The Finance Minister is concerned about an expected spike in inflation.
The inflation rate has remained unchanged at 3.1% in the March quarter, despite forecasts of a drop.
ASB economists now expect it to approach 4.5% this quarter, remain above 4% until the end of the year, and remain above 3% until at least the middle of next year.
Nicola Willis told Mike Hosking there's no doubt inflation will rise this quarter.
She’s also refusing to name the five disgruntled National MPs that Christopher Luxon says are behind party leaks to the media.
Luxon's passed a vote of confidence at yesterday's lengthy caucus meeting, but MPs aren't revealing details of the vote, including how many of them supported Luxon.
Newstalk ZB understands the disgruntled MPs are Joseph Mooney, Andrew Bayley, Sam Uffindell, Barbara Kuriger, and Tim van de Molen.
Willis told Hosking she won’t throw colleagues under the bus without evidence.
She says each of the five have said they haven't leaked to the media and support a unified caucus.
LISTEN ABOVE
See omnystudio.com/listener for privacy information.
Listen
Watch
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
So to the economy and inflation for the opening chapter
of the year. It was a miss, but not badly.
Three point one steady zero point nine, not the expected
zero point eight. Some sense this may mean the may
predictions of a cash rate might be real, then they
might have been with a lesser number anyway, Finance Minister
Nicola willis with this morning. Good morning mate, So the
inflation number yesterday was a miss given what comes next,
(00:21):
presumably does it worry you?
Speaker 2 (00:24):
Not particularly? But what I am worried about is how
high inflation will go in the next quarter, because obviously
it's the next quarter that takes into account the massive
increase and the oil price and the putrol and diesel price.
In New Zealand, we have the Reserve Bank forecasting it
at four point two percent, which is well outside of
band and we're yet to see what that figure is.
(00:45):
But that's the quarter that I'm particularly worried about.
Speaker 1 (00:47):
Can you see through it?
Speaker 2 (00:49):
Well? The Reserve Bank and other central banks around the
world have been advised that in the first instance, raising
the official cash rate won't of course deal to the prices,
so they also need to consider the demandffects on the
other side, which is that demand in other parts of
the economy is falling and the rule of farmbers do
look through it, but be very alert to secondary inflation effects,
(01:10):
which is to say, people's expectations of future inflation rising
and that getting into your core inflation rates. So they'll
be watching all of that. Yeah.
Speaker 1 (01:18):
Indeed, so the usual suspects out of yesterday's number, rates
and power, which is sort of to the war, but
nothing to do with the war. I mean rates are
going up and powers going up. We don't seem to
be able to contain that. So what do we do.
Speaker 2 (01:29):
Well, that's why our government is introducing legislation to cap
rates because it has been out of control and we
need to do something about it now. Opponents in Parliament
oppose that the Labor Party wants rates to keep rising forever.
We're not content with that. That's bad for rate payers
and it's bad for inflation. In New Zealand. In terms
of electricity, that reflects regulated price increases, particularly relating to transmission.
(01:55):
The reality is we're electrifying as an economy. We're investing
a lot more in generation. There is a lot more
electricity transmission being built. It's a regulated formula and we
are still seeing that effect in prices.
Speaker 1 (02:06):
All right, let's go through Q two and play my
game that I've played with everyone so far. I'm bullish
on this. I'm optimistic the war will not restart. A
deal of some sort will be done. The straight in
some way, shape or form will open. If that happens,
when do we go back to normal? Do you think?
Speaker 2 (02:23):
Well? I think that means that by the third quarter
we would be in a position where we had lost
that inflationary pressure coming from the high and elevated oil price,
And so what you'd see is a blip in quarter
two and then things are sorting themselves out in quarter three.
So the big question for everyone is when does all
of this peak? Is it in the June quarter or
(02:43):
is it in the September quarter? And the sooner it ends,
the more likely it is that we're already in the
peak quarter.
Speaker 1 (02:48):
Now here's a fun question for you. If it is
in Q two and it is over, has it been
worth it? If Iran is neutralized?
Speaker 2 (02:57):
Look, for New Zealand's part, it's very difficult to say
that it's worth it. Actually, the world is poorer as
a result of this conflict. It has led to increasing prices,
a fuel disruption, and less growth than would otherwise be
the case. So it's very hard sitting down here in
our corner of the world to say we've benefited from it.
Speaker 1 (03:16):
Given what happened yesterday in your caucus. When you're in
Washington at the IMF, I'm assuming receiving some sort of
plaudits because their message the other day was extremely clear,
you can no longer everybody can no longer buy their
way out with debt, and we aren't so well done us.
Do you think you're getting the political capital out of
(03:37):
that decision or has that been missed by too many people.
Speaker 2 (03:40):
Well, I have faith in New Zealanders that ultimately they
will judge us on how we respond to this conflict,
and you are right. Our approach of temporary targeted supports
sticking to our fiscal constraints is absolutely what all of
the economists around the world are saying is the right approach.
You could have lifted the IMEF report translated to New
Zealand and said that we're the poster child for how
(04:02):
we should be responding economically to this conflict. I'm proud
of that national's record of responsible economic management is a
core part of why people vote for us, and I'm
going to make sure they have that reason to vote
for us at the election this year. And the alternative
is a Labor Green to Party Marty government that at
every turn will increase tax, will increase borrowing, and put
(04:24):
the strength of our economy at risk. That's what really
matters in this year's election.
Speaker 1 (04:28):
Are you mythed at what Peter said yesterday about you caucus?
Speaker 2 (04:32):
Ah? Look, I just expect that he's trying to get
as many votes for New Zealand First as he can
while also opposing the India FTA that will actually strengthen
our economy and standing for a range of policies that
I think wouldn't be good for New Zealand. So this
is just election year politics. He's trying to get his votes,
We're working to get ours. And I tell you what,
(04:52):
if you want strong, stable government, you want a strong
National Party at the heart of it. There's always the
risk with New Zealand First. It's a live risk that
they get into bed with Hipkins and Chloe Swailbrick and
the Greens. You got a bad recipe.
Speaker 1 (05:05):
Even though he's ruled it out with Hipkins leading.
Speaker 2 (05:08):
Yeah, well, I don't know what his game is. Would
he absolutely pledge his votes to National Well, let's wait
and see. I will never forget twenty seventeen when he
rejected Bill English and the stable National government that could
have been possible and made just under our Duran Prime Minister.
I will never forget that.
Speaker 1 (05:27):
Did the famous five get called out in the meeting yesterday?
Speaker 2 (05:31):
Look, I don't really want to cast aspersions on any
members of my caucus without evidence to support those aspersions.
Each of those individuals has expressed that they don't leak
to the media, that they haven't leaked to the media,
and that they want to support a unified caucus that
backs our leader. The caucus spoke yesterday. It was emphatic,
(05:51):
we're behind the Prime Minister. I'm drawing a line under it.
Speaker 1 (05:55):
Ah. Yeah. But the problem with that is that somebody
did leak and I know who it was and saying
they don't.
Speaker 2 (06:01):
Well, I don't know who it was, Mike, and so
you may know, but I don't, And I'm not in
the business of passing on rooms in gossip.
Speaker 1 (06:09):
Appreciate your time, Finance Minister Nichola Willison.
Speaker 2 (06:12):
For more from the mic asking Breakfast listen live to
news talks. It'd be from six am weekdays, or follow
the podcast on iHeartRadio
So to the economy and inflation for the opening chapter
of the year. It was a miss, but not badly.
Three point one steady zero point nine, not the expected
zero point eight. Some sense this may mean the may
predictions of a cash rate might be real, then they
might have been with a lesser number anyway, Finance Minister
Nicola willis with this morning. Good morning mate, So the
inflation number yesterday was a miss given what comes next,
(00:21):
presumably does it worry you?
Speaker 2 (00:24):
Not particularly? But what I am worried about is how
high inflation will go in the next quarter, because obviously
it's the next quarter that takes into account the massive
increase and the oil price and the putrol and diesel price.
In New Zealand, we have the Reserve Bank forecasting it
at four point two percent, which is well outside of
band and we're yet to see what that figure is.
(00:45):
But that's the quarter that I'm particularly worried about.
Speaker 1 (00:47):
Can you see through it?
Speaker 2 (00:49):
Well? The Reserve Bank and other central banks around the
world have been advised that in the first instance, raising
the official cash rate won't of course deal to the prices,
so they also need to consider the demandffects on the
other side, which is that demand in other parts of
the economy is falling and the rule of farmbers do
look through it, but be very alert to secondary inflation effects,
(01:10):
which is to say, people's expectations of future inflation rising
and that getting into your core inflation rates. So they'll
be watching all of that. Yeah.
Speaker 1 (01:18):
Indeed, so the usual suspects out of yesterday's number, rates
and power, which is sort of to the war, but
nothing to do with the war. I mean rates are
going up and powers going up. We don't seem to
be able to contain that. So what do we do.
Speaker 2 (01:29):
Well, that's why our government is introducing legislation to cap
rates because it has been out of control and we
need to do something about it now. Opponents in Parliament
oppose that the Labor Party wants rates to keep rising forever.
We're not content with that. That's bad for rate payers
and it's bad for inflation. In New Zealand. In terms
of electricity, that reflects regulated price increases, particularly relating to transmission.
(01:55):
The reality is we're electrifying as an economy. We're investing
a lot more in generation. There is a lot more
electricity transmission being built. It's a regulated formula and we
are still seeing that effect in prices.
Speaker 1 (02:06):
All right, let's go through Q two and play my
game that I've played with everyone so far. I'm bullish
on this. I'm optimistic the war will not restart. A
deal of some sort will be done. The straight in
some way, shape or form will open. If that happens,
when do we go back to normal? Do you think?
Speaker 2 (02:23):
Well? I think that means that by the third quarter
we would be in a position where we had lost
that inflationary pressure coming from the high and elevated oil price,
And so what you'd see is a blip in quarter
two and then things are sorting themselves out in quarter three.
So the big question for everyone is when does all
of this peak? Is it in the June quarter or
(02:43):
is it in the September quarter? And the sooner it ends,
the more likely it is that we're already in the
peak quarter.
Speaker 1 (02:48):
Now here's a fun question for you. If it is
in Q two and it is over, has it been
worth it? If Iran is neutralized?
Speaker 2 (02:57):
Look, for New Zealand's part, it's very difficult to say
that it's worth it. Actually, the world is poorer as
a result of this conflict. It has led to increasing prices,
a fuel disruption, and less growth than would otherwise be
the case. So it's very hard sitting down here in
our corner of the world to say we've benefited from it.
Speaker 1 (03:16):
Given what happened yesterday in your caucus. When you're in
Washington at the IMF, I'm assuming receiving some sort of
plaudits because their message the other day was extremely clear,
you can no longer everybody can no longer buy their
way out with debt, and we aren't so well done us.
Do you think you're getting the political capital out of
(03:37):
that decision or has that been missed by too many people.
Speaker 2 (03:40):
Well, I have faith in New Zealanders that ultimately they
will judge us on how we respond to this conflict,
and you are right. Our approach of temporary targeted supports
sticking to our fiscal constraints is absolutely what all of
the economists around the world are saying is the right approach.
You could have lifted the IMEF report translated to New
Zealand and said that we're the poster child for how
(04:02):
we should be responding economically to this conflict. I'm proud
of that national's record of responsible economic management is a
core part of why people vote for us, and I'm
going to make sure they have that reason to vote
for us at the election this year. And the alternative
is a Labor Green to Party Marty government that at
every turn will increase tax, will increase borrowing, and put
(04:24):
the strength of our economy at risk. That's what really
matters in this year's election.
Speaker 1 (04:28):
Are you mythed at what Peter said yesterday about you caucus?
Speaker 2 (04:32):
Ah? Look, I just expect that he's trying to get
as many votes for New Zealand First as he can
while also opposing the India FTA that will actually strengthen
our economy and standing for a range of policies that
I think wouldn't be good for New Zealand. So this
is just election year politics. He's trying to get his votes,
We're working to get ours. And I tell you what,
(04:52):
if you want strong, stable government, you want a strong
National Party at the heart of it. There's always the
risk with New Zealand First. It's a live risk that
they get into bed with Hipkins and Chloe Swailbrick and
the Greens. You got a bad recipe.
Speaker 1 (05:05):
Even though he's ruled it out with Hipkins leading.
Speaker 2 (05:08):
Yeah, well, I don't know what his game is. Would
he absolutely pledge his votes to National Well, let's wait
and see. I will never forget twenty seventeen when he
rejected Bill English and the stable National government that could
have been possible and made just under our Duran Prime Minister.
I will never forget that.
Speaker 1 (05:27):
Did the famous five get called out in the meeting yesterday?
Speaker 2 (05:31):
Look, I don't really want to cast aspersions on any
members of my caucus without evidence to support those aspersions.
Each of those individuals has expressed that they don't leak
to the media, that they haven't leaked to the media,
and that they want to support a unified caucus that
backs our leader. The caucus spoke yesterday. It was emphatic,
(05:51):
we're behind the Prime Minister. I'm drawing a line under it.
Speaker 1 (05:55):
Ah. Yeah. But the problem with that is that somebody
did leak and I know who it was and saying
they don't.
Speaker 2 (06:01):
Well, I don't know who it was, Mike, and so
you may know, but I don't, And I'm not in
the business of passing on rooms in gossip.
Speaker 1 (06:09):
Appreciate your time, Finance Minister Nichola Willison.
Speaker 2 (06:12):
For more from the mic asking Breakfast listen live to
news talks. It'd be from six am weekdays, or follow
the podcast on iHeartRadio
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
iHeartRadio 24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com