Episode Transcript
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Speaker 1 (00:00):
Monday morning is Prime Minister time and he is in
the studio once again with this good morning to you.
Can I just give you the smallest amount of advice
take it or leave it, But I'm here to help.
So I'm watching you yesterday at your railway crossing and what.
Speaker 2 (00:14):
A stand up that was.
Speaker 1 (00:15):
And so so I'm watching the railway crossing is down,
and I thinking to himself, So the boots I can
forgive you because you were a spade and I get it.
And you've got a nice pair of brogues. You don't
want to ruin those. So I get that high vers
ves seems.
Speaker 3 (00:24):
To be a thing.
Speaker 2 (00:25):
Jack it off.
Speaker 3 (00:26):
No, no, you can do all of that.
Speaker 1 (00:28):
But what's the safety glasses for? What was the problem
with the same What was going to happen with a space?
Speaker 2 (00:34):
I literally get there, I show up, I say hello
to some people, I get handed some stuff to put
on right, and I don't know. I guess maybe as
I put the shovel into the ground, were worried about
a stuff.
Speaker 1 (00:43):
And a stone clicking out. I just I thought, mate,
you're overly dressed for a space. Yes, driving a digger, yeah,
I'd get it.
Speaker 2 (00:50):
I think the I think the safety goggles with the
hard hats and the high versts on the test train
ride of the CRL was really quite something. So Winston
may have had a point about that.
Speaker 1 (00:59):
Okay, now the events Sadema I'm watching over the weekend
Saldema isn't the hotel chain said Auckland. And so you've
got this two speed economy and we'll come to the
Reserve Bank in a moment. So they're saying we are
desperate for events. If you have events, we will fill
hotel rooms. So I'm reading over the weekend, we've got
too many hotels in Auckland. We haven't gotten up in Queenstown.
Is there something that we need to do.
Speaker 2 (01:21):
Yeah, well that's the sort of thing that we're open
to looking at. And I know Louise Upston's thinking about
the Major Events Fund in particular because I agree with you.
I think that is something that is genuinely stimulating economic
activity versus rinkerdink you in this point when it's tough
in Auckland, there's a whole bunch of calls for the
stimulatory spending and doing stuff you can do crazy cost
of living payments like we saw under the last lot
(01:42):
or you can genuinely do things like that, and I
think we should rethink our whole major events. And you
need to because it's a pipeline of activity. You've actually
got to stuff it with things that may not pay
off just this month, but actually will pay off in
a year or two ahead as well. And you've got
a signal that. So I've asked for a total rethinker
on major events. The model that I looked at was
actually I spoke to about it before as Victoria under
(02:05):
Jeff Kennett. They had a major event every quarter, they
had medium events every month, they had micro events every week.
And that's the kind of thing that we've got to
really think about that major events.
Speaker 3 (02:14):
Are we thinking about it or we're doing it?
Speaker 2 (02:15):
No, we're doing it. So so Louise Upston as Tourism
and Hospitality and of us her to run the Major
Events Fund as well and think about what more we
can do in that space.
Speaker 1 (02:25):
So on Friday we get the banking inquiry. This is
cross party. There is no magic bullet. I've been trying
to say this long. This thing that Nicol has gotten
I think you've brought into as well, that there's some
sort of scam out there in the banking world clearly
is not true. They looked for a year to find something,
they couldn't find it.
Speaker 2 (02:38):
Yeah, look this, I mean they came out with nineteen recommendations.
Of course, a lot of it was pretty similar to
the fourteen that the Commerce Commission had done with their
market study. Yet we need more innovation open banking, you know,
get rid of some AML stuff that's constraining stuff. Again,
A big thing is really the Reserve Bank of New
Zealand's capital rules review, which is going on. They'll announce
(02:58):
where they are with their proposals to good which will
be good.
Speaker 3 (03:01):
You know what that announcement is.
Speaker 2 (03:03):
No, not really, but I know I've I got a
sense of where it'll go. But I haven't seen the
detail of the report or anything like that. But I
think you've seen people say, hey, lit, those settings are
way too conservative. Agreement that's actually drives up the cost
and it also costs risks for agricole exactly.
Speaker 1 (03:19):
The actual problem was Adrian or money for a rainy day.
We know banks are profitable. There isn't a problem. I mean,
you guys have overstoked. That's happened to you. There isn't
a scandal in the banking sector.
Speaker 2 (03:28):
No, but as a government we should make sure that
everything is the settings are as competitive as they possibly
can be. And genuinely, those are things like the open
banking piece of your ability to move your information and
accounts around the fact that banks when they're praising you
for a loan should have the same criteria. All those
things don't sound that sexy, but they all add up
to make a much more competitive setting. Obviously, we've got
(03:50):
the five hundred million dollar capital raise for Kiwibank. That's
up to four billion dollars, that creates four billion dollars
more lending, its ten billion dollars with a household lending.
That's actually quite material in terms of impact that it has.
Speaker 1 (04:01):
One analyst over the week and said that it just
makes another big bank. Nothing changes. So I mean nothing.
Speaker 3 (04:06):
I mean good on you. I don't mind.
Speaker 1 (04:07):
If they're big and they're successful, fantastic, Let them be successful.
But if there's no fundamental core problem with the industry
you tinkering with it doesn't actually change.
Speaker 3 (04:15):
It doesn't know.
Speaker 2 (04:16):
But when you've got fourteen things that have come out
of Commerce Commission, when youve got nineteen things that have
come out of a Slip Committee inquiry, and there are
some common sense things about regulatory settings that we can adjust.
We should do that. Obviously, Keewi Bank can get an
in capital. Obviously the Reserve Bank of New Zealand thinking
about its capital rules. All of that is very helpful, okay,
and we should. You know, our job is to make
sure the operating system is as competitive as it possibly
(04:38):
can be by each sector fair enough.
Speaker 1 (04:39):
And with the announcement today from the Reserve Bank, if
they don't curtail some of that money put aside for
a rainy day, you're not going to be a happy
prime minister.
Speaker 2 (04:46):
Correct, Correct? I mean I think the settings have been
too conservative, and I think that came through actually in
the Sleep Committee inquiry. When you look at agricultural lending,
for example, it's not just about the capital requirements. It's
also been about the risk assessment that they do as well, and.
Speaker 1 (05:01):
So can you can you instruct that because the argument
is that it's a greater risk lending to a farm
than it is to a Bloken pons and b downtown
buying their first house.
Speaker 3 (05:08):
Is that true or not in your view?
Speaker 2 (05:10):
Well, I mean it depends, But I mean I don't
think that. I think that's been one of the issues
that we've highlighted as hells and that doesn't all feel right.
It's set. I mean you're looking at look at the
royal economy at the moment, it's a pretty good place
to see receive.
Speaker 1 (05:22):
But the difference is with with the reserve money from
the Reserve Bank. That's a specific policy that the retail
banks have got to follow.
Speaker 2 (05:28):
They've got to hold more capital, which means they have
to pass that on with higher costs at higher interest rate.
Speaker 1 (05:33):
Seeing the rural community though, as a higher risk is
an approach from the retail bank, and that's an attitude.
You can't legislate or regulate attitude.
Speaker 2 (05:42):
Can you know that some of the capital rule settings
have actually led to them assessing risk very differently by
sector and some of that's not right. And so I
think you'll actually see a much I hope you'll see. Well,
I like to see is actually a much more pragmatic
you know.
Speaker 3 (05:56):
What's going to happen.
Speaker 2 (05:57):
Well, why do you tell me you don't know what's
going to happen when I haven't seen the report. But
I'm just saying I think all of us a number
of places. That's come from so many different places. Hey, listen,
these capital rules that were put in place by Robertson
and Awe actually have actually driven up interest rates in
high cost of ending. This it does need to be revisited.
Speaker 1 (06:15):
Speaking of the Reserve Bank, the other thing that was
fascinating last week was you were busy telling us what
a great day it was because Christine had done another
twenty five points. Why can't you? I know why you can't,
but why don't you because you must be tempted to
say what he really should have done is fifty when
he didn't do a damn thing, when he missed the
whole economy going backwards, and that was his job then,
and he's not doing his job properly.
Speaker 2 (06:36):
Yeah, well, I meet with him once before any of
those sort of announcements happened, and I can often give
my views in that case, but to do it, yep.
But that's me giving my reconds and my perspective. Which
but what was interesting was you would have seen they
published that actually two of the six four voter for
twenty five and he voted for fifty.
Speaker 1 (06:56):
You know, but that doesn't fix your problem? Is the
economy stall? Because he's not doing his part or they're
not doing their part.
Speaker 2 (07:04):
Yeah, well, I mean, yeah, well, I hear that frustration.
I get that, but these but it's also got two
more shots before Christmas. Son. Ye, you're too late. No,
I get may I get you. Do you agree with me?
Well I personally, yeah, I do, Yeah, I do, Yeah,
I do. I think And is that what you told
him in the meeting pretty much? Yep, right, So that's fine.
So I can give my views, but I respect the
(07:25):
independence of the Reserve under legislation.
Speaker 1 (07:27):
But you're the one who's going to lose your job
next year if the economy doesn't come right because some
people didn't do their job properly at the right time
because they couldn't see a contraction. How you're at the
Reserve Bank and you fail to see an economy going
backwards is beyond me.
Speaker 2 (07:42):
Yeah. We had very strong growth at the end of
last year, or it got stronger in the first quarter
of this year. We hit April Liberation Day, no doubt
about it. I reckon the economy is contracted over April, June, July, April, May, June, July,
we're now growing July August. The supporter will be growing again.
Speaker 1 (07:58):
You believe them, So you think you think Q three
is okay again?
Speaker 3 (08:01):
Four three better.
Speaker 2 (08:02):
I think Q two was probably contracted slightly. I think
Q three will be positive slightly and Q four is
looking really good. And if you look at that forecast,
you know they're still saying you're on track for two
point seven percent growth over the next average over the
next few years, the two forty thousand jobs.
Speaker 1 (08:16):
And do you know why I don't believe that, because
if we're on growth track for to owner, god, I
hope I'm wrong. If we're on track for two point
sent percent growth, we're outgrowing Australia.
Speaker 2 (08:26):
Yep.
Speaker 3 (08:27):
Yeah. So you don't look convinced either, do you You.
Speaker 2 (08:29):
No, No, I do no. I look at the Australian
budgets and you're looking at an Australian budget where they're
not in surplus for ten years. They're talking about a
one trillion to one point two trillion dollar deficit. You're
looking at a growth rate that is going to be
really comparable, if not ahead of where Australia is. That's
quite reasonable. So I mean, yeah, I get it, but
I think we actually have done a lot of the
right things that we had to deal with to sort
(08:51):
the medic to take our medicine, to deal with that
recession that was created artificially, that was worse than it
needed to be. I think we're doing the right things
for the long term, some of those RMA reform, educational reforms,
what we're doing on trade and investment. You know, our
exports are up seven to nine percent this year. You know,
there's a lot of good stuff going on in the economy,
and there's also signs that activities coming back to the
economy as well.
Speaker 1 (09:11):
Just real quick, the electricity authority who announced that investigation,
where were they last winter?
Speaker 3 (09:15):
In the winter before? Were they asleep?
Speaker 2 (09:17):
Well, we've had an almighty come to Jesus ch Since
last year, we've been a series of electricity meetings and
energy because we shouldn't have an electricity problem or an
energy crisis in New Zealand when we've got abundant natural resources,
you know. So, yeah, we put a strategic coal reserve
in place to make sure that I'm sorry, did you
put a rocket under the electricity authority? We've sufficed to say,
(09:40):
we've had a series of meetings in my office.
Speaker 1 (09:41):
Yeah, the only thing you can do to make me happy.
This morning is announced that foreign buyers are going to
be able to buy a house can.
Speaker 2 (09:45):
And it is coming so close. I'm telling you, Mike,
we weeks, how weeks away?
Speaker 3 (09:49):
How many two or three?
Speaker 2 (09:50):
It could be done? Two to three weeks, two to
three weeks. Do you know the date?
Speaker 3 (09:54):
Yes?
Speaker 2 (09:55):
I do.
Speaker 3 (09:55):
Is it announced on a Sunday?
Speaker 2 (09:57):
I will make sure you know him in advance only.
Speaker 3 (10:00):
I'm available now.
Speaker 2 (10:01):
I can't tell you now, but I tell you it's
coming besides.
Speaker 1 (10:04):
Christmas, but it's coming before Christmas.
Speaker 3 (10:08):
To see you.
Speaker 1 (10:09):
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