Barbara Edmonds: Labour Finance Spokesperson on the preview of the 2025 Budget

The Government books are expected to reach surplus by 2029. 

Finance Minister Nicola Willis has teased slices of her Budget 2025 cake, revealing $1.3 billion in new operating spending – a cut from the forecast of $2.4 billion. 

Ministers and agencies have been asked to cut more costs, for diversion into focus areas including health, education, and defence. 

Labour’s Finance Spokesperson Barbara Edmonds told Ryan Bridge it all comes down to the choices Willis will need to make to get to that surplus. 

She says this is where choices really matter, and the Government’s pulling back at a time where they should be investing. 

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Episode Transcript

Speaker 1 (00:00):
The government harving the operating allowance and this budget to
one point three billion it was two point four billion
billions and savings will be found to fund new stuff, health, education, cops, defense,
They're all getting a boost, according to the minister yesterday.
Labour's finance spokesperson Barbara Evans will be this morning. Barbara,
Good morning, Good morning, Ryan.

Speaker 2 (00:18):
How are you.

Speaker 1 (00:19):
I'm very well, thank you. Good to have you on.
Did you see that note from ASB last night. They're
perking interest rates I'll have to go lower to do
more of the heavy lifting for growth. What do you
make of it?

Speaker 2 (00:28):
Yeah, that I've seen that commentary a little bit as
well online from different economists and that's really to help
stimulate the economy and growth. So if that's the case,
I mean, I know the Reserve Bank governor or, the
previous guy said that there'll be two cuts before the
middle of the year. So the Financial Stability Report will
come out next week, so it'll be interesting to see

(00:51):
where they land.

Speaker 1 (00:51):
That would be a good thing, though, wouldn't it. I mean,
if you have the Reserve Bank doing more of the
heavy lifting bringing our mortgage rates down so we're not
so poor, is that not a good outcome.

Speaker 2 (01:02):
Yeah, that is a good outcome if you've got a
mortgage and if you rent, obviously, but it's very much
clear that it's most the economy is not growing.

Speaker 1 (01:12):
Yeah yeah, yeah, I know. But I mean, well, who's
is at the moment? I suppose that's the problem, isn't it.
So the surplus that's what we want to get to, right,
and this is why she's she's cut the operating allowance
because she wants to get that surplus by twenty twenty nine.
Is that not a laudable goal?

Speaker 2 (01:29):
Well, it comes down to what are the choices she's
going to have to make to get to that surplus.
So again we've had concerns around productivity. We want to
make sure that they're smart investment. You know, it's really
clear and New Zealand does have a productivity issue in
some of those key areas like innovation, research and development.

(01:50):
That's we're smart governments clotally.

Speaker 1 (01:53):
But we've had those problems for thirty years now, haven't we.
If we're looking at the here and now, surely the
bigger issue is the debt. You know, debt to GDP
is forty percent heading to forty five. It's twice what
it was pre COVID. Borrowing costs are going up. You know,
what do we do if we have an earthquake? What
do we do if there's a cyclone? You know, we've
got Trump and his terrace. We're a small trading nation.

(02:15):
When is a good time to get to surplus and
start paying down debt? Barbara?

Speaker 2 (02:20):
Yeah, And the point is key that as long as
the economy is growing, your deet to GEDDP measure will fall.
So that's the really important part to it. You know,
labor had a surplus before we went into COVID in
twenty nineteen of seven billion dollars. And you're right, you
put the umbrella up when you need to when there's
a pandemic, when there was a cyclone, So it's making

(02:43):
sure you have that headroom.

Speaker 1 (02:44):
Was there a little too much umbrella, do you think?

Speaker 2 (02:48):
Well, we had to invest to keep people in jobs.
We had the lowest COVID mortality rate in the world.
You know, we had record low employment when Treasury was
forecasting economic But it.

Speaker 1 (02:59):
Was all have to be paid for at some point,
which is what's happening now, isn't it. I mean, that's
the lesson we've learned, Barbara.

Speaker 2 (03:06):
And that's the interesting thing is that actually we only
went into a recession last year. We were actually still
growing in the Treasury hang said that to.

Speaker 1 (03:14):
Me, the Treasury chief economists. Sorry, so that again, the
Treasury chief economist told you that the growth that.

Speaker 2 (03:21):
We had been growing, we still had actual marginal growth
post COVID And actually we only went into recession the
last three quarters of the last financial year.

Speaker 1 (03:31):
Yeah, everybody knows that. But you're not saying that's just
because we had a national government, are you? No?

Speaker 2 (03:36):
Always saying that this is where choices really matter.

Speaker 1 (03:39):
But the choices houses.

Speaker 2 (03:41):
You keep construction workers in jobs, you build homes, Governments
pulling back at a time when they should be investing.

Speaker 1 (03:48):
But you guys went to Hundi, didn't you, And you
mentioned the fact we were growing, but inflation was through
the roof. We had to bring that under control. That's
what's happening.

Speaker 2 (03:57):
Now And that goes to your earlier around the Reserve
Bank having to do a lot of that heavy lifting.
And they believe that they needed to hike interest rates
up to bring inflation down because that's their mandate. So
seeing that, asb the commentators are saying well, they think
interest rates are going to drop further. That's the Reserve
Bank doing.

Speaker 1 (04:15):
Their job, all right. I really appreciate you coming on
the show as always, Barbara Edmonds, Labour's finance spokesperson. For
more from Early Edition with Ryan Bridge, listen live to
News Talks at B from five am weekdays, or follow
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