The Finance Minister has accused mayors and councillors of ignoring their bases when it comes to spending.
Speaking at Thursday's Local Government New Zealand conference on Wednesday, Chris Luxon told councils to tighten their belts and stop wasteful spending.
Nicola Willis says city and regional councils have lost touch with their ratepayers.
"For mayors and councillors, in some cases, to be so out of touch with that - is a real worry."
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
With us now as Nichola willis the finance mister Hannikeler, Hi,
you eather. Now, when you guys made the decision that
you would tell those mayors and counselors last week you'd
only give them money if they rained in their spending,
were you expecting the reaction you got?
Speaker 2 (00:13):
I didn't think that they would be so out of
touch with their rate payers. It really made me think,
have you not been listening to people? Because every second
person I come across in Wellington certainly is saying to me,
oh my gosh, have you got your rights bill yet?
It's frightening and so for mayors and counselors in some
cases to be so out of touch with that, and
(00:34):
a real worry.
Speaker 1 (00:35):
Do do you spend much time talking to mayors and
counselors a little bit?
Speaker 2 (00:40):
Because there are issues which are local issues and actually
we pass information between each other. Just the weekend I
had a counselor who came across someone who needs the
citizenship application, so he forwards that to me.
Speaker 1 (00:52):
Do you ever get talking about this? Because I always wont?
I also wondered when I saw this reaction with well,
how do you not know that this is how we feel.
What's the vibe you're getting from.
Speaker 2 (00:59):
The Well, it depends, doesn't it. They have different political
persuasions around a council table, and I think some of
us is a little bit of the center left center right.
Things that have people who as a general position, think
that you should be very careful with ratepayers or taxpayers money,
and you also have people who view that they've got
such magnificent ideas for how to spend it that we
(01:22):
should all listen up.
Speaker 1 (01:25):
Do you guys seriously mean to set a cap on
how much rates could go up by or is that
just a threat?
Speaker 2 (01:33):
Well, we are pretty serious. There's a few things that
we're doing. The first is that we're going to remove
the well being measures from the acts, which at the
moment is how they justify some of their spending. We
are looking into doing performance benchmarks so ratepayers have clear
information about how the local government entity is performing. And
then yes, we are exploring options to limit what councils
(01:56):
can spend their money on in the performance accountable things
like how much money they're spending the head of population
on basic services, how much money they're spending on various functions.
And then people can measure it up and say, oh,
why is my counsel putting so much money on that?
Or why have they got so many staff compared to
(02:17):
other councils, that sort of thing.
Speaker 1 (02:18):
SEEZ, that sounds like a big piece of work. How
long is that going to take?
Speaker 2 (02:22):
Well, it's something that Sam and Brown, our Minister for
Local Government, has said that he's going to go away
and explore where the Cabinet has said yes, please do so,
and he'll come back to us and you, of course fantastic.
Speaker 1 (02:32):
Now listen, have you had any word from the Reserve
Bank on the recommendations that affect them out of that
Commu's Commission Banking study last week?
Speaker 2 (02:41):
No, not yet, but I expect that I will engage
with them. I've got two pieces of work underway. One
is a rewrite of the Financial Policy Remits, which sets
the government's direction on how the Reserve Bank conducts its
functions there and I will work on that in consultation
what's the Reserve Bank? And then the second thing is
(03:02):
I'll be updating the expectations that I set to the
Reserve Bank. And one of the expectations are set as
I'll to hear how they intend to respond to the
recommendations from the comments.
Speaker 1 (03:13):
If they're not obliged to, are they.
Speaker 2 (03:17):
What they are obliged to do is make sure that
they meet the conditions of the policy remit we set.
Speaker 1 (03:24):
That's right, They're not obliged to listen to the ComCom.
But you are choosing to listen to the ComCom and
you can force the Reserve Bank's hand.
Speaker 2 (03:32):
Correct, We can make sure that they take it into account.
But also I can have a discussion with them here
if it becomes clear that they believe that the law
is precluding them from taking any particular actions, then we
can have a discussion about what amendments may be required.
But that may not be necessary.
Speaker 1 (03:50):
And are you planning to force their or are you
planning to have them implement everything that the Commons Commission
has suggested in those recommendations.
Speaker 2 (03:57):
Well, I'd like to at the very least here so
what their response is to each of those recommendations, because
I've read that report from cover to cover, and it
is very well argued, very coherent, and I think that
the issues that the Commics Commission have put forward deserve answers.
Speaker 1 (04:14):
Because I mean, if everything is followed here, we could
end up with them allowing more entities to become a bank,
and we could have more banks in this country as
a result.
Speaker 2 (04:22):
Yes, And the point that the Commics Commission make is why
can't someone call themselves a bank if they're providing banking services.
We need to be all precious about that word.
Speaker 1 (04:32):
No fair enough? Hey, how much more? I see you
guys have had to sign up a new contract for
the gas that schools and hospitals use for October this year.
How much more is that costing you?
Speaker 2 (04:42):
Well, that hasn't been finalized yet, but you're right, it'll
cost a lot more. It's now just under fifteen million
dollars across government and you'd expect it to be more.
It's then borne by individual agencies, so Healthy New Zealand
docks that defend thoughts and others, and you'd expect them.
They have to face that from within their existing budgets,
so they'll have to be trading off other things in
(05:03):
order to pay that more expensive price, just like every
household dealing with a high electricity.
Speaker 1 (05:08):
Do you know how much more expensive?
Speaker 2 (05:10):
Not yet? Oh?
Speaker 1 (05:11):
Are we talking double triple? You know? Just half on top.
Speaker 2 (05:16):
I'm not going to hazard again, but I think it
will be considerably.
Speaker 1 (05:18):
More and are we using method x gas again.
Speaker 2 (05:22):
I understand that that is the negotiation that is occurring.
Speaker 1 (05:27):
Okay, when do we find out about this? When is
this going to be signed?
Speaker 2 (05:31):
I understand that we will be finding out pretty shortly
as soon as it's signed, and we intend to be
transparent about it.
Speaker 1 (05:38):
How do you feel about the super Fund and ACC
investing in airbnbnbooking dot Com.
Speaker 2 (05:45):
Well, there's a really important principle for me here, which
is the super Fund, by law, makes their own investment decisions.
It has to do that consistent with a responsible investment framework.
But it's not for me as the minister to direct
them on individual investment decisions. They've themselves responded to this
(06:06):
issue and said, look, we don't think that this trigger
is an issue at this point. We've got really thorough
policies and processes here. And actually, when it comes to
companies like Airbnb, which is what this is about, they're
part of passive funds, we don't think it triggers the
need to put them on an exclusion list.
Speaker 1 (06:24):
No, And it sounds like so it sounds like the
un list that has been published here is really really
tough it really does go quite hard on businesses like this.
Why are we listening to these guys at the UN?
Do we need to stop?
Speaker 2 (06:37):
Well, in this case, I don't think that the super
fund is using the UN as their investment guide a nautable.
They they need to consider a range of things and
I'm satisfied that they do that.
Speaker 1 (06:49):
Nicola, are you up for selling land Corp?
Speaker 2 (06:53):
Well, as you know there is we've discussed on your
show before. The Prime Minister has committed we won't be
selling state owned enterprises term. However, we are looking at
the purpose behind every entity that we own and asking
ourselves is that achieving its purpose? Is it the best
use of taxpayer funds? And I can quite understand and
(07:15):
off the back of a big loss which that PAMU
Land Corps have posted, why some people will be asking
that question.
Speaker 1 (07:22):
And so if you're considering it, maybe for next term,
will Landcorp be on that list?
Speaker 2 (07:28):
Well, look, we are not going to get ahead of
ourselves at the moment. We're looking at why do we
own them? Are they living up to their purpose? Are
they performing well? And those are all questions which are
very relevant for Land Corp. Of course, I would note
some of those farms farms that might in future be
used in a treaty settlement. That's historically been one of
the reasons why the government has chosen to retain that portfolio.
(07:52):
But these are all questions that we're going through on
us calm rational.
Speaker 1 (07:55):
And how long before those treaty settlements are settled.
Speaker 2 (07:59):
Well, of course Minister Goldsmith is working to get them
all done as soon as possible.
Speaker 1 (08:03):
Okay, well we need him to hurry up, Nicola, thank
you appreciate it. Nichola willis our Finance ministy here. So
ACT is called ACT loves a little asset sale. And
you know what, so do I. I love an asset
sale if it's justified. I don't just love it for
the sake of it. If it's justified, and I suspect
that this may be a case if we should at
least consider it. ACT is calling for the sale of
Land Corp because it's reported a net loss after tax
(08:23):
of twenty six million dollars for the year ending thirty June.
I mean, seriously, it can't run a farm, so why
is it running farms? An independent review and found in
twenty twenty one found the organization failed to meet financial forecasts,
had high corporate costs, and invested in unprofitable or farm ventures.
Get rid of them. For more from Heather Duplasy Allen Drive.
(08:46):
Listen live to news talks it'd be from four pm weekdays,
or follow the podcast on iHeartRadio
With us now as Nichola willis the finance mister Hannikeler, Hi,
you eather. Now, when you guys made the decision that
you would tell those mayors and counselors last week you'd
only give them money if they rained in their spending,
were you expecting the reaction you got?
Speaker 2 (00:13):
I didn't think that they would be so out of
touch with their rate payers. It really made me think,
have you not been listening to people? Because every second
person I come across in Wellington certainly is saying to me,
oh my gosh, have you got your rights bill yet?
It's frightening and so for mayors and counselors in some
cases to be so out of touch with that, and
(00:34):
a real worry.
Speaker 1 (00:35):
Do do you spend much time talking to mayors and
counselors a little bit?
Speaker 2 (00:40):
Because there are issues which are local issues and actually
we pass information between each other. Just the weekend I
had a counselor who came across someone who needs the
citizenship application, so he forwards that to me.
Speaker 1 (00:52):
Do you ever get talking about this? Because I always wont?
I also wondered when I saw this reaction with well,
how do you not know that this is how we feel.
What's the vibe you're getting from.
Speaker 2 (00:59):
The Well, it depends, doesn't it. They have different political
persuasions around a council table, and I think some of
us is a little bit of the center left center right.
Things that have people who as a general position, think
that you should be very careful with ratepayers or taxpayers money,
and you also have people who view that they've got
such magnificent ideas for how to spend it that we
(01:22):
should all listen up.
Speaker 1 (01:25):
Do you guys seriously mean to set a cap on
how much rates could go up by or is that
just a threat?
Speaker 2 (01:33):
Well, we are pretty serious. There's a few things that
we're doing. The first is that we're going to remove
the well being measures from the acts, which at the
moment is how they justify some of their spending. We
are looking into doing performance benchmarks so ratepayers have clear
information about how the local government entity is performing. And
then yes, we are exploring options to limit what councils
(01:56):
can spend their money on in the performance accountable things
like how much money they're spending the head of population
on basic services, how much money they're spending on various functions.
And then people can measure it up and say, oh,
why is my counsel putting so much money on that?
Or why have they got so many staff compared to
(02:17):
other councils, that sort of thing.
Speaker 1 (02:18):
SEEZ, that sounds like a big piece of work. How
long is that going to take?
Speaker 2 (02:22):
Well, it's something that Sam and Brown, our Minister for
Local Government, has said that he's going to go away
and explore where the Cabinet has said yes, please do so,
and he'll come back to us and you, of course fantastic.
Speaker 1 (02:32):
Now listen, have you had any word from the Reserve
Bank on the recommendations that affect them out of that
Commu's Commission Banking study last week?
Speaker 2 (02:41):
No, not yet, but I expect that I will engage
with them. I've got two pieces of work underway. One
is a rewrite of the Financial Policy Remits, which sets
the government's direction on how the Reserve Bank conducts its
functions there and I will work on that in consultation
what's the Reserve Bank? And then the second thing is
(03:02):
I'll be updating the expectations that I set to the
Reserve Bank. And one of the expectations are set as
I'll to hear how they intend to respond to the
recommendations from the comments.
Speaker 1 (03:13):
If they're not obliged to, are they.
Speaker 2 (03:17):
What they are obliged to do is make sure that
they meet the conditions of the policy remit we set.
Speaker 1 (03:24):
That's right, They're not obliged to listen to the ComCom.
But you are choosing to listen to the ComCom and
you can force the Reserve Bank's hand.
Speaker 2 (03:32):
Correct, We can make sure that they take it into account.
But also I can have a discussion with them here
if it becomes clear that they believe that the law
is precluding them from taking any particular actions, then we
can have a discussion about what amendments may be required.
But that may not be necessary.
Speaker 1 (03:50):
And are you planning to force their or are you
planning to have them implement everything that the Commons Commission
has suggested in those recommendations.
Speaker 2 (03:57):
Well, I'd like to at the very least here so
what their response is to each of those recommendations, because
I've read that report from cover to cover, and it
is very well argued, very coherent, and I think that
the issues that the Commics Commission have put forward deserve answers.
Speaker 1 (04:14):
Because I mean, if everything is followed here, we could
end up with them allowing more entities to become a bank,
and we could have more banks in this country as
a result.
Speaker 2 (04:22):
Yes, And the point that the Commics Commission make is why
can't someone call themselves a bank if they're providing banking services.
We need to be all precious about that word.
Speaker 1 (04:32):
No fair enough? Hey, how much more? I see you
guys have had to sign up a new contract for
the gas that schools and hospitals use for October this year.
How much more is that costing you?
Speaker 2 (04:42):
Well, that hasn't been finalized yet, but you're right, it'll
cost a lot more. It's now just under fifteen million
dollars across government and you'd expect it to be more.
It's then borne by individual agencies, so Healthy New Zealand
docks that defend thoughts and others, and you'd expect them.
They have to face that from within their existing budgets,
so they'll have to be trading off other things in
(05:03):
order to pay that more expensive price, just like every
household dealing with a high electricity.
Speaker 1 (05:08):
Do you know how much more expensive?
Speaker 2 (05:10):
Not yet? Oh?
Speaker 1 (05:11):
Are we talking double triple? You know? Just half on top.
Speaker 2 (05:16):
I'm not going to hazard again, but I think it
will be considerably.
Speaker 1 (05:18):
More and are we using method x gas again.
Speaker 2 (05:22):
I understand that that is the negotiation that is occurring.
Speaker 1 (05:27):
Okay, when do we find out about this? When is
this going to be signed?
Speaker 2 (05:31):
I understand that we will be finding out pretty shortly
as soon as it's signed, and we intend to be
transparent about it.
Speaker 1 (05:38):
How do you feel about the super Fund and ACC
investing in airbnbnbooking dot Com.
Speaker 2 (05:45):
Well, there's a really important principle for me here, which
is the super Fund, by law, makes their own investment decisions.
It has to do that consistent with a responsible investment framework.
But it's not for me as the minister to direct
them on individual investment decisions. They've themselves responded to this
(06:06):
issue and said, look, we don't think that this trigger
is an issue at this point. We've got really thorough
policies and processes here. And actually, when it comes to
companies like Airbnb, which is what this is about, they're
part of passive funds, we don't think it triggers the
need to put them on an exclusion list.
Speaker 1 (06:24):
No, And it sounds like so it sounds like the
un list that has been published here is really really
tough it really does go quite hard on businesses like this.
Why are we listening to these guys at the UN?
Do we need to stop?
Speaker 2 (06:37):
Well, in this case, I don't think that the super
fund is using the UN as their investment guide a nautable.
They they need to consider a range of things and
I'm satisfied that they do that.
Speaker 1 (06:49):
Nicola, are you up for selling land Corp?
Speaker 2 (06:53):
Well, as you know there is we've discussed on your
show before. The Prime Minister has committed we won't be
selling state owned enterprises term. However, we are looking at
the purpose behind every entity that we own and asking
ourselves is that achieving its purpose? Is it the best
use of taxpayer funds? And I can quite understand and
(07:15):
off the back of a big loss which that PAMU
Land Corps have posted, why some people will be asking
that question.
Speaker 1 (07:22):
And so if you're considering it, maybe for next term,
will Landcorp be on that list?
Speaker 2 (07:28):
Well, look, we are not going to get ahead of
ourselves at the moment. We're looking at why do we
own them? Are they living up to their purpose? Are
they performing well? And those are all questions which are
very relevant for Land Corp. Of course, I would note
some of those farms farms that might in future be
used in a treaty settlement. That's historically been one of
the reasons why the government has chosen to retain that portfolio.
(07:52):
But these are all questions that we're going through on
us calm rational.
Speaker 1 (07:55):
And how long before those treaty settlements are settled.
Speaker 2 (07:59):
Well, of course Minister Goldsmith is working to get them
all done as soon as possible.
Speaker 1 (08:03):
Okay, well we need him to hurry up, Nicola, thank
you appreciate it. Nichola willis our Finance ministy here. So
ACT is called ACT loves a little asset sale. And
you know what, so do I. I love an asset
sale if it's justified. I don't just love it for
the sake of it. If it's justified, and I suspect
that this may be a case if we should at
least consider it. ACT is calling for the sale of
Land Corp because it's reported a net loss after tax
(08:23):
of twenty six million dollars for the year ending thirty June.
I mean, seriously, it can't run a farm, so why
is it running farms? An independent review and found in
twenty twenty one found the organization failed to meet financial forecasts,
had high corporate costs, and invested in unprofitable or farm ventures.
Get rid of them. For more from Heather Duplasy Allen Drive.
(08:46):
Listen live to news talks it'd be from four pm weekdays,
or follow the podcast on iHeartRadio
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