Ruth Richardson: Former finance minister says Nicola Willis needs to 'face up' to the latest Treasury report

A Treasury report has pointed out that government spending is still near its peak during the pandemic. 

This comes after finance minister Nicola Willis said her government won’t repeat the previous government’s mistakes. 

Former finance minister Ruth Richardson told Heather duPlessis-Allan that ‘[Nicola Willis] needs to face up to what the Treasury is telling her.’ 

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Episode Transcript

Speaker 1 (00:00):
Finance Minister Nichola Willis is defending her spending habits after
Treasury pointed out that five years on from the beginning
of the pandemic, spending is still close to its pandemic
era peak. Nikola Willis old Ryan Bridge on early edition
this morning that her government will not repeat you into
Ardurn's mistakes.

Speaker 2 (00:14):
Cross our Fair's two budgets. We have already delivered forty
four billion dollars worth of savings. Now it is correct
that we have put a lot of those savings back
into the system into education.

Speaker 1 (00:27):
I think government's still just as big, right.

Speaker 2 (00:29):
No, it is not just as big.

Speaker 1 (00:31):
And Ruth Richardson is the former Finance minister and current
chair of the Taxpayers.

Speaker 3 (00:35):
Union with us evening, Ruth, good evening.

Speaker 1 (00:37):
You don't agree with Nichola, do you?

Speaker 3 (00:40):
No? I do not. And she needs to face up
to what Treasury is killing her. This report is one
of home truths and hard decisions. Treasury is saying to
her from the rooftop, shouting firefire. A fiscal position is
not sustainable. We face greater pressure on the fiscal position
than we have in the last twenty years. Higher starting

(01:00):
debt levels, less favorable interest rates and growth trends, long
term for school pressures such as population aging and climate change,
and demands on government service provision and public investment. Now
they bottom line is they say successive governments must deliver
operating surpluses, maintain borrowing capacity, prioritize high value capital projects,

(01:25):
and lift economic growth to rebuild our fiscal sustainability. We're
doing none of those things.

Speaker 1 (01:31):
What would you do if you were in her position?

Speaker 3 (01:34):
Well, I think it's pretty clear she's got to do
three things. First of all, she has to take stock
of the public expenditure freight train. She says she's saved
all that about of made. She just plowed it back in.
That's spending by any other name. I think that Nikola
needs to do in Erica, Erica gets top marks. She

(01:55):
shine what it takes to get your hands around a
problem and deal with it at a fundamental level. I
think Nichola should follow suit. So instead of worrying about
the price of butter, she should be worrying about debt
and deficits. Start running some surpluses, and look at the
way in which she can immediately pay down debt and

(02:15):
deal then to the environment in which we're going to
get some decent growth, which we don't have.

Speaker 1 (02:20):
I agree with everything that you have said, Ruth, but
what I want to know is why doesn't Nicholas a
smart woman? Why doesn't she do it? Is she out
of depth in finance or is she simply making some
calculated choices to get re elected.

Speaker 3 (02:34):
Well, the Treasury is very clear about what the choices
are that you have to make, and when you're them
in a store of finance, you've got to be the
hard man and you've got to take the decisions. You
should be the one that's saying to the cabinet, right,
we need to take stock here. You know, it's the
economy stupid. They are drowning electorally. So what they're doing

(02:54):
now tiptoeing around the problems not working electorally, so they
might as well start dealing with them at the economic level.
And at the economic level, the choices are very clear. Indeed,
we're spending too much, our debt is too high, our
growth is too low, and when we face all the
headwinds that we do internationally, we are not in good

(03:15):
shape as a country to be. We're vulnerable and we
have to take stock. As I say that Nicholas should
do in Erica.

Speaker 1 (03:24):
Yep, I agree with you. Okay, what do you make
though of the argument that you have to be countercyclical? Right,
so if we're in recession as we are, then the
government has to spend.

Speaker 3 (03:34):
No, I don't agree with that. They go through this
argument of what's pro cyclical and countercyclical. We had two episodes.
I was part of one. The economy had been in recession.
I knew that what we needed to do to get
growth was dramatically control public spending, free up the economy,
and within short order we had the most dramatic reduction

(03:55):
of debt and growth in jobs and in the economy.
On the contrary, Robertson and Crewe, they decided they'd be
pro sixtical and they would spend and splurge, an explosion
of public money at the very time when the economy
didn't want it. And what have we got as a
legacy low growth, high debt, and a hangover. Now that's

(04:16):
all history. We've got to deal with the situation we
face now, the worst fiscal position for twenty years. That
has to be dealt with now. Now people will say
it's the economy stupid. I would, but then Nikola would say, well,
it's the electoral system stupid. But as I read it,
the leaders of the ACT Party, the leaders of New

(04:37):
Zealand first the Deputy Finance Minister Christ Biship, they are
all singing from the same song sheet, which is hey,
Christ of a leux and Nikola willis we've got to
get our hands around this, show the country we mean
to face up to the problem and deal with it.

Speaker 1 (04:51):
Ruth, thank you very much for the expertise appreciated. That's
Ruth Richardson, former Finance Minister, currently of the Taxpayers Union.
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