December 1, 2025 • 7 mins
As expected, the Reserve Bank cut the OCR to 2.25% last week - but an unexpected side effect has been a lack of effect.
The Reserve Bank announced that this would be the end of cuts, sending the wholesale market into a panic and, therefore, seeing no change in interest rates.
Finance Minister Nicola Willis told Heather du Plessis-Allan, "my message to the banks is always the same, which is pass on as much as you possibly can because it's good for the economy."
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Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
And Nikola will as the finance ministers with US high Nicola, hi, Ever,
how are you feeling about the banks after they failed
to cut the fixed rates post ocr.
Speaker 2 (00:09):
Well, my message to the banks is always the same,
which is pass on as much as you possibly can,
because it's good for the economy, and when the economy
does well, we all do well in your citizens in
this economy, and you should be doing your utmost to
support it.
Speaker 1 (00:23):
Is this a bank's problem or is this the Reserve
Bank completely stuffing up their comms last week?
Speaker 2 (00:29):
Well, I think that the banks always have a choice
about how much they pass on. Now. It is the
case that markets pricing some of these changes ahead of time,
and that was certainly the case ahead of last week's announcement,
that the markets had already priced in that there would
be a reduction, and many banks had already taken that
into account. But it is also the case that there
(00:50):
is a gap, often a lag between what the wholesale
rates are doing and then what commercial banks are passing
on a mortgage levels. I'd like to see them do
it faster and harder.
Speaker 1 (01:00):
For example, Meghan has been texting for days now because
she's with A and Z and A and z's floating
range raid is coming down, A and Z's not dropping
its floating rates till Wednesday. Is that acceptable to you?
Speaker 2 (01:12):
Well, they could do it sooner, couldn't they? And what
we typically see is there is this lag between the
wholesale rates coming down and the banks getting around to
pass it on to their mortgage holders. And I'd love
to see them pass it on faster.
Speaker 1 (01:23):
Okay, Now, have you done everything that you plan to
do when it came to the banks or is there
have you got some more things up your sleeve?
Speaker 2 (01:30):
Well, we are progressing a number of recommendations from the
Commerce Commission inquiry and now following up on the FEC inquiry.
So that's an ongoing work program.
Speaker 1 (01:41):
Yeah, but you got to keep going.
Speaker 2 (01:44):
No, not necessarily, because there's a number of actions there
which require ongoing monitoring and ongoing activity.
Speaker 1 (01:50):
Okay, because I mean, how has this changed from the
cozy pillow fight? Feels like a cozy pillow fight.
Speaker 2 (01:56):
Well, remember, some of the things that we're doing haven't
come to fruition yet. So for example, Quevy Bank, we
are still looking to raise capital for Kwibank so it
can grow bigger and faster. In the future, and we
are still doing things like changing who can access the
word bank, making sure that a lower deposit is required
in order to set up a new bank, easing some
(02:17):
of the regulations which have prevented competitor banking banks from
entering the market. So some of those things are yet
to happen, but the work is underway to change it.
Speaker 1 (02:26):
The reason I'm asking Nikola is because I mean, it's
been reasonably disappointing what's happened in since the last OCR hike,
the one last week. But I'm just thinking that this
is it, right, this is our lot, this is what
we need to accept. We need to basically go hard
with the banks ourselves. You're not coming to save us,
No one's coming to save us.
Speaker 2 (02:42):
Well, what I've been really pleased to see is that
your friend Mike Hosking has come around to a point
of view I've had for some time, which is actually
the banks in New Zealand are very profitable and diet
seem to be passing as much. Okay, well, he has
said that he thinks they may have a point here. Yeah,
(03:02):
And my point straight back at the banks is actually
you need to maintain social license and you haven't done
a very good job of convincing New Zealanders that you're
doing your utmost to pass on rate reductions, to ensure
that you're being competitive, to compete for customers, offer them
good rates, and lend into this economy, particularly to small
businesses and others who rely on that cash flow to grow.
Speaker 1 (03:25):
Are you being serious about possibly repealing the Regulatory Standards Act?
Speaker 2 (03:30):
Well, yes, I'm serious. That National has not yet got
our position going into the campaign, and we will be
monitoring how that act works in practice carefully as you'd
expect that we should.
Speaker 1 (03:41):
This is outrageous flirting with Winston, isn't it.
Speaker 2 (03:45):
No, it's not as simply saying, let's see how it works.
We shouldn't have a closed mind on it and just
say no matter what evidence is, will just say it's perfect,
and we'll maintain a position that it needs to be maintained.
Let's see how it works in practice, let's keep an
open mind. If it does work well and reaches all
of the government's aspirations for it, then great ticketyboo, big
(04:06):
tick will continue. But if actually it doesn't deliver those outcomes,
then the National Caucus may want to take a position
that that's not a regime we want to get the name.
Speaker 1 (04:16):
Are the piece of legislation that you've passed in the
last two years that you're considering repelling.
Speaker 2 (04:22):
Well, that's the one that's top of mind, and there
may be others. The flirting with it.
Speaker 1 (04:28):
Hey, so what do you reckon? Because you will have
seen what Penny Henade said about how he's been having
chats with winnipe on the side.
Speaker 2 (04:35):
Yeah, ah yeah, I saw that.
Speaker 1 (04:38):
I was so are you prepared, like, are you bracing
yourself for the fact that Winston's going to play the
two of you off against each other as in Labor
v National after the next selection.
Speaker 2 (04:48):
Look, I just focus on what National can do to
put forward the best proposals to the New Zealand public
so we can win their votes. My position is always
the same. A vote for National is a much more
effective vote than a vote for New Zealand. First, always
has been, always will be.
Speaker 1 (05:03):
Do you fly on a Monday?
Speaker 2 (05:06):
I have done from time to time. I didn't this Monday.
Speaker 1 (05:09):
Are you flying next Monday with when the Air New
Zealand cabin strike is on?
Speaker 2 (05:13):
No, because that's a cabinet day.
Speaker 1 (05:15):
Oh thank god, lucky you how are you feeling about
Air New Zealand at the moment as the shareholding minister.
Speaker 2 (05:22):
Well, I think, like most New Zealanders, I want to
see them improving their performance wherever they can. And for me,
there's three kind of things they need to balance. On
the one hand, they need to make sure that they're
offering affordable flights to New Zealanders so they can see
their friends and family and enjoy this country. Two, they
need to be making sure they're getting a return on
(05:44):
capital that taxpayers have a big share of and so
they're driving profitability and productivity. And three they need to
be really good corporate citizens and support our economy to grow.
And there's no secret they have struggled in recent years
when it comes to their commercial performance.
Speaker 1 (06:02):
Yeah, I'm not loving them at the moment. Now what
do you think of Roger Gray and him saying that
we're called now Zealand.
Speaker 2 (06:09):
Well, I think he is on to something. If you
look across many of the issues that have held our
country back, it has been giving too many people veto
power to say no to sensible things, whether that's eden
park concerts, whether that's consens for new housing, whether that's
permission to start a new mind. Those are the things
that actually drive an economy forward and create wealth, and
(06:32):
New Zealand needs to get much better at saying yes
to them. It's even stuff like the people who moan
about tourists coming to New Zealand. Guess what those tourists
bring passion, They create jobs, they create incomes. So we
need to say yes more often.
Speaker 1 (06:46):
So love it.
Speaker 2 (06:46):
I like what he had to say.
Speaker 1 (06:48):
Brilliant. Hey, thank you, Nicole. I appreciate it. Nichola Willis,
Finance Minister.
Speaker 2 (06:51):
For more from Heather duplessy Ellen Drive, listen live to
news talks they'd be from four pm weekdays, or follow
the podcast on iHeartRadio
And Nikola will as the finance ministers with US high Nicola, hi, Ever,
how are you feeling about the banks after they failed
to cut the fixed rates post ocr.
Speaker 2 (00:09):
Well, my message to the banks is always the same,
which is pass on as much as you possibly can,
because it's good for the economy, and when the economy
does well, we all do well in your citizens in
this economy, and you should be doing your utmost to
support it.
Speaker 1 (00:23):
Is this a bank's problem or is this the Reserve
Bank completely stuffing up their comms last week?
Speaker 2 (00:29):
Well, I think that the banks always have a choice
about how much they pass on. Now. It is the
case that markets pricing some of these changes ahead of time,
and that was certainly the case ahead of last week's announcement,
that the markets had already priced in that there would
be a reduction, and many banks had already taken that
into account. But it is also the case that there
(00:50):
is a gap, often a lag between what the wholesale
rates are doing and then what commercial banks are passing
on a mortgage levels. I'd like to see them do
it faster and harder.
Speaker 1 (01:00):
For example, Meghan has been texting for days now because
she's with A and Z and A and z's floating
range raid is coming down, A and Z's not dropping
its floating rates till Wednesday. Is that acceptable to you?
Speaker 2 (01:12):
Well, they could do it sooner, couldn't they? And what
we typically see is there is this lag between the
wholesale rates coming down and the banks getting around to
pass it on to their mortgage holders. And I'd love
to see them pass it on faster.
Speaker 1 (01:23):
Okay, Now, have you done everything that you plan to
do when it came to the banks or is there
have you got some more things up your sleeve?
Speaker 2 (01:30):
Well, we are progressing a number of recommendations from the
Commerce Commission inquiry and now following up on the FEC inquiry.
So that's an ongoing work program.
Speaker 1 (01:41):
Yeah, but you got to keep going.
Speaker 2 (01:44):
No, not necessarily, because there's a number of actions there
which require ongoing monitoring and ongoing activity.
Speaker 1 (01:50):
Okay, because I mean, how has this changed from the
cozy pillow fight? Feels like a cozy pillow fight.
Speaker 2 (01:56):
Well, remember, some of the things that we're doing haven't
come to fruition yet. So for example, Quevy Bank, we
are still looking to raise capital for Kwibank so it
can grow bigger and faster. In the future, and we
are still doing things like changing who can access the
word bank, making sure that a lower deposit is required
in order to set up a new bank, easing some
(02:17):
of the regulations which have prevented competitor banking banks from
entering the market. So some of those things are yet
to happen, but the work is underway to change it.
Speaker 1 (02:26):
The reason I'm asking Nikola is because I mean, it's
been reasonably disappointing what's happened in since the last OCR hike,
the one last week. But I'm just thinking that this
is it, right, this is our lot, this is what
we need to accept. We need to basically go hard
with the banks ourselves. You're not coming to save us,
No one's coming to save us.
Speaker 2 (02:42):
Well, what I've been really pleased to see is that
your friend Mike Hosking has come around to a point
of view I've had for some time, which is actually
the banks in New Zealand are very profitable and diet
seem to be passing as much. Okay, well, he has
said that he thinks they may have a point here. Yeah,
(03:02):
And my point straight back at the banks is actually
you need to maintain social license and you haven't done
a very good job of convincing New Zealanders that you're
doing your utmost to pass on rate reductions, to ensure
that you're being competitive, to compete for customers, offer them
good rates, and lend into this economy, particularly to small
businesses and others who rely on that cash flow to grow.
Speaker 1 (03:25):
Are you being serious about possibly repealing the Regulatory Standards Act?
Speaker 2 (03:30):
Well, yes, I'm serious. That National has not yet got
our position going into the campaign, and we will be
monitoring how that act works in practice carefully as you'd
expect that we should.
Speaker 1 (03:41):
This is outrageous flirting with Winston, isn't it.
Speaker 2 (03:45):
No, it's not as simply saying, let's see how it works.
We shouldn't have a closed mind on it and just
say no matter what evidence is, will just say it's perfect,
and we'll maintain a position that it needs to be maintained.
Let's see how it works in practice, let's keep an
open mind. If it does work well and reaches all
of the government's aspirations for it, then great ticketyboo, big
(04:06):
tick will continue. But if actually it doesn't deliver those outcomes,
then the National Caucus may want to take a position
that that's not a regime we want to get the name.
Speaker 1 (04:16):
Are the piece of legislation that you've passed in the
last two years that you're considering repelling.
Speaker 2 (04:22):
Well, that's the one that's top of mind, and there
may be others. The flirting with it.
Speaker 1 (04:28):
Hey, so what do you reckon? Because you will have
seen what Penny Henade said about how he's been having
chats with winnipe on the side.
Speaker 2 (04:35):
Yeah, ah yeah, I saw that.
Speaker 1 (04:38):
I was so are you prepared, like, are you bracing
yourself for the fact that Winston's going to play the
two of you off against each other as in Labor
v National after the next selection.
Speaker 2 (04:48):
Look, I just focus on what National can do to
put forward the best proposals to the New Zealand public
so we can win their votes. My position is always
the same. A vote for National is a much more
effective vote than a vote for New Zealand. First, always
has been, always will be.
Speaker 1 (05:03):
Do you fly on a Monday?
Speaker 2 (05:06):
I have done from time to time. I didn't this Monday.
Speaker 1 (05:09):
Are you flying next Monday with when the Air New
Zealand cabin strike is on?
Speaker 2 (05:13):
No, because that's a cabinet day.
Speaker 1 (05:15):
Oh thank god, lucky you how are you feeling about
Air New Zealand at the moment as the shareholding minister.
Speaker 2 (05:22):
Well, I think, like most New Zealanders, I want to
see them improving their performance wherever they can. And for me,
there's three kind of things they need to balance. On
the one hand, they need to make sure that they're
offering affordable flights to New Zealanders so they can see
their friends and family and enjoy this country. Two, they
need to be making sure they're getting a return on
(05:44):
capital that taxpayers have a big share of and so
they're driving profitability and productivity. And three they need to
be really good corporate citizens and support our economy to grow.
And there's no secret they have struggled in recent years
when it comes to their commercial performance.
Speaker 1 (06:02):
Yeah, I'm not loving them at the moment. Now what
do you think of Roger Gray and him saying that
we're called now Zealand.
Speaker 2 (06:09):
Well, I think he is on to something. If you
look across many of the issues that have held our
country back, it has been giving too many people veto
power to say no to sensible things, whether that's eden
park concerts, whether that's consens for new housing, whether that's
permission to start a new mind. Those are the things
that actually drive an economy forward and create wealth, and
(06:32):
New Zealand needs to get much better at saying yes
to them. It's even stuff like the people who moan
about tourists coming to New Zealand. Guess what those tourists
bring passion, They create jobs, they create incomes. So we
need to say yes more often.
Speaker 1 (06:46):
So love it.
Speaker 2 (06:46):
I like what he had to say.
Speaker 1 (06:48):
Brilliant. Hey, thank you, Nicole. I appreciate it. Nichola Willis,
Finance Minister.
Speaker 2 (06:51):
For more from Heather duplessy Ellen Drive, listen live to
news talks they'd be from four pm weekdays, or follow
the podcast on iHeartRadio
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