian Ora?
Speaker 2 (03:44):
I mean, you know, there's been obvious the states made
to get us to where we are now, some of
them enforced on them and I have no question about that,
But do you still have the confidence in it?
Speaker 5 (03:54):
Well, I've been open in my criticism both in opposition
and when we came into government that, in my view,
the Reserve Bank overdid it during COVID. They did too
much quantitative easing to too much money, kept interest rates
too low for too long. The funding blending program pumped
too much cash into the economy, which contributed to sky
(04:15):
high inflation that has left massive scars on New Zealanders
and led to interest rates having to climb as high
as they did. So I think mistakes were made. It's
very important to me that we maintain confidence in our
monetary institution, in the Reserve Bank, and that it remain
independent in its monetary policy decision making.
Speaker 3 (04:36):
So we have been refreshing the lawheads.
Speaker 2 (04:39):
What if your lagerheads, you've got a plan and we
all agree, and we've all brought into your plan. You're
the finance minister and the Reserve Bank governor is doing
something a little bit different and not making it as
easy as he should for you, which is.
Speaker 4 (04:52):
How a layman like myself perceives it.
Speaker 3 (04:54):
Well, there's a couple of things that we can do there.
The first is that we have.
Speaker 5 (04:57):
Control over the membership of the Board of the Reserve Bank,
and we've been working to refresh that. The second thing
is that I, by statute am able to set my
expectations to the bank.
Speaker 3 (05:07):
So you will have.
Speaker 5 (05:07):
Seen either shared what's called a new Financial Policy Remit,
which sets out my expectations.
Speaker 1 (05:13):
Of the bank.
Speaker 3 (05:13):
I'm really big on banking.
Speaker 5 (05:15):
Competition, so I've said, look, I want you to get
rid of some of the regulatory mote that's made it
very hard for new services to enter the banking sector,
and i want you to get on.
Speaker 3 (05:23):
With that work and do it fast.
Speaker 5 (05:25):
We also, as soon as we came into government, said look,
we want the Reserve Bank focused on the most important job.
Speaker 3 (05:30):
Right now, which is reducing inflator and we did that
through statute.
Speaker 5 (05:34):
So ultimately the democratically elected representatives of the Parliament determine
what the Reserve Bank's focus is.
Speaker 2 (05:41):
Okay, if we go to the Reserve Bank, to the
ordinary banks. Chris Bisson was on the show yesterday and
me and him talked about why don't someone or government
put force put some more pressure on the major banks
to be a bit more helpful to business.
Speaker 5 (05:58):
Oh, look, we are putting pressure on the banks, and
we're doing it in three ways. First, in terms of
those crudential policy work at the Reserve Bank, I've asked
them to look at what they can do to support
lending going into the productive parts of the economy, and
to review something complex called capital risk waitings, which is
basically about how much capital banks need to hold to lend.
Speaker 3 (06:18):
To certain industries.
Speaker 5 (06:20):
But I've also seen to the banks themselves look in
an environment where the Commerce Commission has concluded that you
are not competitive, that we have a two tier oligothily,
that you're way more profitable than banks around the world.
You need to shaften up, and we've put them on notice.
We've said these obvious things that you can do to
demonstrate to New Zealanders that you're on their side, that
(06:40):
you're going to offer better, more affordable banking services.
Speaker 3 (06:43):
Get on and do it, because if you don't, then
the government will use our power to regulate.
Speaker 2 (06:48):
Does the government still believe that small to medium sized businesses, what.
Speaker 3 (06:54):
Is the crutch of New Zealand blinding in of our economy.
Speaker 4 (06:57):
Do they still believe in them?
Speaker 5 (06:59):
Absolutely, Small and medium businesses are where it all starts.
There's no such thing as a big business that didn't
start with a small idea from a brave person who
was prepared to put their money on the line to
pursue an idea, who saw a problem that they thought
could be solved, a service that they thought they could run,
a cafe they thought they could open, and said, you
(07:19):
know what, I'm going to put my hours into it.
I'm going to risk putting people onto the payroll. I'm
going to give it everything because I reckon this idea
has legs. We need more people like that. We need
to make it easier for them. We need to encourage
those risk takers because that's actually where jobs come from, right,
That's where incomes come from. So we are absolutely on
the side of smaller medium businesses.
Speaker 2 (07:39):
Has anyone done the figures, and this is one off
the bat, so Jo, I'm not expecting you to know,
But what percentage of bank loans to businesses don't have
family homers that has the ricks and mortar.
Speaker 3 (07:51):
That's a great question.
Speaker 5 (07:52):
I think that you'd find that most lending to small
and medium businesses uses the family home is collateral.
Speaker 3 (07:58):
And that just shows you how much skin people have
in the game.
Speaker 5 (08:00):
You know, I get frustrated when there's sometimes a conflict
set out between business versus the people, is that businesses
are somehow not on the side of the people, and
my experience it's small and medium businesses who care so
much about their staff that often they'll forego their own
income to keep paying their staff, who are literally putting
their family home at risk so that they.
Speaker 3 (08:22):
Can keep people employed. And I think we should all
remember that at Christmas time.
Speaker 4 (08:25):
Yeah, great, great, way, let's move on. Let's start talking
about your year.
Speaker 2 (08:30):
Your first year twenty twenty four was your first full
year in the job. I mean, how do you feel.
I mean, you look great. You look very relaxed, and
you look great. I mean, for Deceb between tath, you
look amazing. So it hasn't taken too much of a tolerance.
Speaker 3 (08:47):
I thank you.
Speaker 5 (08:48):
Look, it's been the biggest year of my career. Unquestionably,
there have been times where I felt so exhausted that
I'd compare it to the weeks when I have three
children under three, because the job is relentless. But I
have loved it, the opportunity to represent New Zealanders and
get on with the job we're elected to do. There
(09:08):
isn't a day I don't wake up and think, oh
my gosh, I get to do it again.
Speaker 3 (09:12):
And I am is.
Speaker 2 (09:13):
There a day where you think back? I mean, you
were a rising star in Fonterira. I've spoke with several
people saying that you would have stayed with them. Been
managing director of fon Terra, probably a bigger job than
Prime minister really financially and everything that goes with it.
Has there ever been a day where you said, gosh,
why did I leave Fonterira.
Speaker 3 (09:31):
Oh?
Speaker 5 (09:31):
Look, I still love the work that Fonterra does and
I loved my years there. But the heart wants what
the heart wants, and I had a real call to
democratic service. I really felt that I could make a
difference to the country in government that would go broader
than what I was able to.
Speaker 3 (09:49):
Achieve at Fonterra.
Speaker 5 (09:50):
And I have been so fortunate that those opportunities have
been afforded to me, and I find myself in a
position where I feel like, if I do my job
really well and well alongside my colleagues, then we'll make
this country a better place.
Speaker 4 (10:02):
What's been the biggest challenge?
Speaker 2 (10:03):
What's the one day that you went home and you
had your shower, you hopped them to bed and.
Speaker 4 (10:11):
You thought, oh my god, how am I going to
fix that? What am I going to do? We all
have them done. We already have those days.
Speaker 3 (10:18):
Yeah, Yeah, we do have those days.
Speaker 5 (10:20):
Like I think when we first came into government and
I got hit by the initial briefings from.
Speaker 3 (10:25):
The Treasury where they told me we were actually in.
Speaker 5 (10:28):
A structural deficit, Where they laid out to me a
series of fiscal cliffs and fiscal risks that we hadn't
been apparent to us before we were elected, Where they
showed me just how difficult it was going to be
to deliver our first budget on the terms in which
we wanted to do it. I saw the size of
the task ahead of me as a massive but I
(10:49):
also will never forget that following that feeling, we knuckled
down and we did it. You know, we did deliver
those that tax relief that we promised. We did it
without having to borrow for them.
Speaker 3 (11:00):
In a fiscally neutral way.
Speaker 5 (11:01):
We found the savings that people said couldn't be found.
We found twenty three billion dollars worth of saving. We
said we'd get inflation down, and at times that felt
like it was going to be very tough, but we're
there now, we're back in the target range.
Speaker 4 (11:13):
What's your biggest win.
Speaker 3 (11:14):
I think the.
Speaker 5 (11:15):
Biggest win was getting tax relief out the door in
a fiscally neutral way and ensuring that we met that
commitment to New Zealanders, because my kind of philosophical view
on government is if you come in with big promises
and then you don't deliver on them, you actually lose
the license to be there, and I think the last
Labor government did too much of that. There were too
(11:36):
many things they promised, whether it was one hundred thousand
Kiwi bill times or eliminating child poverty or delivering light
rail where they talked about it, but they.
Speaker 3 (11:43):
Didn't do that.
Speaker 5 (11:44):
So I was very determined on tax that we keep
our commitment to the New Zealand people.
Speaker 4 (11:47):
Give me your own personal perspective on the coalition. How
have you felt it?
Speaker 5 (11:52):
Look, I've been surprised by how well it's worked. And
the way I'd explain it is every time a minister
comes up with an idea, there are going to be
critiques of that idea from different angles. The advantage of
the coalition is that we actually have those discussions internally
before we then take ideas out to the public, and
(12:14):
so that means that they're more tested. They're more tested
from an act perspective, from a New Zealand first perspective
than they would otherwise be. But we've actually had a
really driving consensus between the three parties, which was we
were all elected saying look, the economy is in a mess.
Speaker 3 (12:27):
You need to fix it.
Speaker 5 (12:28):
You need to get the spending under control, get the
waste out, you need to get back on the side
of farmers. You need to ensure you restore law and order,
get basics back into the school system.
Speaker 3 (12:37):
So we share a common agenda and a common purpose.
Speaker 2 (12:40):
Okay, we're running out a little bit of time, and
I really I've got so much more quicker answer you quick,
a little bit quicker, but I love having you here.
Speaker 4 (12:47):
Let's talk about Wellington.
Speaker 2 (12:49):
Let's spend a little bit of time on Wantington for
our listeners, we've feeled I think we feel stronger that
we've been hit pretty hard by your government and by
some of the.
Speaker 4 (12:59):
Decisions that you've made. Personally.
Speaker 2 (13:00):
What impact did our public service job comes have on
our regions?
Speaker 4 (13:04):
Do you really believe?
Speaker 5 (13:06):
Well, Look, first thing I'd say to Wellington is one
of the things you've been hit really hard by was
a labor green council.
Speaker 3 (13:11):
Don't forget it.
Speaker 5 (13:13):
But the second thing that I'd say is look, in
terms of the public service reductions, they have been pretty
overstated in many fora heard numbers of ten thousand, that's
just not true. There have been seventeen hundred redundancies across
the public service in the past year or so. Many
of those people have gone on to find employment elsewhere.
(13:35):
We had an unsustainably growing public service overall.
Speaker 3 (13:39):
We want to see teachers.
Speaker 5 (13:40):
Nurses frontline roles, but we don't think that a country
can live beyond its means indefinitely.
Speaker 2 (13:45):
Okay, I'm going to keep pushing you because I've got
so much more and I know you've got to go.
As a Rollingtonian, how much of a role has the
Council played in the state of Wellington do you believe?
Speaker 3 (13:54):
Well, it's played a big role.
Speaker 5 (13:55):
You know. It's really frustrated a lot of people to
see a focus on putting in cycle lanes and slow
down juddabars, removing car parks at a time when not
only are the rates going up really astronomically, but small
businesses have been crying out for relief and it's felt
like the council has focused more on its own internal
political squabbles than the people that's meant to serve.
Speaker 2 (14:18):
What can we do, from the Minister of Finance of Life,
what can we do to get well incon.
Speaker 4 (14:22):
Back on track.
Speaker 5 (14:23):
When council election time comes, vote and vote sensibly.
Speaker 3 (14:29):
If you don't like what they've been doing.
Speaker 5 (14:30):
Don't vote for the same people again just because you've
heard their name before. Okay, have a look through the
list and vote for people who are on your side.
Speaker 4 (14:37):
Okay.
Speaker 2 (14:37):
Now I've got to ask you this question because I
believe I'm right.
Speaker 4 (14:41):
Let's talk the fairies.
Speaker 2 (14:43):
I believe, and I've said it publicly that you went
to the caucus and said, I've got a plan smaller fairies,
not rail enabled.
Speaker 4 (14:52):
We're going to do this, and we're going to do that.
Speaker 2 (14:54):
Winston Peter's kicked up and said, no, I want rail
on them, and I want them and i want them
and I'm not going to agree to anything else. So
you said you take the portfolio over, portfolio over of
us the fairies by March, or I'm going to come
in and do it my way.
Speaker 4 (15:09):
I'm right, haven't I.
Speaker 5 (15:11):
I've heard you talking about this on the radio and
look broadly, Lord, broadly, I.
Speaker 3 (15:16):
Think you get it.
Speaker 5 (15:17):
Nick. So I had a job, and that was to
find a value for money way to deliver safe, reliable,
fairy services. I actually appointed an expert group of people
who know much more about freight shipping than I do.
They came to me with advice and June a very
detailed proposal about how we could achieve replacement ships and
a value for money envelope without the cost blowouts that
(15:39):
the last project had involved. I thought it was a
good plan, but it was important that I tested not
only with my colleagues but.
Speaker 3 (15:45):
With experts, which we did.
Speaker 5 (15:48):
The thing that you've missed in your story is that
the tension I face wasn't just with New Zealand first.
It was also other colleagues whose view was we shouldn't
be investing public money in this at all. So I
had some persuasion to do where we've got to. You're
right here is a very very good fallback position. And
when I said I delivered, what I meant was I've
got something on the table right now.
Speaker 3 (16:08):
I know we can do and.
Speaker 5 (16:11):
The government has said, look, if a better solution doesn't
emerge before March, we'll go ahead and procure those ships.
And that gives me confidence that I've done my bit,
but I've got something there that will ensure we have
a good fairy service.
Speaker 2 (16:22):
And I knew your body language. I've been around you
enough to know your body language, so I picked that
pretty well.
Speaker 5 (16:29):
Can I just say I get along well with Winston Peters.
Speaker 3 (16:32):
He's in the next door office.
Speaker 5 (16:34):
And genuinely, if he can deliver a better solution or
power to him, because.
Speaker 3 (16:38):
If it's better for New Zealand, then I'm on.
Speaker 4 (16:40):
Site quickly, very quickly. What are your hopes for twenty
twenty five.
Speaker 3 (16:44):
I want New Zealanders to thrive in twenty five.
Speaker 5 (16:46):
I want to see growth restored and I want people
to feel some economic optimism after what's been a tough period.
Speaker 4 (16:53):
Going over to the wire wrapper broadly for Christmas with.
Speaker 3 (16:56):
The family, yeah we are.
Speaker 5 (16:57):
We're sticking to the family tradition and we'll have Christmas
here at home, but then head over to the World
and Upper and it'll be surf life saving for the kids,
a couple gin and tonic swimming in the sea.
Speaker 3 (17:08):
It'll be really, really lovely, very Christmas. Merry Christmas to be.
Thanks for having me on the show and I look
forward to being back again next year.
Speaker 2 (17:15):
I thank you for all you've done for the show
since we started, because we've been we've had a long.
Speaker 4 (17:22):
I don't want to say relationship, that's the wrong word. Association.
Speaker 5 (17:25):
Yeah, we have, we have, and I still listen to
the show regularly.
Speaker 3 (17:29):
You guys do a great job, and.
Speaker 4 (17:30):
I appreciate what you're doing for our country.
Speaker 2 (17:32):
And I hope you're right about that holding on because
I know there's a lot of my colleagues sort of
friends that are holding on.
Speaker 3 (17:38):
Yeah, thank you. Well, I'm thinking of them and I
tell you they're what drive me when I get to
work each day.
Speaker 2 (17:43):
There she is Valentonian firstly, finance minister secondly, and thirdly
a very.
Speaker 4 (17:49):
Very nice person.
Speaker 1 (17:50):
For more from Wellington Mornings with Nick Mills, listen live
to news talks It'd be Wellington from nine am week days,
or follow the podcast on iHeartRadio.
You're listening to the Wellington Mornings podcast with Nick Mills
from News Talk said b.
Speaker 2 (00:12):
Joining us now for the final time this year is
Proud welling TONI and Finance Minister Nikola Willis. Good morning, Nicholin.
Lovely you for you to take time out. I know
you've had a hectic time, so welcome to the show.
Speaker 3 (00:23):
Good morning. Great to be on the show with you, Nick,
and great to be at Prefab.
Speaker 4 (00:26):
Yeah, isn't it. I know that this is one of
your spots.
Speaker 2 (00:28):
So without dampening the festive mood, we have to start
talking about the GDP.
Speaker 4 (00:34):
Figures of yesterday.
Speaker 2 (00:35):
They dropped one percent to September quarter, our deepest and
now our deepest recession since nineteen ninety one excluding COVID.
Tell us how that made you feel when you first
heard that hu yesterday.
Speaker 5 (00:46):
Well, it made me feel like all of that pain
that New Zealanders have been experiencing over the past year
has been reflected in the numbers. You know, There's been
no doubt about it. We've inherited some very tough economic
conditions and you've seen that.
Speaker 3 (00:59):
In the community. We've seen businesses.
Speaker 5 (01:02):
Struggling, we've seen people really experiencing that protracted period of
first time inflation and then really high interest rates had a.
Speaker 3 (01:10):
Real dampener on the economy.
Speaker 5 (01:11):
The Reserve Bank essentially engineered a recession.
Speaker 3 (01:15):
We've now had it.
Speaker 5 (01:16):
But the good news is and the bit that I
really want people to focus on going into Christmas as
we're through the worst of it. Infrastrates in our court,
inflation's under control it and by consensus, economists are saying
next year we will have sustained growth and that's going
to feel a lot better after what have been a
tough few years.
Speaker 4 (01:32):
Can I ask you a personal question.
Speaker 2 (01:35):
If I was a business person that had four years
like we've had, employed a lot of people and struggled
like how to keep going, would you keep going or
would you give up?
Speaker 3 (01:47):
I'd keep going.
Speaker 5 (01:48):
I know that if you've managed to keep your business
going through these past few years, you are tough, you
are resilient, You have what it takes.
Speaker 3 (01:56):
In New Zealand is still the best country on earth.
Speaker 5 (01:59):
We have some really good times ahead of us. We
know that with lower interest rates, families will have more
money to spend. It'll be easier to borrow for the
next project because it will be cheaper.
Speaker 3 (02:10):
And we know that you've got a government that's on
your side.
Speaker 5 (02:12):
We are working at pace to get rid of some
of the red tape and complexity that's made it hard
to do business.
Speaker 3 (02:18):
We're getting on with building.
Speaker 5 (02:19):
Infrastructure, improving the skills that school leavers have, working on
the science and innovation system, encouraging investments.
Speaker 3 (02:26):
So we're with you. We beck you just keep going.
Speaker 2 (02:30):
Now we've heard with the recession figures again, though, doesn't
that sort of like it feels like you get up
one rung on a ladder and then you slip back down,
you know, so you're not in your head so you
agree with me.
Speaker 4 (02:41):
It just feels so damn hard for us.
Speaker 3 (02:43):
Yeah, look, it's tough reading those numbers. But remember their retrospective.
Speaker 5 (02:47):
They describe history what's already happened, not what's going to happen.
Speaker 2 (02:52):
And I think that better right now, do you reckon
if we actually went out? I mean, look at this place.
It's a buzz. It feels excited. People are It's been
like that all morning and it's not because we're here.
Speaker 4 (03:00):
It's like that.
Speaker 3 (03:01):
Because I think it's because they want to see Nick Mils.
Speaker 1 (03:03):
Don't.
Speaker 2 (03:03):
No, not at all but you know what I'm saying.
You know, you go into little pockets and things are good. Yeah,
but there's a lot of pockets that are really struggling.
Speaker 5 (03:11):
Yeah. Look, it is a mixed picture across the economy.
You know, I was in Eltham a couple of weeks
ago and for dairy price at ten dollars, they're feeling
pretty great in that community because that money is starting
to flow through into services and businesses.
Speaker 3 (03:23):
So it is a mixed picture.
Speaker 5 (03:25):
But what we know is that overall growth is set
to revive next year and after several years are bouncing.
Speaker 3 (03:31):
Along the bottom. That will feel quite different from many people.
Speaker 5 (03:34):
You know, these things take time to fix, and we're
fixing them.
Speaker 2 (03:38):
You know what worries me a little bit, and I
want your view on it, is do you actually have
the confidence in the Reserve Bank?
Speaker 4 (03:43):
And Adrian Ora?
Speaker 2 (03:44):
I mean, you know, there's been obvious the states made
to get us to where we are now, some of
them enforced on them and I have no question about that,
But do you still have the confidence in it?
Speaker 5 (03:54):
Well, I've been open in my criticism both in opposition
and when we came into government that, in my view,
the Reserve Bank overdid it during COVID. They did too
much quantitative easing to too much money, kept interest rates
too low for too long. The funding blending program pumped
too much cash into the economy, which contributed to sky
(04:15):
high inflation that has left massive scars on New Zealanders
and led to interest rates having to climb as high
as they did. So I think mistakes were made. It's
very important to me that we maintain confidence in our
monetary institution, in the Reserve Bank, and that it remain
independent in its monetary policy decision making.
Speaker 3 (04:36):
So we have been refreshing the lawheads.
Speaker 2 (04:39):
What if your lagerheads, you've got a plan and we
all agree, and we've all brought into your plan. You're
the finance minister and the Reserve Bank governor is doing
something a little bit different and not making it as
easy as he should for you, which is.
Speaker 4 (04:52):
How a layman like myself perceives it.
Speaker 3 (04:54):
Well, there's a couple of things that we can do there.
The first is that we have.
Speaker 5 (04:57):
Control over the membership of the Board of the Reserve Bank,
and we've been working to refresh that. The second thing
is that I, by statute am able to set my
expectations to the bank.
Speaker 3 (05:07):
So you will have.
Speaker 5 (05:07):
Seen either shared what's called a new Financial Policy Remit,
which sets out my expectations.
Speaker 1 (05:13):
Of the bank.
Speaker 3 (05:13):
I'm really big on banking.
Speaker 5 (05:15):
Competition, so I've said, look, I want you to get
rid of some of the regulatory mote that's made it
very hard for new services to enter the banking sector,
and i want you to get on.
Speaker 3 (05:23):
With that work and do it fast.
Speaker 5 (05:25):
We also, as soon as we came into government, said look,
we want the Reserve Bank focused on the most important job.
Speaker 3 (05:30):
Right now, which is reducing inflator and we did that
through statute.
Speaker 5 (05:34):
So ultimately the democratically elected representatives of the Parliament determine
what the Reserve Bank's focus is.
Speaker 2 (05:41):
Okay, if we go to the Reserve Bank, to the
ordinary banks. Chris Bisson was on the show yesterday and
me and him talked about why don't someone or government
put force put some more pressure on the major banks
to be a bit more helpful to business.
Speaker 5 (05:58):
Oh, look, we are putting pressure on the banks, and
we're doing it in three ways. First, in terms of
those crudential policy work at the Reserve Bank, I've asked
them to look at what they can do to support
lending going into the productive parts of the economy, and
to review something complex called capital risk waitings, which is
basically about how much capital banks need to hold to lend.
Speaker 3 (06:18):
To certain industries.
Speaker 5 (06:20):
But I've also seen to the banks themselves look in
an environment where the Commerce Commission has concluded that you
are not competitive, that we have a two tier oligothily,
that you're way more profitable than banks around the world.
You need to shaften up, and we've put them on notice.
We've said these obvious things that you can do to
demonstrate to New Zealanders that you're on their side, that
(06:40):
you're going to offer better, more affordable banking services.
Speaker 3 (06:43):
Get on and do it, because if you don't, then
the government will use our power to regulate.
Speaker 2 (06:48):
Does the government still believe that small to medium sized businesses, what.
Speaker 3 (06:54):
Is the crutch of New Zealand blinding in of our economy.
Speaker 4 (06:57):
Do they still believe in them?
Speaker 5 (06:59):
Absolutely, Small and medium businesses are where it all starts.
There's no such thing as a big business that didn't
start with a small idea from a brave person who
was prepared to put their money on the line to
pursue an idea, who saw a problem that they thought
could be solved, a service that they thought they could run,
a cafe they thought they could open, and said, you
(07:19):
know what, I'm going to put my hours into it.
I'm going to risk putting people onto the payroll. I'm
going to give it everything because I reckon this idea
has legs. We need more people like that. We need
to make it easier for them. We need to encourage
those risk takers because that's actually where jobs come from, right,
That's where incomes come from. So we are absolutely on
the side of smaller medium businesses.
Speaker 2 (07:39):
Has anyone done the figures, and this is one off
the bat, so Jo, I'm not expecting you to know,
But what percentage of bank loans to businesses don't have
family homers that has the ricks and mortar.
Speaker 3 (07:51):
That's a great question.
Speaker 5 (07:52):
I think that you'd find that most lending to small
and medium businesses uses the family home is collateral.
Speaker 3 (07:58):
And that just shows you how much skin people have
in the game.
Speaker 5 (08:00):
You know, I get frustrated when there's sometimes a conflict
set out between business versus the people, is that businesses
are somehow not on the side of the people, and
my experience it's small and medium businesses who care so
much about their staff that often they'll forego their own
income to keep paying their staff, who are literally putting
their family home at risk so that they.
Speaker 3 (08:22):
Can keep people employed. And I think we should all
remember that at Christmas time.
Speaker 4 (08:25):
Yeah, great, great, way, let's move on. Let's start talking
about your year.
Speaker 2 (08:30):
Your first year twenty twenty four was your first full
year in the job. I mean, how do you feel.
I mean, you look great. You look very relaxed, and
you look great. I mean, for Deceb between tath, you
look amazing. So it hasn't taken too much of a tolerance.
Speaker 3 (08:47):
I thank you.
Speaker 5 (08:48):
Look, it's been the biggest year of my career. Unquestionably,
there have been times where I felt so exhausted that
I'd compare it to the weeks when I have three
children under three, because the job is relentless. But I
have loved it, the opportunity to represent New Zealanders and
get on with the job we're elected to do. There
(09:08):
isn't a day I don't wake up and think, oh
my gosh, I get to do it again.
Speaker 3 (09:12):
And I am is.
Speaker 2 (09:13):
There a day where you think back? I mean, you
were a rising star in Fonterira. I've spoke with several
people saying that you would have stayed with them. Been
managing director of fon Terra, probably a bigger job than
Prime minister really financially and everything that goes with it.
Has there ever been a day where you said, gosh,
why did I leave Fonterira.
Speaker 3 (09:31):
Oh?
Speaker 5 (09:31):
Look, I still love the work that Fonterra does and
I loved my years there. But the heart wants what
the heart wants, and I had a real call to
democratic service. I really felt that I could make a
difference to the country in government that would go broader
than what I was able to.
Speaker 3 (09:49):
Achieve at Fonterra.
Speaker 5 (09:50):
And I have been so fortunate that those opportunities have
been afforded to me, and I find myself in a
position where I feel like, if I do my job
really well and well alongside my colleagues, then we'll make
this country a better place.
Speaker 4 (10:02):
What's been the biggest challenge?
Speaker 2 (10:03):
What's the one day that you went home and you
had your shower, you hopped them to bed and.
Speaker 4 (10:11):
You thought, oh my god, how am I going to
fix that? What am I going to do? We all
have them done. We already have those days.
Speaker 3 (10:18):
Yeah, Yeah, we do have those days.
Speaker 5 (10:20):
Like I think when we first came into government and
I got hit by the initial briefings from.
Speaker 3 (10:25):
The Treasury where they told me we were actually in.
Speaker 5 (10:28):
A structural deficit, Where they laid out to me a
series of fiscal cliffs and fiscal risks that we hadn't
been apparent to us before we were elected, Where they
showed me just how difficult it was going to be
to deliver our first budget on the terms in which
we wanted to do it. I saw the size of
the task ahead of me as a massive but I
(10:49):
also will never forget that following that feeling, we knuckled
down and we did it. You know, we did deliver
those that tax relief that we promised. We did it
without having to borrow for them.
Speaker 3 (11:00):
In a fiscally neutral way.
Speaker 5 (11:01):
We found the savings that people said couldn't be found.
We found twenty three billion dollars worth of saving. We
said we'd get inflation down, and at times that felt
like it was going to be very tough, but we're
there now, we're back in the target range.
Speaker 4 (11:13):
What's your biggest win.
Speaker 3 (11:14):
I think the.
Speaker 5 (11:15):
Biggest win was getting tax relief out the door in
a fiscally neutral way and ensuring that we met that
commitment to New Zealanders, because my kind of philosophical view
on government is if you come in with big promises
and then you don't deliver on them, you actually lose
the license to be there, and I think the last
Labor government did too much of that. There were too
(11:36):
many things they promised, whether it was one hundred thousand
Kiwi bill times or eliminating child poverty or delivering light
rail where they talked about it, but they.
Speaker 3 (11:43):
Didn't do that.
Speaker 5 (11:44):
So I was very determined on tax that we keep
our commitment to the New Zealand people.
Speaker 4 (11:47):
Give me your own personal perspective on the coalition. How
have you felt it?
Speaker 5 (11:52):
Look, I've been surprised by how well it's worked. And
the way I'd explain it is every time a minister
comes up with an idea, there are going to be
critiques of that idea from different angles. The advantage of
the coalition is that we actually have those discussions internally
before we then take ideas out to the public, and
(12:14):
so that means that they're more tested. They're more tested
from an act perspective, from a New Zealand first perspective
than they would otherwise be. But we've actually had a
really driving consensus between the three parties, which was we
were all elected saying look, the economy is in a mess.
Speaker 3 (12:27):
You need to fix it.
Speaker 5 (12:28):
You need to get the spending under control, get the
waste out, you need to get back on the side
of farmers. You need to ensure you restore law and order,
get basics back into the school system.
Speaker 3 (12:37):
So we share a common agenda and a common purpose.
Speaker 2 (12:40):
Okay, we're running out a little bit of time, and
I really I've got so much more quicker answer you quick,
a little bit quicker, but I love having you here.
Speaker 4 (12:47):
Let's talk about Wellington.
Speaker 2 (12:49):
Let's spend a little bit of time on Wantington for
our listeners, we've feeled I think we feel stronger that
we've been hit pretty hard by your government and by
some of the.
Speaker 4 (12:59):
Decisions that you've made. Personally.
Speaker 2 (13:00):
What impact did our public service job comes have on
our regions?
Speaker 4 (13:04):
Do you really believe?
Speaker 5 (13:06):
Well, Look, first thing I'd say to Wellington is one
of the things you've been hit really hard by was
a labor green council.
Speaker 3 (13:11):
Don't forget it.
Speaker 5 (13:13):
But the second thing that I'd say is look, in
terms of the public service reductions, they have been pretty
overstated in many fora heard numbers of ten thousand, that's
just not true. There have been seventeen hundred redundancies across
the public service in the past year or so. Many
of those people have gone on to find employment elsewhere.
(13:35):
We had an unsustainably growing public service overall.
Speaker 3 (13:39):
We want to see teachers.
Speaker 5 (13:40):
Nurses frontline roles, but we don't think that a country
can live beyond its means indefinitely.
Speaker 2 (13:45):
Okay, I'm going to keep pushing you because I've got
so much more and I know you've got to go.
As a Rollingtonian, how much of a role has the
Council played in the state of Wellington do you believe?
Speaker 3 (13:54):
Well, it's played a big role.
Speaker 5 (13:55):
You know. It's really frustrated a lot of people to
see a focus on putting in cycle lanes and slow
down juddabars, removing car parks at a time when not
only are the rates going up really astronomically, but small
businesses have been crying out for relief and it's felt
like the council has focused more on its own internal
political squabbles than the people that's meant to serve.
Speaker 2 (14:18):
What can we do, from the Minister of Finance of Life,
what can we do to get well incon.
Speaker 4 (14:22):
Back on track.
Speaker 5 (14:23):
When council election time comes, vote and vote sensibly.
Speaker 3 (14:29):
If you don't like what they've been doing.
Speaker 5 (14:30):
Don't vote for the same people again just because you've
heard their name before. Okay, have a look through the
list and vote for people who are on your side.
Speaker 4 (14:37):
Okay.
Speaker 2 (14:37):
Now I've got to ask you this question because I
believe I'm right.
Speaker 4 (14:41):
Let's talk the fairies.
Speaker 2 (14:43):
I believe, and I've said it publicly that you went
to the caucus and said, I've got a plan smaller fairies,
not rail enabled.
Speaker 4 (14:52):
We're going to do this, and we're going to do that.
Speaker 2 (14:54):
Winston Peter's kicked up and said, no, I want rail
on them, and I want them and i want them
and I'm not going to agree to anything else. So
you said you take the portfolio over, portfolio over of
us the fairies by March, or I'm going to come
in and do it my way.
Speaker 4 (15:09):
I'm right, haven't I.
Speaker 5 (15:11):
I've heard you talking about this on the radio and
look broadly, Lord, broadly, I.
Speaker 3 (15:16):
Think you get it.
Speaker 5 (15:17):
Nick. So I had a job, and that was to
find a value for money way to deliver safe, reliable,
fairy services. I actually appointed an expert group of people
who know much more about freight shipping than I do.
They came to me with advice and June a very
detailed proposal about how we could achieve replacement ships and
a value for money envelope without the cost blowouts that
(15:39):
the last project had involved. I thought it was a
good plan, but it was important that I tested not
only with my colleagues but.
Speaker 3 (15:45):
With experts, which we did.
Speaker 5 (15:48):
The thing that you've missed in your story is that
the tension I face wasn't just with New Zealand first.
It was also other colleagues whose view was we shouldn't
be investing public money in this at all. So I
had some persuasion to do where we've got to. You're
right here is a very very good fallback position. And
when I said I delivered, what I meant was I've
got something on the table right now.
Speaker 3 (16:08):
I know we can do and.
Speaker 5 (16:11):
The government has said, look, if a better solution doesn't
emerge before March, we'll go ahead and procure those ships.
And that gives me confidence that I've done my bit,
but I've got something there that will ensure we have
a good fairy service.
Speaker 2 (16:22):
And I knew your body language. I've been around you
enough to know your body language, so I picked that
pretty well.
Speaker 5 (16:29):
Can I just say I get along well with Winston Peters.
Speaker 3 (16:32):
He's in the next door office.
Speaker 5 (16:34):
And genuinely, if he can deliver a better solution or
power to him, because.
Speaker 3 (16:38):
If it's better for New Zealand, then I'm on.
Speaker 4 (16:40):
Site quickly, very quickly. What are your hopes for twenty
twenty five.
Speaker 3 (16:44):
I want New Zealanders to thrive in twenty five.
Speaker 5 (16:46):
I want to see growth restored and I want people
to feel some economic optimism after what's been a tough period.
Speaker 4 (16:53):
Going over to the wire wrapper broadly for Christmas with.
Speaker 3 (16:56):
The family, yeah we are.
Speaker 5 (16:57):
We're sticking to the family tradition and we'll have Christmas
here at home, but then head over to the World
and Upper and it'll be surf life saving for the kids,
a couple gin and tonic swimming in the sea.
Speaker 3 (17:08):
It'll be really, really lovely, very Christmas. Merry Christmas to be.
Thanks for having me on the show and I look
forward to being back again next year.
Speaker 2 (17:15):
I thank you for all you've done for the show
since we started, because we've been we've had a long.
Speaker 4 (17:22):
I don't want to say relationship, that's the wrong word. Association.
Speaker 5 (17:25):
Yeah, we have, we have, and I still listen to
the show regularly.
Speaker 3 (17:29):
You guys do a great job, and.
Speaker 4 (17:30):
I appreciate what you're doing for our country.
Speaker 2 (17:32):
And I hope you're right about that holding on because
I know there's a lot of my colleagues sort of
friends that are holding on.
Speaker 3 (17:38):
Yeah, thank you. Well, I'm thinking of them and I
tell you they're what drive me when I get to
work each day.
Speaker 2 (17:43):
There she is Valentonian firstly, finance minister secondly, and thirdly
a very.
Speaker 4 (17:49):
Very nice person.
Speaker 1 (17:50):
For more from Wellington Mornings with Nick Mills, listen live
to news talks It'd be Wellington from nine am week days,
or follow the podcast on iHeartRadio.
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