April 22, 2025 • 9 mins
There's less than a month to go until the 2025 Budget is unveiled - and the Finance Minister has been clear about the goals she aims to tackle.
Nicola Willis says New Zealand has been in a significant deficit since 2019, and she's determined to get back into surplus by 2027/2028.
She explained getting the country back into surplus will help to pay down debt.
"We're borrowing every day right now to keep our hospitals, schools and police going - but we can't do that forever as a country, we need to get the books back in balance."
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
With us as the Finance minister. Nikola Will this evening,
Nicolip good evening here that now I see that you
were talking about starting to pay down our debt. Are
you going to start paying down the debt this budget?
Speaker 2 (00:09):
Well, the first step to paying down debt is getting
the budget back in balance. Because New Zealand has been
a deficit spending more than we earn since twenty nineteen,
and we've previously said that we want to consolidate gradually.
Our goal is to get back into surplus by the
twenty seven twenty eight financial year. That goal remains the same.
Speaker 1 (00:28):
Okay, So we get back to surplus twenty seven twenty
eight and then we start hammering the debt. Is that right?
Speaker 2 (00:32):
That's right because once you're in surplus, of course you're
no longer borrowing to pay for the groceries, and you've
got the ability to pay down debt. Of course, we're
borrowing every day right now to keep our hospitals, schools
and police going. But we can't do that forever as
a country. We need to get the books back in balance.
Speaker 1 (00:47):
So what do you reckon is a good level for
debt to sit out?
Speaker 2 (00:51):
Well, forty percent is where I would like to get
it too. I want it tracking down to there. Between
twenty and forty percent is where the government has said
is what we're comfortable with. It's now up over that level,
Treasury say, beyond fifty percent, it becomes a bit of
a problem if we get an earthquake or a climate
shock or any kind of big economic event.
Speaker 1 (01:12):
Okay, hold on, So are you saying that when you
leave the role as Finance minister one day, forty percent
will be a good spot to get it too?
Speaker 2 (01:20):
Yeah, well, I want it tracking down to forty percent.
Speaker 1 (01:22):
Isn't it only twenty two and a half at the moment.
Speaker 2 (01:26):
Yes, that's right, But it's forecast to keep growing while
we're still in deficit. So my first goal is to
get it bending back down to forty and then we
think it should comfortably sit between twenty and forty.
Speaker 1 (01:36):
Okay, and so what is it going to track it?
What is it going to reach it its height according
to forecasts?
Speaker 2 (01:40):
Well, that's what I'm going to tell you at the
budget Okay, very budget sensitive figure. It needs to be
forward to dating.
Speaker 1 (01:46):
Then you've got to have a stretch goal, right, you
can't be doing like forty three percent down to forty percent.
That's not impressive.
Speaker 2 (01:52):
Well, as I say, the first thing is get your
books back in balance, and New Zealander is listening to
this will understand that the first thing to start being
able to pay down your credit card debt is to
actually not be spending more than you earn each week.
And right now New Zealand is spending more every year
than we are earning, and so we have to get
that right. And that's the prerequisite of being able to
(02:13):
pay down debt. And of course labor at every instance
say the answer to every problem is to spend more,
and they forget the fact that right now it's all
on the credit card and that credit card needs to
be repaid by your kids and my kids.
Speaker 1 (02:25):
Nicola is the reserve bank currently independent of view it is, Well,
how did you get them to change their mind about
the capital funding? Once Adrian or left because he was like, no,
I don't want to know, I don't want to do
what you want. He's out the door. Christian and Neil
quickly decide to do what you want.
Speaker 2 (02:41):
Well, they took that decision independent of me. You'll know
that there's been a Select Committee inquiry occurring at Parliament
into the banking sector, and one of the issues that's
been raised by submitter after submitter is the impact the
changes in the Reserve Bank's capital adequacy ratios have had
on lending. I think the Deserve Bank has observed that
(03:01):
public debate and in their own words, they've decided it's
an appropriate time to check in and see whether the
decisions they made back in twenty nineteen still stick.
Speaker 1 (03:09):
I would agree with you on this, and I think
that they are doing the right thing. But you've got
a problem here, haven't you. Because what's being suggested in
the media today is that Neil Quigley is not independent
as the as the chair because he is with Wye
Cutter University. He wants you to give him a medical school.
Christian Hawksby is not independent is the acting governor because
he wants the job full time, so he's going to
do what Both of them have interests in doing what
(03:32):
you want. There's a perception problem, isn't that.
Speaker 2 (03:35):
Well I just reject that completely, and I think it
impugnes the integrity of both of those people.
Speaker 1 (03:40):
Well, does it not lead you.
Speaker 2 (03:41):
And take their roles more seriously?
Speaker 1 (03:43):
But does it not lead you to the point where
it has become obvious that neither of them can hold
those positions.
Speaker 2 (03:50):
Well, no, I continue to have confidence in the Reserve Bank,
both the Acting Governor and in the chair of the
Reserve Bank Board.
Speaker 1 (03:58):
But even outside of this, do they actually deserve those
positions because Neil Quigley was there while Adrian All was
there and that thing was just a complete hot mess,
and so was Christian hawksby right, So they are all
part of the same kabal. Don't you need a proper
clean out.
Speaker 2 (04:11):
Well, I'm very pleased that we've started by getting the
funding situation under control and stopping this business of massive
increases and how much the Reserve Bank ha spens. Yeah,
I think that will go a significant way to change
in culture. I've also refreshed some of the membership of
both the Monetary Policy Committee and the Board, and I
have further opportunities to do more of that in the
(04:33):
next few months. All of those things are relevant, and
I share your concerns about some of the decisions that
the Reserve Bank made when it was in Cohertz with
Grant Robertson and they printed too much money. Yes, and
I have said previously that I do think is a country.
We need to review some of that decision.
Speaker 1 (04:50):
But both of these and there at the same time, Nikola,
can they continue to hold their jobs if they were
part of that administration?
Speaker 2 (04:57):
Well, look, I'm satisfied that the Reserve Bank Board recommended
to me that Christian Hawksby was the best person for
that temporary role while they search for a permanent governor,
and he meets all of the criteria needed.
Speaker 1 (05:10):
Okay, now listen, have you caught up on the fact
that you guys are still doing co governance? Are you
aware of this?
Speaker 2 (05:16):
Well, I don't think that's quite fair. I think you're
referring to the situation in the way takes Yukland Council
is currently consulting on a proposed interpretation of a deed
and look, that's out for consultation. People will have their say.
None of it, as I understand, it would override existing governance.
Speaker 1 (05:36):
What have I got wrong?
Speaker 2 (05:37):
Statutory?
Speaker 1 (05:38):
What have I got wrong? Calling this co governance?
Speaker 2 (05:40):
Well, as I understand it, the proposal being consulted on
is not final. First second, I understand it's not intended
to override the existing governance structures or the statutory powers.
Speaker 1 (05:53):
What government structures and strateutory powers are you talking about.
Speaker 2 (05:57):
Well, I'm talking about the fact that the Council is
still the democratically elected council, that the Crown is still
the democratically elective crown. Well, so that will ensure that
the positions of the Crown and the Council continue to
be represented effectively. Whooped to do?
Speaker 1 (06:14):
It's co governance. It's a committee that makes decisions. Fifty
percent of it is Tongue's if you know, with fifty
percent is Crown and Council. That is co governance.
Speaker 2 (06:22):
Well, look to anyone listening, it's out for consultation right now.
So why are you.
Speaker 1 (06:27):
Doing with this? When you guys are elected. You came
out against three Waters, you came out against the new RMA,
and it was implicit in that that you guys were
going to stop the co governors. So why is the
same stuff happening under you guys?
Speaker 2 (06:38):
Well, this relates to an Act of Parliament from two
thousand and eight which already sets up a deed and
Auckland Council are currently consulting on how they want to
give effect to that deed. No decisions have been made.
People should have their say, are you cool with us? Well?
To be honest, hither. The first I heard of it
(06:59):
was about half an hour when my press team said
here that wants to ask you about this, so I
will be seeking to get more information about it.
Speaker 1 (07:07):
In that case, I feel slightly bad coming it as
hard at you as I have, But can you go away,
have a look at it, take some advice, come back
to me and let me know if your government is
chill about this, because it would be a huge disappointment
to me if you were. But while we're on the
subject of things that we are discovering now, it seems
to me that what you've given Winston is a picture
(07:28):
of a train. Is that what's happened?
Speaker 2 (07:33):
As I said, look, I respect Winston's desire for privacy.
When I gave he told me that birthday, oh he
told you, okay, yeah, Well then that's absolutely fine. If
he's revealed that information. Then I gave him a vintage
poster from the railways from the seventies, and it's pretty cool.
Speaker 1 (07:53):
From his heyday. So the thing is, do you realize
he hasn't even looked at it yet.
Speaker 2 (07:57):
Well, he looked at it with me in front of him,
but I don't think it's on display or anything.
Speaker 1 (08:03):
I don't think it's soaked in because he said to me, Oh,
I was really busy and I was going to go
out the door, and I haven't actually looked at it.
So you might have to get him, might have to
get him back there and looking at again. Do you
know what I mean?
Speaker 2 (08:12):
Anyway, Well, I'm glad that he's got more important things
to do than look at training posters. Hey, can it
be with the world as it is? Right?
Speaker 1 (08:19):
Listen on Winston though, are you guys going to support
this definition of a woman that he's putting into a
member's bill.
Speaker 2 (08:24):
Well, look, we haven't taken that bill to caucus yet.
Our practices that we decide our positions on bills as
a team when bills are pulled from the ballot. For
my part, what is a woman While a woman is
an adult human female. That's pretty clear to me. You'll
love it. Let live person. So how people then choose
(08:45):
to self identify, that's over to them. But the law
often needs to be a bit more black and white
than that, so it'll be just a matter of how
does this actually apply to the law?
Speaker 1 (08:54):
What Pep Nichola, thank you for your time. As always,
we'll talk next week about co govenance. That's Nicola Willis Fine,
It's Minister.
Speaker 2 (09:01):
For more from Hither Duplessy Allen Drive.
Speaker 1 (09:03):
Listen live to news talks. It'd be from four pm weekdays,
or follow the podcast on iHeartRadio
With us as the Finance minister. Nikola Will this evening,
Nicolip good evening here that now I see that you
were talking about starting to pay down our debt. Are
you going to start paying down the debt this budget?
Speaker 2 (00:09):
Well, the first step to paying down debt is getting
the budget back in balance. Because New Zealand has been
a deficit spending more than we earn since twenty nineteen,
and we've previously said that we want to consolidate gradually.
Our goal is to get back into surplus by the
twenty seven twenty eight financial year. That goal remains the same.
Speaker 1 (00:28):
Okay, So we get back to surplus twenty seven twenty
eight and then we start hammering the debt. Is that right?
Speaker 2 (00:32):
That's right because once you're in surplus, of course you're
no longer borrowing to pay for the groceries, and you've
got the ability to pay down debt. Of course, we're
borrowing every day right now to keep our hospitals, schools
and police going. But we can't do that forever as
a country. We need to get the books back in balance.
Speaker 1 (00:47):
So what do you reckon is a good level for
debt to sit out?
Speaker 2 (00:51):
Well, forty percent is where I would like to get
it too. I want it tracking down to there. Between
twenty and forty percent is where the government has said
is what we're comfortable with. It's now up over that level,
Treasury say, beyond fifty percent, it becomes a bit of
a problem if we get an earthquake or a climate
shock or any kind of big economic event.
Speaker 1 (01:12):
Okay, hold on, So are you saying that when you
leave the role as Finance minister one day, forty percent
will be a good spot to get it too?
Speaker 2 (01:20):
Yeah, well, I want it tracking down to forty percent.
Speaker 1 (01:22):
Isn't it only twenty two and a half at the moment.
Speaker 2 (01:26):
Yes, that's right, But it's forecast to keep growing while
we're still in deficit. So my first goal is to
get it bending back down to forty and then we
think it should comfortably sit between twenty and forty.
Speaker 1 (01:36):
Okay, and so what is it going to track it?
What is it going to reach it its height according
to forecasts?
Speaker 2 (01:40):
Well, that's what I'm going to tell you at the
budget Okay, very budget sensitive figure. It needs to be
forward to dating.
Speaker 1 (01:46):
Then you've got to have a stretch goal, right, you
can't be doing like forty three percent down to forty percent.
That's not impressive.
Speaker 2 (01:52):
Well, as I say, the first thing is get your
books back in balance, and New Zealander is listening to
this will understand that the first thing to start being
able to pay down your credit card debt is to
actually not be spending more than you earn each week.
And right now New Zealand is spending more every year
than we are earning, and so we have to get
that right. And that's the prerequisite of being able to
(02:13):
pay down debt. And of course labor at every instance
say the answer to every problem is to spend more,
and they forget the fact that right now it's all
on the credit card and that credit card needs to
be repaid by your kids and my kids.
Speaker 1 (02:25):
Nicola is the reserve bank currently independent of view it is, Well,
how did you get them to change their mind about
the capital funding? Once Adrian or left because he was like, no,
I don't want to know, I don't want to do
what you want. He's out the door. Christian and Neil
quickly decide to do what you want.
Speaker 2 (02:41):
Well, they took that decision independent of me. You'll know
that there's been a Select Committee inquiry occurring at Parliament
into the banking sector, and one of the issues that's
been raised by submitter after submitter is the impact the
changes in the Reserve Bank's capital adequacy ratios have had
on lending. I think the Deserve Bank has observed that
(03:01):
public debate and in their own words, they've decided it's
an appropriate time to check in and see whether the
decisions they made back in twenty nineteen still stick.
Speaker 1 (03:09):
I would agree with you on this, and I think
that they are doing the right thing. But you've got
a problem here, haven't you. Because what's being suggested in
the media today is that Neil Quigley is not independent
as the as the chair because he is with Wye
Cutter University. He wants you to give him a medical school.
Christian Hawksby is not independent is the acting governor because
he wants the job full time, so he's going to
do what Both of them have interests in doing what
(03:32):
you want. There's a perception problem, isn't that.
Speaker 2 (03:35):
Well I just reject that completely, and I think it
impugnes the integrity of both of those people.
Speaker 1 (03:40):
Well, does it not lead you.
Speaker 2 (03:41):
And take their roles more seriously?
Speaker 1 (03:43):
But does it not lead you to the point where
it has become obvious that neither of them can hold
those positions.
Speaker 2 (03:50):
Well, no, I continue to have confidence in the Reserve Bank,
both the Acting Governor and in the chair of the
Reserve Bank Board.
Speaker 1 (03:58):
But even outside of this, do they actually deserve those
positions because Neil Quigley was there while Adrian All was
there and that thing was just a complete hot mess,
and so was Christian hawksby right, So they are all
part of the same kabal. Don't you need a proper
clean out.
Speaker 2 (04:11):
Well, I'm very pleased that we've started by getting the
funding situation under control and stopping this business of massive
increases and how much the Reserve Bank ha spens. Yeah,
I think that will go a significant way to change
in culture. I've also refreshed some of the membership of
both the Monetary Policy Committee and the Board, and I
have further opportunities to do more of that in the
(04:33):
next few months. All of those things are relevant, and
I share your concerns about some of the decisions that
the Reserve Bank made when it was in Cohertz with
Grant Robertson and they printed too much money. Yes, and
I have said previously that I do think is a country.
We need to review some of that decision.
Speaker 1 (04:50):
But both of these and there at the same time, Nikola,
can they continue to hold their jobs if they were
part of that administration?
Speaker 2 (04:57):
Well, look, I'm satisfied that the Reserve Bank Board recommended
to me that Christian Hawksby was the best person for
that temporary role while they search for a permanent governor,
and he meets all of the criteria needed.
Speaker 1 (05:10):
Okay, now listen, have you caught up on the fact
that you guys are still doing co governance? Are you
aware of this?
Speaker 2 (05:16):
Well, I don't think that's quite fair. I think you're
referring to the situation in the way takes Yukland Council
is currently consulting on a proposed interpretation of a deed
and look, that's out for consultation. People will have their say.
None of it, as I understand, it would override existing governance.
Speaker 1 (05:36):
What have I got wrong?
Speaker 2 (05:37):
Statutory?
Speaker 1 (05:38):
What have I got wrong? Calling this co governance?
Speaker 2 (05:40):
Well, as I understand it, the proposal being consulted on
is not final. First second, I understand it's not intended
to override the existing governance structures or the statutory powers.
Speaker 1 (05:53):
What government structures and strateutory powers are you talking about.
Speaker 2 (05:57):
Well, I'm talking about the fact that the Council is
still the democratically elected council, that the Crown is still
the democratically elective crown. Well, so that will ensure that
the positions of the Crown and the Council continue to
be represented effectively. Whooped to do?
Speaker 1 (06:14):
It's co governance. It's a committee that makes decisions. Fifty
percent of it is Tongue's if you know, with fifty
percent is Crown and Council. That is co governance.
Speaker 2 (06:22):
Well, look to anyone listening, it's out for consultation right now.
So why are you.
Speaker 1 (06:27):
Doing with this? When you guys are elected. You came
out against three Waters, you came out against the new RMA,
and it was implicit in that that you guys were
going to stop the co governors. So why is the
same stuff happening under you guys?
Speaker 2 (06:38):
Well, this relates to an Act of Parliament from two
thousand and eight which already sets up a deed and
Auckland Council are currently consulting on how they want to
give effect to that deed. No decisions have been made.
People should have their say, are you cool with us? Well?
To be honest, hither. The first I heard of it
(06:59):
was about half an hour when my press team said
here that wants to ask you about this, so I
will be seeking to get more information about it.
Speaker 1 (07:07):
In that case, I feel slightly bad coming it as
hard at you as I have, But can you go away,
have a look at it, take some advice, come back
to me and let me know if your government is
chill about this, because it would be a huge disappointment
to me if you were. But while we're on the
subject of things that we are discovering now, it seems
to me that what you've given Winston is a picture
(07:28):
of a train. Is that what's happened?
Speaker 2 (07:33):
As I said, look, I respect Winston's desire for privacy.
When I gave he told me that birthday, oh he
told you, okay, yeah, Well then that's absolutely fine. If
he's revealed that information. Then I gave him a vintage
poster from the railways from the seventies, and it's pretty cool.
Speaker 1 (07:53):
From his heyday. So the thing is, do you realize
he hasn't even looked at it yet.
Speaker 2 (07:57):
Well, he looked at it with me in front of him,
but I don't think it's on display or anything.
Speaker 1 (08:03):
I don't think it's soaked in because he said to me, Oh,
I was really busy and I was going to go
out the door, and I haven't actually looked at it.
So you might have to get him, might have to
get him back there and looking at again. Do you
know what I mean?
Speaker 2 (08:12):
Anyway, Well, I'm glad that he's got more important things
to do than look at training posters. Hey, can it
be with the world as it is? Right?
Speaker 1 (08:19):
Listen on Winston though, are you guys going to support
this definition of a woman that he's putting into a
member's bill.
Speaker 2 (08:24):
Well, look, we haven't taken that bill to caucus yet.
Our practices that we decide our positions on bills as
a team when bills are pulled from the ballot. For
my part, what is a woman While a woman is
an adult human female. That's pretty clear to me. You'll
love it. Let live person. So how people then choose
(08:45):
to self identify, that's over to them. But the law
often needs to be a bit more black and white
than that, so it'll be just a matter of how
does this actually apply to the law?
Speaker 1 (08:54):
What Pep Nichola, thank you for your time. As always,
we'll talk next week about co govenance. That's Nicola Willis Fine,
It's Minister.
Speaker 2 (09:01):
For more from Hither Duplessy Allen Drive.
Speaker 1 (09:03):
Listen live to news talks. It'd be from four pm weekdays,
or follow the podcast on iHeartRadio
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