The Finance Minister says the Budget "lolly scrambles" are well and truly a thing of the past.
The Government's cut its operating allowance by another $300 million to $2.1 billion.
Nicola Willis says Government ministers have been looking carefully for savings.
She told Mike Hosking they're having to be very careful about the choices they make.
Willis says they need to look for investments that drive growth, living standards, and affordability.
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Speaker 1 (00:00):
This fuel, travel, aviation, tourism, cutting services, all that sort
(00:05):
of stuff. So we'll get back into that after eight
o'clock meantime, at twenty three minutes away from it. You
can't say the government isn't trying to cut their cloth
in these war ridden, economically messy times. Can you mean?
The Prime Minister is part of this pre budget road
show yesterday revealed the operating allowance is now down to
two point one billion. Most of us thought it was
tied at two point four. Nicola Willis's charge with keeping
within the margins and she's with us morning.
Speaker 2 (00:25):
Good morning mate.
Speaker 1 (00:26):
How'd you land on the three hundred two point four
to two point one? Could it have been two hundred
or eight hundred and nine hundred? I mean, how did
it work?
Speaker 2 (00:33):
Well? I've always said that those operating allowances I signal
in advance are a ceiling, not a floor, And so
as we've been putting together the budget, we've always been
aiming to spend as little new money as possible. Everyone's
aware a bunch of stuff came at us from sideways
in the form of the fuel crisis, which has created
extra pressures for the government in terms of our need
(00:55):
to provide additional support to low income working families, the
need to put buffers aside for the extra fuel costs
across government. But we have worked very hard as a
group of ministers to identify, Okay, in these tough times
when the books could get a battering if we're not careful,
let's make sure we're looking for savings. And every government agency,
(01:17):
every government department, ministers have done a good job, and
those savings have allowed us to supplement what we can
invest so that we can meet the really important pressures
in the health system, making sure we're still rebuilding our
defense force, the priorities that really matter. And so ultimately
that's meant we've trimmed that operating allowance back to two
point one million billion, which makes billion, which makes real
(01:42):
sense in a time when I think getting the books
back in order is more important than ever. We're in
an uncertain world. No one owes us a living and
we can't just keep racking up dead on the credit card.
Speaker 1 (01:54):
No. It increasingly leaves you, though, with a reliance on
efficiencies and chair shuffling to problems, doesn't it, And that
becomes difficult.
Speaker 2 (02:03):
It means that we have to be very careful about
the choices we make, and gone are the days I
think when political campaigns will be about what new spending
program you can design to dish out more lolly in
a creative way. Where now in a time where the
task for sensible leaders is to say, what are the
(02:23):
investments required to drive the things that will support growth,
living standards and affordability into the future. And that's why,
of course we've made that decision. Actually, the fees free program,
it doesn't cut it in this new age. It's not
delivering results that is investment that should be made elsewhere
and things that really matter. And there have been choices
(02:44):
like that throughout this budget process.
Speaker 1 (02:46):
I get the you're not going to tell me, but
give me lux and gave it away. To a degree,
you're saving some of that money, so in other words,
you're not taking all of the fees free money and
sticking it in trades. You're saving some, are you saving
most or a bit?
Speaker 2 (02:59):
Well, some of it is supporting our ability to invest
in the health system and the education system in other areas,
and a portion of it will be used to support
trades training, which we think is critically important for getting
more young people into good jobs.
Speaker 1 (03:15):
But not all of it, no, I say, But my
argument is not that I disagree with you, because I don't.
But what's the difference between a government giving money to
an employer to train in a sparky versus the government
giving money to a university to train a doctor.
Speaker 2 (03:30):
Well wait and see the actual announcement, because the bit
I just highlight is it's not all about work pace training,
it's not all about apprenticeships. Actually, what happens in schools
is really important and out of you, and so that
is part of the policy announcement we're making due course.
Speaker 1 (03:47):
See the great contest of ideas interests me. So yesterday,
just yesterday Hipkins was saying you're not doing enough. And
that's all he's saying at the moment. Because he doesn't
have any other policies apart from the capital gains tax
and the three doctors' visits. At some point he's going
to have to say something tangible and specific. Do you
think he will or do you think he too has
worked out that we can't afford to.
Speaker 2 (04:09):
Well, he's made a commitment. But after the budget we'll
be hearing all of Labour's policies. But man, oh man,
he's got a dilemma on his hands because he's already
made commitments to a bunch of spending that I have
no idea how he'll fund without having to plunge us
into more debt. You know, restoring the gold plated pay
equity scheme, Well, there's billions of dollars there. He wants
(04:30):
to reverse all of the reprioritization we've made across the
public service and reinstate all of those people into the
back room bureaucracy. Well, that's going to cost a heck
of a lot of money. He's opposed every saving we've
ever delivered, So he's going to have his come to
Jesus moment because actually, you can't promise to spend money
on everything and then not rack up debt or more taxes.
(04:50):
So we know what their basic plans will be. More taxes,
more debt, more addiction to spending.
Speaker 1 (04:55):
Well, he will have looked to Albanezy who's doing exactly that,
and it seems to be popular and a lot of
us left to Australia to enjoy some of that large years.
So how do you counter that?
Speaker 2 (05:04):
Well, I think let's wait and see the juries out
on that one. I don't think it's ever popular to
say to an economy that is trying to recover, hey,
what we're going to do is slam you with more taxes.
And I think New Zealand needs to retain our competitive advantage,
which is that, unlike Australia, we haven't introduced capital gains
taxes and we want investment. We want people aspiring to
(05:28):
build new businesses to grow this economy. And Australia wants
to go down a different track. That's for them, But
I don't think that's a prescription that speaks to the
kind of vibrant economy we want New Zealand to be.
Speaker 1 (05:39):
Immigration numbers I think are out today. Have you seen them?
Speaker 2 (05:43):
I haven't seen them.
Speaker 1 (05:44):
Okay, because I think the brain drains over is my
summation from the last couple of reads, and that particular
problem that's partially solved. Do you think that's probably true?
Speaker 2 (05:54):
Yeah, that has been the trend that the number of
New Zealanders leaving permanently for overseas has been reducing in
each of the previous updates. In fact, it's at lower
levels now than it was when Chris Hopkins was Prime Minister.
And I think there's a couple of things there that
bode well for the future. The first is we all
care about affordability and the cost of living. Well, inflation
(06:15):
is the biggest marker of that, and of course inflation
in Australia is four point six it's three point one here,
so you know the cost of living is growing faster
over there. The second thing is housing affordability. As much
as I know homeowners listening are worried about their house price,
the other side of that has been that we've got
more first home buyers entering our market here than we
have in many, many years because buying a house has
(06:37):
become more affordable with lower interest rates. Well, the Ausies
have already hyped their rates three times, so in relative terms,
there are some real glimmers of hope and reasons to
stay in New Zealand.
Speaker 1 (06:47):
The Kiwibank thing is that a story do you reckon
in terms of asset sales?
Speaker 2 (06:52):
Well, I've been saying for years now I want Kiwibank
to grow. I want it to be bigger so it
can take on the comput edit a banks. But to
do that it will over time need access to more capital.
Speaker 1 (07:04):
It shouldn't that be your job, not not the private investor.
Speaker 2 (07:08):
Well, I think actually, if there are private investors who
want to help Kiwi Bank grow, throw their capital at
that while the government still has control over that entity,
that's a win win. In fact, key we save a
funds EU we having a stake in that asset is
something I think is positive for all concerns.
Speaker 1 (07:24):
Now that's your argument. Why don't you say it for
Genesis then, or.
Speaker 2 (07:28):
Any the case of Genesis, We already do have that
arrangement nine percent more and Genesis is on the private market. Well,
in Kiwibank's case, it's quite different. One hundred percent of
the capital coming from the government, and I don't think
that that's necessarily the best way to grow it because
governments are always constrained in what they can invest. And
(07:50):
there's a there's a conger line of investors saying, hey,
I want to help kim Weibank grow that. So that's
a good little thing. Was it?
Speaker 1 (07:55):
What was it? Just just before we go got to
wrap it up? But what was that thing? Yesterday? Lux
is rolling about social cohesion? What's going on there? Is
he running this immigration bogey man argument this year? I
mean social cohesion. When you talk about social cohesion around
immigration at twenty four to twenty five thousand net gain
per year, there's no social cohesion problem.
Speaker 2 (08:12):
Why is he saying that because he's listening to New
Zealanders and what New Zealand is.
Speaker 1 (08:17):
Or a you're listening to xenophobes and racists.
Speaker 2 (08:20):
No, he's listening to people who are saying, look, I
get immigration. In fact, most of us have family members,
friends who were born overseas. That's very much the New
Zealand experience. Many of us have colleagues or employees whose
great skills were brought to the country from offshore. But
we're listening to New Zealanders who say, well, let's make
sure that immigration keeps working for us, that we're not
(08:43):
just bringing in people because businesses don't want to hire kiwis.
We should always make sure our employment policies focus on
kiwis that actually getting young people into work, getting people
off benefits as a priority, and that means immigration policy
does need to be targeted, it does need to be careful.
Let's not go down the path that Europe and the
UK did because look at all the problems that has created.
Speaker 1 (09:04):
Nick A little that's different, and you know it's on
boats and channels and people coming in illegally. We don't
have that problem.
Speaker 2 (09:10):
We don't have that problem and long may stay the case.
And I think what you're hearing from the Prime Minister
is that he thinks that that is an important control
that New Zealand has and that we should hold on
to it.
Speaker 1 (09:21):
Nice to talk to you as always, Nikola willis my
it's minister. Paul Spoonley's been quoted this morning and I've
got a lot of time for Paul Spoony. He says,
Luxon's talking about a problem that doesn't exist and heeds
one hundred percent correct. Read Prebble yesterday. Preble takes Seymour
to task which I thought was quite interesting around immigration,
given Preble's association with Active Course. So get into that today.
If you've got time for more from the my Casking Breakfast,
(09:43):
listen live to news talks that'd be from six am weekdays,
or follow the podcast on iHeartRadio.
This fuel, travel, aviation, tourism, cutting services, all that sort
(00:05):
of stuff. So we'll get back into that after eight
o'clock meantime, at twenty three minutes away from it. You
can't say the government isn't trying to cut their cloth
in these war ridden, economically messy times. Can you mean?
The Prime Minister is part of this pre budget road
show yesterday revealed the operating allowance is now down to
two point one billion. Most of us thought it was
tied at two point four. Nicola Willis's charge with keeping
within the margins and she's with us morning.
Speaker 2 (00:25):
Good morning mate.
Speaker 1 (00:26):
How'd you land on the three hundred two point four
to two point one? Could it have been two hundred
or eight hundred and nine hundred? I mean, how did
it work?
Speaker 2 (00:33):
Well? I've always said that those operating allowances I signal
in advance are a ceiling, not a floor, And so
as we've been putting together the budget, we've always been
aiming to spend as little new money as possible. Everyone's
aware a bunch of stuff came at us from sideways
in the form of the fuel crisis, which has created
extra pressures for the government in terms of our need
(00:55):
to provide additional support to low income working families, the
need to put buffers aside for the extra fuel costs
across government. But we have worked very hard as a
group of ministers to identify, Okay, in these tough times
when the books could get a battering if we're not careful,
let's make sure we're looking for savings. And every government agency,
(01:17):
every government department, ministers have done a good job, and
those savings have allowed us to supplement what we can
invest so that we can meet the really important pressures
in the health system, making sure we're still rebuilding our
defense force, the priorities that really matter. And so ultimately
that's meant we've trimmed that operating allowance back to two
point one million billion, which makes billion, which makes real
(01:42):
sense in a time when I think getting the books
back in order is more important than ever. We're in
an uncertain world. No one owes us a living and
we can't just keep racking up dead on the credit card.
Speaker 1 (01:54):
No. It increasingly leaves you, though, with a reliance on
efficiencies and chair shuffling to problems, doesn't it, And that
becomes difficult.
Speaker 2 (02:03):
It means that we have to be very careful about
the choices we make, and gone are the days I
think when political campaigns will be about what new spending
program you can design to dish out more lolly in
a creative way. Where now in a time where the
task for sensible leaders is to say, what are the
(02:23):
investments required to drive the things that will support growth,
living standards and affordability into the future. And that's why,
of course we've made that decision. Actually, the fees free program,
it doesn't cut it in this new age. It's not
delivering results that is investment that should be made elsewhere
and things that really matter. And there have been choices
(02:44):
like that throughout this budget process.
Speaker 1 (02:46):
I get the you're not going to tell me, but
give me lux and gave it away. To a degree,
you're saving some of that money, so in other words,
you're not taking all of the fees free money and
sticking it in trades. You're saving some, are you saving
most or a bit?
Speaker 2 (02:59):
Well, some of it is supporting our ability to invest
in the health system and the education system in other areas,
and a portion of it will be used to support
trades training, which we think is critically important for getting
more young people into good jobs.
Speaker 1 (03:15):
But not all of it, no, I say, But my
argument is not that I disagree with you, because I don't.
But what's the difference between a government giving money to
an employer to train in a sparky versus the government
giving money to a university to train a doctor.
Speaker 2 (03:30):
Well wait and see the actual announcement, because the bit
I just highlight is it's not all about work pace training,
it's not all about apprenticeships. Actually, what happens in schools
is really important and out of you, and so that
is part of the policy announcement we're making due course.
Speaker 1 (03:47):
See the great contest of ideas interests me. So yesterday,
just yesterday Hipkins was saying you're not doing enough. And
that's all he's saying at the moment. Because he doesn't
have any other policies apart from the capital gains tax
and the three doctors' visits. At some point he's going
to have to say something tangible and specific. Do you
think he will or do you think he too has
worked out that we can't afford to.
Speaker 2 (04:09):
Well, he's made a commitment. But after the budget we'll
be hearing all of Labour's policies. But man, oh man,
he's got a dilemma on his hands because he's already
made commitments to a bunch of spending that I have
no idea how he'll fund without having to plunge us
into more debt. You know, restoring the gold plated pay
equity scheme, Well, there's billions of dollars there. He wants
(04:30):
to reverse all of the reprioritization we've made across the
public service and reinstate all of those people into the
back room bureaucracy. Well, that's going to cost a heck
of a lot of money. He's opposed every saving we've
ever delivered, So he's going to have his come to
Jesus moment because actually, you can't promise to spend money
on everything and then not rack up debt or more taxes.
(04:50):
So we know what their basic plans will be. More taxes,
more debt, more addiction to spending.
Speaker 1 (04:55):
Well, he will have looked to Albanezy who's doing exactly that,
and it seems to be popular and a lot of
us left to Australia to enjoy some of that large years.
So how do you counter that?
Speaker 2 (05:04):
Well, I think let's wait and see the juries out
on that one. I don't think it's ever popular to
say to an economy that is trying to recover, hey,
what we're going to do is slam you with more taxes.
And I think New Zealand needs to retain our competitive advantage,
which is that, unlike Australia, we haven't introduced capital gains
taxes and we want investment. We want people aspiring to
(05:28):
build new businesses to grow this economy. And Australia wants
to go down a different track. That's for them, But
I don't think that's a prescription that speaks to the
kind of vibrant economy we want New Zealand to be.
Speaker 1 (05:39):
Immigration numbers I think are out today. Have you seen them?
Speaker 2 (05:43):
I haven't seen them.
Speaker 1 (05:44):
Okay, because I think the brain drains over is my
summation from the last couple of reads, and that particular
problem that's partially solved. Do you think that's probably true?
Speaker 2 (05:54):
Yeah, that has been the trend that the number of
New Zealanders leaving permanently for overseas has been reducing in
each of the previous updates. In fact, it's at lower
levels now than it was when Chris Hopkins was Prime Minister.
And I think there's a couple of things there that
bode well for the future. The first is we all
care about affordability and the cost of living. Well, inflation
(06:15):
is the biggest marker of that, and of course inflation
in Australia is four point six it's three point one here,
so you know the cost of living is growing faster
over there. The second thing is housing affordability. As much
as I know homeowners listening are worried about their house price,
the other side of that has been that we've got
more first home buyers entering our market here than we
have in many, many years because buying a house has
(06:37):
become more affordable with lower interest rates. Well, the Ausies
have already hyped their rates three times, so in relative terms,
there are some real glimmers of hope and reasons to
stay in New Zealand.
Speaker 1 (06:47):
The Kiwibank thing is that a story do you reckon
in terms of asset sales?
Speaker 2 (06:52):
Well, I've been saying for years now I want Kiwibank
to grow. I want it to be bigger so it
can take on the comput edit a banks. But to
do that it will over time need access to more capital.
Speaker 1 (07:04):
It shouldn't that be your job, not not the private investor.
Speaker 2 (07:08):
Well, I think actually, if there are private investors who
want to help Kiwi Bank grow, throw their capital at
that while the government still has control over that entity,
that's a win win. In fact, key we save a
funds EU we having a stake in that asset is
something I think is positive for all concerns.
Speaker 1 (07:24):
Now that's your argument. Why don't you say it for
Genesis then, or.
Speaker 2 (07:28):
Any the case of Genesis, We already do have that
arrangement nine percent more and Genesis is on the private market. Well,
in Kiwibank's case, it's quite different. One hundred percent of
the capital coming from the government, and I don't think
that that's necessarily the best way to grow it because
governments are always constrained in what they can invest. And
(07:50):
there's a there's a conger line of investors saying, hey,
I want to help kim Weibank grow that. So that's
a good little thing. Was it?
Speaker 1 (07:55):
What was it? Just just before we go got to
wrap it up? But what was that thing? Yesterday? Lux
is rolling about social cohesion? What's going on there? Is
he running this immigration bogey man argument this year? I
mean social cohesion. When you talk about social cohesion around
immigration at twenty four to twenty five thousand net gain
per year, there's no social cohesion problem.
Speaker 2 (08:12):
Why is he saying that because he's listening to New
Zealanders and what New Zealand is.
Speaker 1 (08:17):
Or a you're listening to xenophobes and racists.
Speaker 2 (08:20):
No, he's listening to people who are saying, look, I
get immigration. In fact, most of us have family members,
friends who were born overseas. That's very much the New
Zealand experience. Many of us have colleagues or employees whose
great skills were brought to the country from offshore. But
we're listening to New Zealanders who say, well, let's make
sure that immigration keeps working for us, that we're not
(08:43):
just bringing in people because businesses don't want to hire kiwis.
We should always make sure our employment policies focus on
kiwis that actually getting young people into work, getting people
off benefits as a priority, and that means immigration policy
does need to be targeted, it does need to be careful.
Let's not go down the path that Europe and the
UK did because look at all the problems that has created.
Speaker 1 (09:04):
Nick A little that's different, and you know it's on
boats and channels and people coming in illegally. We don't
have that problem.
Speaker 2 (09:10):
We don't have that problem and long may stay the case.
And I think what you're hearing from the Prime Minister
is that he thinks that that is an important control
that New Zealand has and that we should hold on
to it.
Speaker 1 (09:21):
Nice to talk to you as always, Nikola willis my
it's minister. Paul Spoonley's been quoted this morning and I've
got a lot of time for Paul Spoony. He says,
Luxon's talking about a problem that doesn't exist and heeds
one hundred percent correct. Read Prebble yesterday. Preble takes Seymour
to task which I thought was quite interesting around immigration,
given Preble's association with Active Course. So get into that today.
If you've got time for more from the my Casking Breakfast,
(09:43):
listen live to news talks that'd be from six am weekdays,
or follow the podcast on iHeartRadio.
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