January 22, 2025 • 5 mins
The Finance Minister's fired a warning to local councils - saying it's time for spending discipline and restraint.
Stats NZ data for the year to December shows the inflation rate remains unchanged at 2.2 percent.
Simon Watts has picked up the Local Government portfolio from incoming Health Minister, Simeon Brown.
Nicola Willis says in too many cases, rates have been out of control.
"We are looking at this concept of putting some limits on the level of rate increases that councils can do."
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Episode Transcript
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Speaker 1 (00:00):
So the big story is inflation, and inflation has remained
stuck at two point two percent for the year to December.
Now that is roughly in line with economists expectations. So
lower petrol prices helped keep our inflation down. But the
thing is domestic inflation is sticky, like rents, for instance,
they're at four point two percent and local authority rates
(00:22):
who are up twelve point two percent. That's twelve point
two percent. That's all inflation. Meanwhile, economists say that the
lower New Zealand dollar we have at the moment and
the higher oil prices that are emerging could see a
return of higher inflation imported into this country late this year.
So Finance Minister Nikola Willis joins me. Now, Hella Nikoler, Hello,
(00:43):
how worried to you that this inflation rate that we've
battled to attain might re accelerate as a year goes on.
Speaker 2 (00:50):
Well, I think there's some positive signs in this data
because what it shows is that domestic inflation overall, what
we call non tradeable inflation, has come down from four
point nine four point five. That's going in the right direction.
For the first time in a long time. We're seeing
some real progress there, so that's positive. As we look
to the future, Yes, of course, we can expect that
(01:11):
there will be other inflationary pressures that can emerge, whether
that's from offshore or other things outside our control. So
our job as a government is to make sure that
we're keeping that discipline around our own spending, not adding
fuel to the inflationary fire, and let the Reserve Bank
do their job of making sure interest rates are in
the right place. Look, I'm pleased because today's data, which
(01:34):
is the second quarter in a row that we've had
inflation back and target ban means that there's room for
the Reserve Bank to keep reducing interest rates, and that
flows through the mortgageholders, that flows through to our real economy.
That's where gross and recovery comes from.
Speaker 1 (01:47):
Now. The thing about non tradable inflation, on what they
call domestic inflation, is that there's many different leavers that
you can use to control it in One of them
is regulatory, and that is completely the ball is completely
in your court. So what would be your message to
councils who keep putting rates up and contributing to our
interest rates? Can you can you? Can you keep their right?
Speaker 2 (02:06):
My message would be that. My message would be the
same as the prime ministers, which is if you care
about your rate payers, then do everything you can control
your costs because when you go and do your nice
to have projects and add all of these extra costs,
it's rate payers for paying and they can't really afford
to in many cases right now. So it's time for
discipline and restraint in local government. And yes we've now
(02:30):
got a new local government minister, Simon Watts. He will
carry on the great work that Simeon Brown has been
progressing where we are looking at this concept putting some
limits on the level of rent, the rate increases that
councils can do because in too many cases they have
been pretty out of control.
Speaker 1 (02:46):
Okay, so that's a rates capan. Can you do it
this year and can it take effect this year?
Speaker 2 (02:51):
Well, as I say, there's a new minister with his
feet under the desk, but he thinks I've seen him today.
The message he is getting loud into here from New
Zealanders is help me with my rapelle and I know
that's top of mind for him.
Speaker 1 (03:01):
Rents up four point two percent again, how can you
get those rent costs down?
Speaker 2 (03:06):
Yeah? Well, those rent costs have been increasing dramatically in
recent years and we want to see that moderating. That's
why we're making it so much easier to build houses,
because we basically need a situation where landlords are competing
for tenants rather than the other way around. So that
fast tracked legislation which we've put through that includes more
than forty new housing developments up to fifty five thousand
(03:30):
more homes. New Zealand's basic problems we don't have enough
houses for the number of people who need to be housed.
Only when we really solve that underlying issue where we
get affordable rents. I want affordable rents. It's a major
cost for many families, for many young people, and we
don't want to see the great rent increases continuing into
the future.
Speaker 1 (03:51):
Now, of course you've been in retreating, you've been talking
about growth, and the astrategy is to get growth, and
it's needed now and not in five years or ten
or fifteen years time. We need to go it now.
There has been some talk about changing visa processes, meaning
that Chinese princes don't have to apply for a visa.
Simon Bridges reckons that would be an instant boost to
the economy for of a billion dollars. So are you
(04:12):
thinking about making China visa free for visitors and could
we expect that maybe even tomorrow when the State of
the Nation's speech comes out.
Speaker 2 (04:21):
You can't expect that one to be announced tomorrow. But
I'm on the same page that one of the immediate
things we can do is get more tourists into New Zealand.
When tourists come here, they spend money in our local businesses,
they spend money with our local hospitality providers, our restaurants
and our bars. It's good for the economy, it's good
for jobs, it's good for all of us. So I
do want to see us increasing those numbers. The tourism
(04:42):
numbers increased in December and January, up to five year high.
I've talked to Louis Upston today, the new Minister for Tourism.
I've said the let's look pretty quickly at the visa idea,
because if we can bring more Chinese tourists here and
they spend more money at local shops, that is good
for New Zealanders. So let's put that high on agenda,
and it suddenly its high off your agenda.
Speaker 1 (05:01):
Well, we're all waiting with beate to breath to see
some of your growth strategies and we look forward to
it and I thank you so much for your time today.
That is Nicola Willis, the Finance Minister.
Speaker 2 (05:09):
For more from Hither Duplessy Allen Drive, Listen live to
news talks. It'd be from four pm weekdays, or follow
the podcast on iHeartRadio
So the big story is inflation, and inflation has remained
stuck at two point two percent for the year to December.
Now that is roughly in line with economists expectations. So
lower petrol prices helped keep our inflation down. But the
thing is domestic inflation is sticky, like rents, for instance,
they're at four point two percent and local authority rates
(00:22):
who are up twelve point two percent. That's twelve point
two percent. That's all inflation. Meanwhile, economists say that the
lower New Zealand dollar we have at the moment and
the higher oil prices that are emerging could see a
return of higher inflation imported into this country late this year.
So Finance Minister Nikola Willis joins me. Now, Hella Nikoler, Hello,
(00:43):
how worried to you that this inflation rate that we've
battled to attain might re accelerate as a year goes on.
Speaker 2 (00:50):
Well, I think there's some positive signs in this data
because what it shows is that domestic inflation overall, what
we call non tradeable inflation, has come down from four
point nine four point five. That's going in the right direction.
For the first time in a long time. We're seeing
some real progress there, so that's positive. As we look
to the future, Yes, of course, we can expect that
(01:11):
there will be other inflationary pressures that can emerge, whether
that's from offshore or other things outside our control. So
our job as a government is to make sure that
we're keeping that discipline around our own spending, not adding
fuel to the inflationary fire, and let the Reserve Bank
do their job of making sure interest rates are in
the right place. Look, I'm pleased because today's data, which
(01:34):
is the second quarter in a row that we've had
inflation back and target ban means that there's room for
the Reserve Bank to keep reducing interest rates, and that
flows through the mortgageholders, that flows through to our real economy.
That's where gross and recovery comes from.
Speaker 1 (01:47):
Now. The thing about non tradable inflation, on what they
call domestic inflation, is that there's many different leavers that
you can use to control it in One of them
is regulatory, and that is completely the ball is completely
in your court. So what would be your message to
councils who keep putting rates up and contributing to our
interest rates? Can you can you? Can you keep their right?
Speaker 2 (02:06):
My message would be that. My message would be the
same as the prime ministers, which is if you care
about your rate payers, then do everything you can control
your costs because when you go and do your nice
to have projects and add all of these extra costs,
it's rate payers for paying and they can't really afford
to in many cases right now. So it's time for
discipline and restraint in local government. And yes we've now
(02:30):
got a new local government minister, Simon Watts. He will
carry on the great work that Simeon Brown has been
progressing where we are looking at this concept putting some
limits on the level of rent, the rate increases that
councils can do because in too many cases they have
been pretty out of control.
Speaker 1 (02:46):
Okay, so that's a rates capan. Can you do it
this year and can it take effect this year?
Speaker 2 (02:51):
Well, as I say, there's a new minister with his
feet under the desk, but he thinks I've seen him today.
The message he is getting loud into here from New
Zealanders is help me with my rapelle and I know
that's top of mind for him.
Speaker 1 (03:01):
Rents up four point two percent again, how can you
get those rent costs down?
Speaker 2 (03:06):
Yeah? Well, those rent costs have been increasing dramatically in
recent years and we want to see that moderating. That's
why we're making it so much easier to build houses,
because we basically need a situation where landlords are competing
for tenants rather than the other way around. So that
fast tracked legislation which we've put through that includes more
than forty new housing developments up to fifty five thousand
(03:30):
more homes. New Zealand's basic problems we don't have enough
houses for the number of people who need to be housed.
Only when we really solve that underlying issue where we
get affordable rents. I want affordable rents. It's a major
cost for many families, for many young people, and we
don't want to see the great rent increases continuing into
the future.
Speaker 1 (03:51):
Now, of course you've been in retreating, you've been talking
about growth, and the astrategy is to get growth, and
it's needed now and not in five years or ten
or fifteen years time. We need to go it now.
There has been some talk about changing visa processes, meaning
that Chinese princes don't have to apply for a visa.
Simon Bridges reckons that would be an instant boost to
the economy for of a billion dollars. So are you
(04:12):
thinking about making China visa free for visitors and could
we expect that maybe even tomorrow when the State of
the Nation's speech comes out.
Speaker 2 (04:21):
You can't expect that one to be announced tomorrow. But
I'm on the same page that one of the immediate
things we can do is get more tourists into New Zealand.
When tourists come here, they spend money in our local businesses,
they spend money with our local hospitality providers, our restaurants
and our bars. It's good for the economy, it's good
for jobs, it's good for all of us. So I
do want to see us increasing those numbers. The tourism
(04:42):
numbers increased in December and January, up to five year high.
I've talked to Louis Upston today, the new Minister for Tourism.
I've said the let's look pretty quickly at the visa idea,
because if we can bring more Chinese tourists here and
they spend more money at local shops, that is good
for New Zealanders. So let's put that high on agenda,
and it suddenly its high off your agenda.
Speaker 1 (05:01):
Well, we're all waiting with beate to breath to see
some of your growth strategies and we look forward to
it and I thank you so much for your time today.
That is Nicola Willis, the Finance Minister.
Speaker 2 (05:09):
For more from Hither Duplessy Allen Drive, Listen live to
news talks. It'd be from four pm weekdays, or follow
the podcast on iHeartRadio
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