Christopher Luxon says the Government will be acting on the Commerce Commission's final report on the banking sector.
The watchdog's final report is due out about 8.30am.
In its draft report, published in May, it found the sector was lacking competition, and recommended changes to allow Kiwibank to grow bigger and to allow smaller banks to compete better.
The Prime Minister told Mike Hosking that Finance Minister Nicola Willis has a plan on how to respond to the final report.
And education was a focus for Luxon in yesterday's address at the annual coronation celebrations for the Kīngitanga.
In a heated powhiri at Ngaruawahia's Turangawaewae Marae, kaumatua and party leaders addressed Government policies affecting Māori, and in the ACT Party's absence, its Treaty Principles Bill loomed large.
The Prime Minister wants Māori to excel economically in New Zealand, which starts with education.
He says this should be a country where Māori are better educated and can access better paying jobs, and can have faster access to medical help when they need it.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Tuesday morning, Prime Minister Christopher Luxe well us, very good
morning to you.
Speaker 2 (00:03):
Morning.
Speaker 1 (00:04):
Mike brad Olsen's done some numbers on the amount of
productivity lost when we close the Harbor Bridge because it's blowy,
and he points out that there are still people being
paid seventy five thousand dollars a week to work on
an option to replace or replicate the bridge. Is that true?
Speaker 2 (00:24):
I'm not aware of that. I know Samon Brown's talked
about a second crossing, which is important, but it's part
of our broader infrastructure thematic, which is the saying, look,
you know, you get massive productivity gains out of actually
building stuff and getting roads built, and that's a good thing.
So yep, I understand the bridge is at capacity. Yes,
we have to get a replacement in place, whether it's
another bridge, where it's another tunnel. You know, those are
(00:46):
options that I know something's got on this plan to
look through.
Speaker 1 (00:48):
Would it bother you if you're paying seventy five thousand
dollars a week to people looking into this.
Speaker 2 (00:54):
It's not something I'm aware of. But nothing surprising me
in government as to what people have been working on
and what they still continue to work on. So we
are working very hard to keep everyone very focused, but
I'm just not aware of that, Mike. To be honest,
I can't comment in more.
Speaker 1 (01:06):
Dot com report that's out at eight thirty this morning
on banking. Have you seen it.
Speaker 2 (01:12):
I've got a sense of some of the highlights on it.
But our point is, as you know from before, is
that we want to see much more composition in the
backing market. There's high levels of profitability. I think, you know.
I'm hoping there'll be some good things out of there,
that we've got some good actions up and running in
a way around. But obviously Nikola and Andrew Bailey and
we'll talk more to that later on when it's really available.
Speaker 1 (01:33):
So just give us the sense of this. Have they
said what you thought? I mean, I'm assuming they're saying
basically what they said in the preparatory report. Will you
be doing something about it?
Speaker 2 (01:44):
Yes? Absolutely, I mean, as you know, we've been wanting
to see this Commerce Commission report come back. As I
understand it, I haven't read the report. It's about three
hundred and ninety pages. I think at this point, I
know Nikola has and has got a good sense of
what we need to do. And what we can respond
to immediately round it actually, which is important. But she'll
talk to that. And then also we've got our Select
(02:04):
Committee inquiries at the Finance and Expenditure Committee and also
the Rural Communities Rural CERI Committee as well, because we
are concerned about banking in the rural sector as much
as across the board. So look, there's major challenges in
the competition in the market, there's high levels of profitability,
and we want to make sure it's a much better
functioning banking sector. And we're quite serious about it, and
I think everyone understands how serious we are about it.
Speaker 1 (02:26):
In a year's time, will you be able to materially
show me a different banking marketplace in this country as
a result of your actions, Well, I will.
Speaker 2 (02:35):
Hope we will have put some serious interventions in place
that will be leading to that. As to whether individual
firms want to know more banking products are available, more
fintech products are available, what innovations available, more open banking,
all of those good things are happening. We want to
be well on the track to making sure that's exactly
the case. So I just can't underscore that, you know,
I'm very serious about the banking sector. I happening for
(02:56):
a long time, concerned about it. I know Nicola is
the same, and we're looking at the Commerce Commission will
look at our inquiries and we'll do whatever when we
need to do.
Speaker 1 (03:03):
Well Nikola talk about qu bank and it's shape and
form today.
Speaker 2 (03:08):
Well she might well talk to that, But again there's
three hundred ninety pages and I'll let her go through
the recommendations and what we are responding to. A lot
of it. You know, there's a lot of legatory stuff
that's got on the way. There's a you know, there's
a lot of open bankings andthing we've talked about for
a long time, but there's no real progress on that.
You know, that's the ability for people to move banks
when there's more competition, and that you know, people don't move.
(03:32):
They're pretty in nurse and they get locked into their
banks and don't seem to do that. So what else
twinies do to encourage that competition. But again, I'll let
her talk to that later on and stuff and then
have you.
Speaker 1 (03:40):
And we've seen Westpact just yesterday, and we've seen a
couple of banks in the last week, and we've seen
the Reserve Bank Act. Have you gotten to the bottom
in your mind of why the Australian Bank has a
profit margin in the ones and the New Zealand Bank.
In other words, the New Zealand branch of the Australian
Bank has a profit margin in the twos. And they
argue it's all on It's all all on Adrian or
(04:01):
he says it isn't do you or not?
Speaker 2 (04:04):
I don't, But that is what I'm concerned about, and
that's what I've been concerned about for some time. It's
the relative profitability at a per capital level. If I
look at the relative profitability of the banks in New
Zealand compared to other markets, I think we've got a problem.
And it doesn't know And yes we want strong banks
from recessionary times, but continued record profits is something that
(04:25):
and lack of competition is a serious problem. So you know,
let's see where we get to with the Commerce Commission today.
We'll then got to that'll and form a lot of
where the questioning goes, and the sleek committees that will
then drive a lot more of the action and plan
that we've got to make sure we get a much
more competitive, dynamic banking sector. But yes, that's exactly like.
That's one of the problems I've observed is you know,
(04:46):
the subsidiaries of Australian banks and they seem to have
high margins.
Speaker 1 (04:48):
Correct, despite the shocking misrepresentation of the polling numbers last
night on the State broadcaster, there are thirty seven percent
of people in this country who don't think your race
relations policy is making any difference at all. Ten percent
think they're improving it. So forty seven plays forty six.
Does that reassure you as you sat in the rain
yesterday being yelled at that maybe things you might.
Speaker 3 (05:09):
Be on the right track anyway, Well, look, I got
to say that that poll was no different from what
I saw a year or so ago under the previous
administration as well. So the bottom line, and I'm trying
to communicate very strongly and actually EWE leaders when I
meet with them individually understand this is that I'm more
interested and actually, what are we going to do about
the outcomes for Maori and non Malori kids. I mean,
(05:29):
when you look at housing, when you.
Speaker 2 (05:30):
Look at education, when you look at healthcare, and when
you look at incomes, you know, all of those conversations
are what we need to do. You know, when twelve
percent of Maori kids at the sender they need to
be at at the benchmark going into high school on mathematics,
we've got a problem, you know, when we've got a
distribush number of Maori families and emergency housing and yet
we're thankfully we've moved a thousand kids out of emergency
(05:53):
housing between April and July into a proper home because
they shouldn't be growing up on which I that's a
good stuff. That's improving outcomes when we're working on immunization
rates Rounder two with Mary, you know, that's that's what
it's about. So I'm focused on outcomes, and you know,
I'm over the you know, I don't think the last
six years was a fantastic time for Mary frankly, and
the results.
Speaker 1 (06:12):
That we're under and looking at what you were getting
yelled at yesterday, I look at to who You've thrown
them under the bus and you've run them over, And
I'm thinking to myself, even if he feels that way,
what's what's the point of that exchange? Where's that going?
Speaker 2 (06:26):
Well, I'm less hung on one it. I mean, you know,
it's important for me that we continue to engage, We
can be respectful, we can agree.
Speaker 1 (06:34):
Is yelling at you in the rain engaging or is
it just yelling at you and the rain?
Speaker 2 (06:39):
Well, look, if it helps everyone feel better, that's great.
I'm just all about making sure that we keep the
joint on track and we get it sorted. And I
just say, you know, a lot of the conversations I
have with ere leaders are actually at that next level
of actually, well, what are we going to do about housing?
And what are we doing about infrastructure? What are we
doing about health and education? So you know that's where
you know the conversation go on my private conversations with
(07:01):
many of them. Yep, there's frustration on the treaty principles.
Bell get that. I think you know, we've been very
clear about our relative positions on all of that. But
the real focus is, you know, when eighty eight percent
of kids are not willingly to be on maths and mighty,
that's a problem.
Speaker 1 (07:16):
When frankly, that trip to Sydney last week and the
big metro station opened yesterday, years overdue and billions of
dollars over mudget, what did you actually learn about building
stuff that we don't already know?
Speaker 2 (07:28):
In the country. Yeah, well we don't do it in
a very system. One of the big things, to be honest,
is in New South Wales. Might be at the premiere
there in twenty fourteen put in place something called Infrastructure
New South Wales and essentially what they do is they
have a bunch of people who go through and they
build out a proper thirty year pipeline, which is what
Chris Bishop and I've been talking about. But importantly they
(07:49):
then can prioritize those projects so if there is and
then the benefit of that is that when the political
cycles change, you're not in the ridiculous situation that we've
been in New Zealand, where you take a road people
is Cambridge to Piety and it's like on off on off,
on off, on off. Actually it's happening. The project happens.
It's a priority, and they're clear about the relative priority.
(08:10):
If there's more money available in the system, they know
what their next funding. If there's less money in the system,
they know what they have to defund and reprioritize. But
the idea is the politics are taken out of infrastructure
development and infrastructure's long term and I would love to
see that in New Zealand and with our short political
cycles and local government central government, the reality is you
need to have some of their mechanism and governance around that.
(08:31):
And that has worked really, really well, and so they
know what they're rolling into in the next fifteen to
twenty projects across the state, having done a bunch over
the last ten years or so as well. So yeah,
that was really good. I took Shane Jones, I took
Chris Bisher, I took some in Brown. I also sat
down with investors, hosted an investor lunch as I always do.
(08:52):
You know Australian super funds and other funds that want
to spend billions of dollars and ideally in New Zealand.
I want that money coming into the country. And we
talk about the frustrations that they have, the good, the
bad and the ugly of investing in New Zealand and
what either stops them or what other impediments are encountering.
And so you know, all of that was good for
my infrastructure ministers to get a feel of get out
(09:13):
of the bubble of New Zealand, see what good looks
like somewhere else in the world, and can we learn
from it. And apply it back home good stuff.
Speaker 1 (09:18):
Appreciate your time seeing ex Tuesday Christopher luxam Prime Minister.
Speaker 3 (09:22):
For more from the Mic Asking Breakfast Listen live to
news talks there'd be from six am weekdays, or follow
the podcast on iHeartRadio
Tuesday morning, Prime Minister Christopher Luxe well us, very good
morning to you.
Speaker 2 (00:03):
Morning.
Speaker 1 (00:04):
Mike brad Olsen's done some numbers on the amount of
productivity lost when we close the Harbor Bridge because it's blowy,
and he points out that there are still people being
paid seventy five thousand dollars a week to work on
an option to replace or replicate the bridge. Is that true?
Speaker 2 (00:24):
I'm not aware of that. I know Samon Brown's talked
about a second crossing, which is important, but it's part
of our broader infrastructure thematic, which is the saying, look,
you know, you get massive productivity gains out of actually
building stuff and getting roads built, and that's a good thing.
So yep, I understand the bridge is at capacity. Yes,
we have to get a replacement in place, whether it's
another bridge, where it's another tunnel. You know, those are
(00:46):
options that I know something's got on this plan to
look through.
Speaker 1 (00:48):
Would it bother you if you're paying seventy five thousand
dollars a week to people looking into this.
Speaker 2 (00:54):
It's not something I'm aware of. But nothing surprising me
in government as to what people have been working on
and what they still continue to work on. So we
are working very hard to keep everyone very focused, but
I'm just not aware of that, Mike. To be honest,
I can't comment in more.
Speaker 1 (01:06):
Dot com report that's out at eight thirty this morning
on banking. Have you seen it.
Speaker 2 (01:12):
I've got a sense of some of the highlights on it.
But our point is, as you know from before, is
that we want to see much more composition in the
backing market. There's high levels of profitability. I think, you know.
I'm hoping there'll be some good things out of there,
that we've got some good actions up and running in
a way around. But obviously Nikola and Andrew Bailey and
we'll talk more to that later on when it's really available.
Speaker 1 (01:33):
So just give us the sense of this. Have they
said what you thought? I mean, I'm assuming they're saying
basically what they said in the preparatory report. Will you
be doing something about it?
Speaker 2 (01:44):
Yes? Absolutely, I mean, as you know, we've been wanting
to see this Commerce Commission report come back. As I
understand it, I haven't read the report. It's about three
hundred and ninety pages. I think at this point, I
know Nikola has and has got a good sense of
what we need to do. And what we can respond
to immediately round it actually, which is important. But she'll
talk to that. And then also we've got our Select
(02:04):
Committee inquiries at the Finance and Expenditure Committee and also
the Rural Communities Rural CERI Committee as well, because we
are concerned about banking in the rural sector as much
as across the board. So look, there's major challenges in
the competition in the market, there's high levels of profitability,
and we want to make sure it's a much better
functioning banking sector. And we're quite serious about it, and
I think everyone understands how serious we are about it.
Speaker 1 (02:26):
In a year's time, will you be able to materially
show me a different banking marketplace in this country as
a result of your actions, Well, I will.
Speaker 2 (02:35):
Hope we will have put some serious interventions in place
that will be leading to that. As to whether individual
firms want to know more banking products are available, more
fintech products are available, what innovations available, more open banking,
all of those good things are happening. We want to
be well on the track to making sure that's exactly
the case. So I just can't underscore that, you know,
I'm very serious about the banking sector. I happening for
(02:56):
a long time, concerned about it. I know Nicola is
the same, and we're looking at the Commerce Commission will
look at our inquiries and we'll do whatever when we
need to do.
Speaker 1 (03:03):
Well Nikola talk about qu bank and it's shape and
form today.
Speaker 2 (03:08):
Well she might well talk to that, But again there's
three hundred ninety pages and I'll let her go through
the recommendations and what we are responding to. A lot
of it. You know, there's a lot of legatory stuff
that's got on the way. There's a you know, there's
a lot of open bankings andthing we've talked about for
a long time, but there's no real progress on that.
You know, that's the ability for people to move banks
when there's more competition, and that you know, people don't move.
(03:32):
They're pretty in nurse and they get locked into their
banks and don't seem to do that. So what else
twinies do to encourage that competition. But again, I'll let
her talk to that later on and stuff and then
have you.
Speaker 1 (03:40):
And we've seen Westpact just yesterday, and we've seen a
couple of banks in the last week, and we've seen
the Reserve Bank Act. Have you gotten to the bottom
in your mind of why the Australian Bank has a
profit margin in the ones and the New Zealand Bank.
In other words, the New Zealand branch of the Australian
Bank has a profit margin in the twos. And they
argue it's all on It's all all on Adrian or
(04:01):
he says it isn't do you or not?
Speaker 2 (04:04):
I don't, But that is what I'm concerned about, and
that's what I've been concerned about for some time. It's
the relative profitability at a per capital level. If I
look at the relative profitability of the banks in New
Zealand compared to other markets, I think we've got a problem.
And it doesn't know And yes we want strong banks
from recessionary times, but continued record profits is something that
(04:25):
and lack of competition is a serious problem. So you know,
let's see where we get to with the Commerce Commission today.
We'll then got to that'll and form a lot of
where the questioning goes, and the sleek committees that will
then drive a lot more of the action and plan
that we've got to make sure we get a much
more competitive, dynamic banking sector. But yes, that's exactly like.
That's one of the problems I've observed is you know,
(04:46):
the subsidiaries of Australian banks and they seem to have
high margins.
Speaker 1 (04:48):
Correct, despite the shocking misrepresentation of the polling numbers last
night on the State broadcaster, there are thirty seven percent
of people in this country who don't think your race
relations policy is making any difference at all. Ten percent
think they're improving it. So forty seven plays forty six.
Does that reassure you as you sat in the rain
yesterday being yelled at that maybe things you might.
Speaker 3 (05:09):
Be on the right track anyway, Well, look, I got
to say that that poll was no different from what
I saw a year or so ago under the previous
administration as well. So the bottom line, and I'm trying
to communicate very strongly and actually EWE leaders when I
meet with them individually understand this is that I'm more
interested and actually, what are we going to do about
the outcomes for Maori and non Malori kids. I mean,
(05:29):
when you look at housing, when you.
Speaker 2 (05:30):
Look at education, when you look at healthcare, and when
you look at incomes, you know, all of those conversations
are what we need to do. You know, when twelve
percent of Maori kids at the sender they need to
be at at the benchmark going into high school on mathematics,
we've got a problem, you know, when we've got a
distribush number of Maori families and emergency housing and yet
we're thankfully we've moved a thousand kids out of emergency
(05:53):
housing between April and July into a proper home because
they shouldn't be growing up on which I that's a
good stuff. That's improving outcomes when we're working on immunization
rates Rounder two with Mary, you know, that's that's what
it's about. So I'm focused on outcomes, and you know,
I'm over the you know, I don't think the last
six years was a fantastic time for Mary frankly, and
the results.
Speaker 1 (06:12):
That we're under and looking at what you were getting
yelled at yesterday, I look at to who You've thrown
them under the bus and you've run them over, And
I'm thinking to myself, even if he feels that way,
what's what's the point of that exchange? Where's that going?
Speaker 2 (06:26):
Well, I'm less hung on one it. I mean, you know,
it's important for me that we continue to engage, We
can be respectful, we can agree.
Speaker 1 (06:34):
Is yelling at you in the rain engaging or is
it just yelling at you and the rain?
Speaker 2 (06:39):
Well, look, if it helps everyone feel better, that's great.
I'm just all about making sure that we keep the
joint on track and we get it sorted. And I
just say, you know, a lot of the conversations I
have with ere leaders are actually at that next level
of actually, well, what are we going to do about housing?
And what are we doing about infrastructure? What are we
doing about health and education? So you know that's where
you know the conversation go on my private conversations with
(07:01):
many of them. Yep, there's frustration on the treaty principles.
Bell get that. I think you know, we've been very
clear about our relative positions on all of that. But
the real focus is, you know, when eighty eight percent
of kids are not willingly to be on maths and mighty,
that's a problem.
Speaker 1 (07:16):
When frankly, that trip to Sydney last week and the
big metro station opened yesterday, years overdue and billions of
dollars over mudget, what did you actually learn about building
stuff that we don't already know?
Speaker 2 (07:28):
In the country. Yeah, well we don't do it in
a very system. One of the big things, to be honest,
is in New South Wales. Might be at the premiere
there in twenty fourteen put in place something called Infrastructure
New South Wales and essentially what they do is they
have a bunch of people who go through and they
build out a proper thirty year pipeline, which is what
Chris Bishop and I've been talking about. But importantly they
(07:49):
then can prioritize those projects so if there is and
then the benefit of that is that when the political
cycles change, you're not in the ridiculous situation that we've
been in New Zealand, where you take a road people
is Cambridge to Piety and it's like on off on off,
on off, on off. Actually it's happening. The project happens.
It's a priority, and they're clear about the relative priority.
(08:10):
If there's more money available in the system, they know
what their next funding. If there's less money in the system,
they know what they have to defund and reprioritize. But
the idea is the politics are taken out of infrastructure
development and infrastructure's long term and I would love to
see that in New Zealand and with our short political
cycles and local government central government, the reality is you
need to have some of their mechanism and governance around that.
(08:31):
And that has worked really, really well, and so they
know what they're rolling into in the next fifteen to
twenty projects across the state, having done a bunch over
the last ten years or so as well. So yeah,
that was really good. I took Shane Jones, I took
Chris Bisher, I took some in Brown. I also sat
down with investors, hosted an investor lunch as I always do.
(08:52):
You know Australian super funds and other funds that want
to spend billions of dollars and ideally in New Zealand.
I want that money coming into the country. And we
talk about the frustrations that they have, the good, the
bad and the ugly of investing in New Zealand and
what either stops them or what other impediments are encountering.
And so you know, all of that was good for
my infrastructure ministers to get a feel of get out
(09:13):
of the bubble of New Zealand, see what good looks
like somewhere else in the world, and can we learn
from it. And apply it back home good stuff.
Speaker 1 (09:18):
Appreciate your time seeing ex Tuesday Christopher luxam Prime Minister.
Speaker 3 (09:22):
For more from the Mic Asking Breakfast Listen live to
news talks there'd be from six am weekdays, or follow
the podcast on iHeartRadio
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