Nicola Willis: Finance minister on Government debt worse than initially thought

The Government's financial books have sunk further into debt in the year to June, with Treasury revealing the deficit on the Crown books deepened by $3.4 billion.

It was also $1.8 billion worse than Treasury forecast in the May budget. 

Minister of Finance Nicola Willis joins Francesca Rudkin to explain why. 

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Episode Transcript

Speaker 1 (00:00):
Right. The government's financial books have sunk further into debt.
In the year to June, Treasury has revealed the deficit
on the Crown books deepened by three point four billion dollars.
It was also one point eight billion dollars worse than
Treasury forecast in the May budget. Nicola Willis is the
Minister of Finance and she is with us now. Good afternoon, Nicola,
thank you for being with us.

Speaker 2 (00:21):
Great to be on the show.

Speaker 1 (00:22):
What's your reaction to these numbers?

Speaker 2 (00:25):
Well, look, this just underscores the need for the government's
ongoing efforts to restore discipline to public spending. Where we
were elected on a mandate of tidying up the books
for spring a bit more respect for taxpayers money and
getting New Zealand back into a more sustainable financial position,
and these numbers underscore why that is so necessary. Of course,

(00:45):
they relate to the year that's passed, during which a
very important event happened, which was a change of government,
and we're taking a much more disciplined path going forward.

Speaker 1 (00:55):
What is driving this What are the expenses the main ones?

Speaker 2 (00:59):
Well, there's been a real build up in the amount
of spending that the government does as a proportion of
the overall economy that's increased dramatically in recent years, adding
one hundred and eighteen billion dollars to New Zealand government
debt in just five years. And that's what happens when

(01:20):
people are all disciplined about the spending choices they make.
We've seen significant growth across the public sector. We've seen
lots of spending going in lots different directions, and we've
come in and seeing that that is not sustainable. Essentially,
we're spending more than we earn, that we are living
beyond our means, and just like any household or business,

(01:41):
we need to get those books back in balance. And
we've seen in New Zealanders we've seen that does involve
some tough decisions. It does mean we can't say yes
to everything that we want to. At the same time,
we can drive investment where it's needed by pulling our
belt in on the things that are less necessary.

Speaker 1 (01:58):
Minister, can can you just keep cutting? Is that the
way we're going to counter it?

Speaker 2 (02:03):
Well, we've made a pledge that we will continue to
invest more in the health system and every single budget
that we deliver more funding will go into our schools.
We're going to keep funding those important frontline services. But
what that requires from us is that we keep looking
across all of the spending that the government does to say, well,
where's it being wasted, Where's it not going to a

(02:25):
good use, where is it not actually delivering good outcomes
for the New Zealanders it's meant to serve. And so
I've committed for as long as I'm Finance Minister, i
expect every public agency, every minister, every day to be
looking at where's the money not delivering vally for tex Player,
because if we can put that money into a school
or a hospital, we should do.

Speaker 1 (02:45):
You regreet to the tax cuts, the tax cuts in light.

Speaker 2 (02:48):
Of this absolutely not. You know, you can't operate as
a government by saying we'll just spend waiver we want
and then more treat taxpayers like a bottomless atm who
can keep funding. And that was essentially the approach of
the last government. They allowed the amount of tax that
New Zealanders were paying to increase dramatically and that was
hitting working people. In my view is that every family,

(03:12):
every household, knows how to spend their money after the
best students, and as a government we need to respect
that our text cuts were modest. They just restored a
bit of balance.

Speaker 1 (03:22):
Minister of Finance Nicola Willis, thank you so much for
your time. It airs fifteen past five. For more from
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