Nicola Willis: Finance Minister on the end of fees-free study

Finance Minister Nicola Willis has backed the decision to scrap the fees-free scheme for good.

Last week, Winston Peters revealed to Newstalk ZB on Friday the Government's doing away with the free final year of tertiary education.

Nicola Willis says it's important for the Government to invest in things that Kiwis really need and want - not a failed policy that didn't achieve any of the goals it aimed to accomplish.

"New Zealand has been in deficit since 2019, we're carrying a heck of a lot of debt, we've got some real priorities for our budget in terms of the health system, the education we want to give our young kids, the defence system we want to build up, the infrastructure we want to build - all of those things have a better call on money." 

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Episode Transcript

Speaker 1 (00:00):
Than Nicholau Wullis's finance ministers with US high Nikola Hi, Heather,

(00:04):
so is this year the last year of fees free?

Speaker 2 (00:07):
Yes?

Speaker 1 (00:08):
Why'd you change your mind on it?

Speaker 2 (00:11):
Well, Heather, as my grandmother always said, if at first
you don't succeed, try try and try again. Success is
the reward for the persistent. And while at first Winston
Peters and New Zealand first could not be persuaded to
drop their coalition commitment, ultimately wisdom prevailed and those are
dollars that are best invested and the things that New

(00:33):
Zealanders really need and want, not a failed policy that
didn't achieve any of the goals it set out to achieve.

Speaker 1 (00:40):
Okay, So are you saying that you have for the
last two and a half years been trying to convince
them and you've finally been able.

Speaker 2 (00:45):
To Well, you'll remember you interviewed me and said, well,
why don't you go and talk to Winston about that?
And I did, and at first I wasn't successful, but
we continued that conversation on and Winston like me, like
you can see that New Zealand has been in deficit
since twenty nineteen. We're carrying a heck a lot of debt.

(01:07):
We've got some real priorities for our budget in terms
of the health system, the education we want to give
our young kids, the defense system that we want to
build up, the infrastructure we want to build, and all
of those things have a better call on money than
a scheme that hasn't lifted tertiary education, hasn't served the
most underprivilege and has altogether failed.

Speaker 1 (01:27):
Okay, how much money are we so was it? Did
you actually work out how much it costs? Three fifty
million year?

Speaker 2 (01:33):
So we originally made a saving in our first budget
by shifting it from the first year to the final year,
and the savings from getting rid of it altogether will
add up to around a billion dollars over the next
four years.

Speaker 1 (01:44):
It's about two fifty million year. And then is that
what you're pocketing or are you from that then taking
money and paying for the trades training.

Speaker 2 (01:52):
The way we budget is that we have core priorities
for New Zealanders, which include the fact we've got an
aging popup with growing health needs. We've got kids who
need to be educated. So all of our savings and
reprioritization help support those things. And yes, there will be
a specific budget announcement about us prioritizing trades training, which

(02:15):
actually is a really really fruitful path that we want
to see more young people going down that leads to
fantastic jobs.

Speaker 1 (02:23):
Which you've been into the same thing, skill shortages, same trouble.
We're Weld's are going to do the trades training anyway,
and throwing money at it is not going to enlift enrollments.

Speaker 2 (02:32):
Heather, I'm not going to be falling into the same
trap that Winston did by pre announcing a budget announcement.
But I'm looking forward to making an announcement about what
we're going to do right trade now.

Speaker 1 (02:42):
One of the things out of the OECD report that
came out last last week was the suggestion that what
we should do is run a government run form of
generation electricity generation right and then flood the market to
bring the prices down. Would we consider that.

Speaker 2 (02:56):
Well, we already of course have a heavy, significant tech
power investment in the electricity market with our shares of
the mixed ownership model Generation Company, So we already have
that investment, and your recall, I've already pre announced that
we're apping our equity stake and Genesis energy to ensure
that they can provide the firming coal and gas capacity

(03:17):
needed when the hydro lakes are running low and the
sun's not shining and the wind's not blowing. So the
government is playing a role in the market already.

Speaker 1 (03:26):
Okay, so a separate because this is an idea that
is starting to float around, a separate idea that's perhaps
run by transpower that can flood the market to bring
down wholesale prices when they're too high. You're not going
to do that.

Speaker 2 (03:37):
Well, what there is a lot of discussion about, and
in fact there is an ongoing work program, is ensuring
that there's what's called a firming market. So that is
making sure that if you come and you build a
wind farm, you can be guaranteed to buy affordable contract
for firming electricity, so you can say to your customer,
it doesn't matter if the sun's not shining, I'll still

(03:57):
be able to provide you electricity come what ever weather
may come. And making sure that that market operates that
those firm and contracts can be purchased by the existing
gentailors is something that we are continuing with.

Speaker 1 (04:10):
The Other idea is that you force the gentailors to
drop the dividends they pay you, would you consider.

Speaker 2 (04:14):
That, well, that's cutting off your nose despite your face,
because then the question becomes, how are you going to
make sure you've got the funding for health and education
that every one of those dollars goes towards. Right now, now,
that shouldn't be that the gentailors are making excessive profits,
and there is clear regulation in place to do that,

(04:35):
and we do want to see the market being properly competitive.
But if you break down the increases in electricity prices
in recent times, the major driver has been the cost
of the extra transmission lines and towers being put in.

Speaker 1 (04:49):
When you talk about superannuation changes, are you talking about
lifting the pension age or doing means testing?

Speaker 2 (04:55):
Well? We have to make it more affordable because it
is a growing share of everyone's tax dollar. We've gone
from a situation where there were seven workers for every
super inuitant to four workers.

Speaker 1 (05:08):
What are you talking about lifting or means testing?

Speaker 2 (05:11):
Well? We will present a policy at the election that
is all about making sure superannuation is sustainable, that it
is affordable, and that people can be sure about what
they're in touch and tore into the future.

Speaker 1 (05:24):
It won't happen because the problem here is that New
Zealand first isn't going to say yes and help you.
And then if you reach across the aisle to labor,
they're not going to say yes either.

Speaker 2 (05:32):
Unless the beginning of this let's go back to the
beginning of this interview. I persuaded Winston Peters on fees,
free now and.

Speaker 1 (05:43):
Knowledge. But this is his core vote. It's the oldiest.
He's not going to touch the pension.

Speaker 2 (05:47):
Actually, give Winston Peters some credit. He came into New
Zealand politics wanting to make this country better for all.
In a situation in which our superannuation bill becomes so
unaffordable that taxes on every working person need to be
increased dramatically to pay for it, where dollars are robbed

(06:09):
from our cree the legic came.

Speaker 1 (06:10):
But he's been consistent on the pension all of this.

Speaker 2 (06:13):
Well, I've been I have been successful and convincing him
of my logic in the past. And as my grandmother said,
is I quoted to you at the beginning, At first
you don't succeed, try try and try again.

Speaker 1 (06:24):
Well, hoping for Winston Peters to get us out of
structural deficit. I think on that is probably hoping a
bit too much. Listen, are you making any decisions or
any announcements about banks in the budget?

Speaker 2 (06:34):
Well, I don't make my budget announcements on the Heatherdo
plus Allen Show. But I have to say you did
a magnificent job of heathering Winston last week, so I
can see why you're giving it a try again tonight.

Speaker 1 (06:46):
No banking, Levy.

Speaker 2 (06:48):
I'm not going to tell you about what's in the
budget or what's not in the budget, because when I
start the rule and rule out game, it never ends.

Speaker 1 (06:54):
Okay, Nichola, thank you you got away with that on
it because you made me feel so wonderful about myself.
Nichola willis find out its minister for more from hither
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